 Good afternoon everyone so now I want to talk about bureaucrats in the deep state which we all love more bureaucracy more calculation feel like well hope I'm not boring you too much so I think important thing to start off with is defining the deep state since oh yeah what is that one of the since there seems to be a lot of disagreement as far as I can tell I can ask different people different authors on Wikipedia what what the deep state is so I'm gonna try to kind of get of ideas it's give you an idea of what I mean by it but it's still gonna be a little hand-wavy not super precise so I'll start with what I don't mean and that includes what you find on Wikipedia so they say is this conspiracy theory about a clandestine network of members of the intelligence agencies working in conjunction with high-level financial and industrial entities to exercise power alongside the elected US government that might exist and I find definitions like this unhelpful it seems almost like a straw man like oh it doesn't meet all this condition so it might not exist I'm like did the deep state write this definition but so I'm not using in that term likes things that might exist like here we can identify them so you'll start off with what I do mean so we I mean our bureaucrats that one condition they operate with de facto electoral unaccountability I mean so bureaucrats typically aren't elected they're pointed by elected politicians but and in a de jure sense they probably could be held accountable but for whatever reason or we'll get to some of those reasons they're not and so explain why that is and looking at some some say they only include the national security oriented agencies I'd say yes let's include them but let's not necessarily limit it to them but I think of important point is they operate in secrecy so when I talk about this accountability process that an ideal state might operate to have that accountability process why the secrecy undermines that another part of the deep state is that regardless of who's elected either in the Congress in the White House the members of the deep state tend to stick around I mean this is what I mean by a swamp right this swamp is stagnant water it's not you know a river it trickles through a swamp they stick around so I see these as you know some of the main features I'm apologize that it's not a more like precise definition but this is what I mean by the deep state so talking about bureaucrats in the deep state so I go back again to Mises in bureaucracy but again that essential feature of bureaucracy that defining feature is that it's not calculated on the basis of that they're not managed according to profit and loss they have to find some other way of judging their performance like Mises says their output has no cash value on the market so they can engage in economic calculation I found in bureaucracy Mises talks about the FBI which I would include as part of this definition of the deep state he says the objectives of public administration cannot be measured in money terms and cannot be checked by accountancy methods take a nationwide police system like the FBI there is no yardstick available that could establish whether the expenses incurred by one of its regional or local branches were not excessive it's like maybe any amount of money might be excessive we don't know because consumers aren't able to demonstrate that they prefer whatever outputs are created by the FBI compared to alternative uses of their money because they're paid through taxation I think it's really important when we about to describe some ideal model of how like under the I mean heroic assumptions how an ideal democratic state might work and I think you kind of have to assume away the calculation problem but oh well I'll get to that right now so here I have an image of a book by Chris Coyne and Abbey Hall from which I borrow from heavily in this discussion it's a pretty fascinating book on US government propaganda but in one chapter they present this model of what they call the ideal protective state I believe the protective state is James Buchanan's term but it's basically equivalent to what Mises means by the Night Watchman state this very limited state that defends property rights that's the sole purpose of government to protect and enforce rights from internal and external threats so the functions that they operate are the police the courts and the national security state including the military and probably the intelligence agencies as well and this model I imagine if you will it's characterized by the existence of effective mechanisms by which voters hold politicians accountable they're able to monitor them reward them if they do right punish them if they do wrong and keep good tabs on what they're doing so in the operation of this ideal protective state elected politicians are assuming that there are publicly spirited I mean that's the only people you know the people would elect right they're just publicly interested politicians so they engage in protective activities only when it's in the interest of citizens they wouldn't do things like have a military contract making a bunch of Abrams tanks that they know won't reach the battlefield because they have some special interest that wants to be paid to make Abrams tanks whether or not they're useful for the electorate so under this ideal state elected politicians don't do those things and elected officials since bureaucrats are appointed by the elected officials voters through their elected officials hold the