DOGE’s failure was not a problem of willpower, but of misunderstanding the nature of the state
The answer lies in the Austrian economist Ludwig von Mises’ slim but enduringly relevant book ‘Bureaucracy’ (1944), which offers a fundamental insight: you cannot run government like a business.
The US DOGE aimed to cut $2 trillion in government spending. In practice, it only achieved reductions of around $170 billion –just 8.5% of its target. Why did the DOGE turn out to be inefficient itself?
The core flaw of the DOGE mindset isn’t its goal – reducing state waste is commendable – but its logic. The methods that improve private sector efficiency don’t translate to government.
The reason is simple: government operates without profit and loss signals. In business, if you produce something inefficiently, the market punishes you – consumers stop buying, competitors overtake you and losses mount. These are the mechanisms by which firms learn, adapt and improve.
Government, by contrast, lacks this feedback loop. There’s no ‘economic calculation’ because services are not provided through voluntary exchange. Public agencies don’t win or lose based on consumer choice, they are funded by compulsory taxation. As Mises argued, this means the government cannot rely on what he called ‘dollar votes’ to measure its success. There is no market test.
Thus, bureaucracy becomes the only rational method for managing government activities. Mises defines it as ‘the method applied in the conduct of administrative affairs the result of which has no cash value on the market’.
Even the most capable entrepreneur, when placed in charge of a government bureau, ceases to be a businessman and becomes a bureaucrat.
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