The huge government bureaucracies we see today didn't get so big because they were the only way to meet economic and social needs.
They became so powerful because of their unrivalled ability to wage total war.
The twentieth century proved it, again and again: Nothing could stand in the way of a bureaucratic state that fully mobilizes for total warfare except another bureaucratic state.
Only a bureaucratic state has the capacity to:
- focus an entire nation's economy on warfare (from resources to production),
- force changes in the way people think and act (propaganda to rationing to promotions to laws), and
- mobilize, train, equip, deploy, and maintain tens of millions of soldiers and sailors and all of their equipment for years at a time.
Due to this, it didn't take long before all other forms of governance were extinguished, making the 20th Century "The Bureaucratic Century."
Of course, the tale of BIG bureaucracy doesn't end with its victory at the end of the 20th Century.
The 21st Century is showing us that the same things that made it so successful will result in its undoing (as with the hero in a Greek tragedy).
In this case, the bureaucratic state made itself obsolete with its ultimate creation, the nuclear weapon.
Only a BIG bureaucracy has the capacity to surmount all of the hurdles required => from the mining to the cascades of centrifuges to the miniaturization of the package to the the delivery system.
A fear of nuclear war, slowly but surely, put an end to conventional warfare as it was waged prior to the first one was used.
Since then, we have seen fewer, less intense, and less frequent conventional wars. That, in turn, made global economic integration possible, and this integration has made bureaucratic warfare even more difficult to wage.
We now live in a world that is enjoying an unprecedented peace, and despite what is going on in Gaza and Syria we've seen fewer deaths per capita from bloody bureaucratic warfare in the last couple of decades than in any time in recorded history.
In today's world, there simply aren't any BIG bureaucracies left that can wage conventional war -- they are either too economically integrated or fearful of nuclear war to do it.
So, what does this mean for the BIG bureaucracies that took control of the world in the 20th Century?
The likely answer is that we don't need them anymore.
The reason why we don't need BIG bureaucracy anymore is due to how they were so successful at warfare.
They enforce regulations, pass laws, create incentives, and erect hierarchies in order to make it easier to wage a total war in the future.
However, by doing that, they lock in the present.
BIG bureaucracy slows adaptation and change to a crawl, creating the stagnation we see today (when China catches up a bit more, they will stagnate too, just like Japan).
JR
PS: WW1's intensity was a surprise to everyone. The Black Swan that nobody anticipated was how effective BIG bureaucracies were at waging total war.
PPS: Giving over control to BIG finance isn't the answer. It's the handmaiden of BIG Bureaucracy -- finance funded its growth. The rise of BIG finance created the great Depression that led to WW2.