bureaucrats accountable so the elected officials also monitor and reward or punish bureaucrats making sure they only add value added inputs in the production of security but again this ideal operation of this magical ideal state requires abstracting away from the calculation problem as if it can be known in a bureaucratic framework what national defense inputs are actually value added and without knowing that it's it it's kind of a required input for all the waste fraud and abuse that people don't know what exactly is value added another assumption there's symmetric information between the citizens and these political actors both elected officials and bureaucrats so everybody knows what's there's no secrecy everybody knows everything that's going on and so based on these assumptions there's no room for opportunism waste fraud corruption or abuses of power partially because political actors are assumed to be ideal civil servants but I would argue that say that with a straight face but even if you assume that there's still the calculation problem that is even if we assume the best of intentions among politicians even if they wanted to only acquire say tanks and planes and bombs and guns and all these things that are inputs into defense they don't know the ideal amount because there's not a market for this so I would argue that the fact that economic calculation isn't possible for these bureaucracies in acquiring these inputs that's a necessary ingredient for there to be waste fraud and abuse so even if angelic politicians tried to minimize these things they wouldn't know how to do it perfectly well I mean in extreme cases like we know these tanks won't ever reach the belt maybe we'll send them to Ukraine or whatever but they're not going to be an input into American defense things like that I think we can say even absent a market that yeah that's probably waste or but that's beyond there are cases closer to the margin where maybe maybe not but the point is even with the best of intentions they won't know yeah so I'm gonna show this operation of the ideal state visually so here you have the voters the citizens they monitor and reward or punish elected officials and through their elected officials elected officials acting on behalf of the principles the voters punish or reward bureaucrats and also add because of that symmetric information assumption that that what they call it the the fourth estate you know they keep the policy spans informing everybody of what elected officials and bureaucrats are doing and so they inform the voters so the voters are fully informed of the relevant information to hold politicians accountable so that's the ideal state there's the actual state there's a lot of problems so one of these principal agent problems the agents being the politicians there's now their interests aren't fully aligned with the voters and so they might diverge they're not necessarily doing only those things which benefit the electorate generally it's also issues with the effectiveness of voting which I'll get into you also don't have fully informed voters they are I mean what public choice is called rationally ignorant of course they use a rational not quite in a Misesian sense in a Misesian sense there's no irrational ignorance what they mean well I'll explain what they mean in the next slide you also have vote seeking politicians and that might not be so bad but if it were the case that garnering the most votes was aligned with what's in the interests of citizens but it's often not one of the reasons is special interests and again just to reiterate this point since I see it as crucial the lack of economic calculation makes it impossible to determine whether bureaucratic inputs are value added or whether they're waste yeah it's talking about the a little bit more about the limits of the voting booth so citizens often lack the incentive to become fully informed to monitor reward and punish elected officials when you think about the cost of acquiring information so I've been in the market for an automobile for a while and spent a lot of hours researching because I have the ability to decide whether to buy this car or not buy like I get to make the ultimate decision whereas we're thinking about voting it's like you have a very very I mean astronomically small or is that correct my microscopically small chance of affecting the outcome in election so most people realizing this it's like why become informed about these things I can't really do anything about or why vote at all it just doesn't make sense unless this is just a consumer good for you like oh I like these politics but it doesn't make sense to become informed about politics in order to like make the right voting decisions especially not in national elections so since voters aren't fully informed political actors such as those in the deep state have the incentive to use propaganda to influence what information is available voters and how it is framed now talk a little bit more about that in a minute there's also this issue of there being substantial time between elections like for most consumers even if I bought a car found out it was a bad decision like I can I might take a little bit of a hit but I can go trade that out pretty quickly I can fix bad decisions I've made with federal election so think of presidential elections every four years I wonder how many people voting for George W. Bush in 2000 could anticipate what became of that especially after 9-11 where you have a big expansion of the deep state the creation of the Department of Homeland Security and so forth so they said whoa I made a mistake here they have to wait till 2004 election to vote for someone else possibly but even if they wanted to these once you create these bureaucracies they're very hard to get rid of they've become established people in 2001 seen what was going on like listening to Ron Paul or Lou Rock be like well we can't say anything about until 2004 so this time between elections really limits this as a mechanism of voting mechanism of voting in terms of holding elected officials accountable and I want to talk a little bit about special interests so for example the military industrial congressional complex no can't remember all the hyphenated terms that dr. Kieckowski mentioned we'll just stick with these so with their referring to just as I suggest the military private industry and Congress and why are special interests effective because if we think in terms of the idealized state I mean wouldn't politicians want to pursue policies that benefit people generally rather than specific interests because I mean the more people you benefit that should result in more votes right well not necessarily so another to well bring in a catch phrase that the public choice economists seem to like which I think is useful is this idea of concentrated benefits and dispersed costs so if you think about something like a tariff right tariffs there's way more consumers of say say you have a sugar tariff there's way more consumers of sugar than there are producers but the costs of this tariff are spread among lots of consumers whereas the beneficiaries are just sugar growers so for them individually it might mean the difference of tens or hundreds of thousands of dollars a tariff policy so they have an incentive to lobby of regarding it whereas most sugar consumers this might mean a few dollars difference every year so you're not going to go become a lobbyist over it as an individual taxpayer so in this way special interests can make a much more effective lobbying group than you know bigger groups that are for whom it's more costly organizing for whom individual benefits are small and so as special interests I mean they can have this interest in shaping public policy such as by inflating national security threats compared to what they actually are they have an interest in people being misinformed that if they think like oh I'm unsafe let's make sure NSA and CIA and all these agencies are well-funded they don't have an interest in necessarily that voters have a symmetric or correct information as the bureaucrats do okay so go back to our depiction of this process let's add an element there we have the deep state so not necessarily not identical with bureaucrats but a subset of the bureaucrats and I want to talk about how they affect the pieces of this supposed accountability process of the operation of the ideal state so first just going around the horn just going not necessarily any order except clockwise here so starting with the media the deep state does things like disseminate disinformation or insert their own personnel in the media and engage in censorship so examples of that Dr. Peter Klein mentioned this particular story in which fifth so it says Hunter Biden story is Russian disinfo about the disinformation here is that it's disinformation so so and I want a terminological point here there's distinction between misinformation and disinformation they're both false but disinformation is the person spreading it is intending to spread false information where misinformation there the disseminar might believe it's true so in this case as you probably aware this news came out soon before the 2020 presidential election on Hunter Biden's laptop was well various things including evidence that he might have been peddling in the influence of his father with foreign actors and so little 50 some CIA other spooks they signed this letter saying this has all the hallmarks of Russian disinformation and well in addition to well spreading that they also censored or got Twitter to censor this story from being spread and polls to the extent you trust them suggest that a lot of people might have voted differently had they been aware of this so the reason they do this this particular case I say it's probably influence the outcome of the presidential election also I think this is interesting worth noting the author whose name you probably can't read Natasha Bertrand she's an interesting figure she seems to just fail upward where I mean she she's like a reliable I think they go to her the deep say no it's like yeah she'll publish whatever we send to her maybe like she was publishing the steel dossier or anything not really doing any investigative journalism to see whether this is true so in that in that sense I don't when I'm talking about the deep state affecting all it's not the case that there's an adversarial relationship it's like Natasha Bertrand it's like oh great for her career to be like oh I got this inside scoop even if it's well fake I mean it doesn't seem to hurt her as far as I can tell that she's publishing this fake information regularly and that was something else Dr. Kajakowski mentioned that agents within the intelligence community will send out this I mean maybe underanalyze intelligence that ends up being false so yeah be skeptical you ever see read in the media like oh this is what this anonymous intelligence official said like well they might have a different reason for spreading that other than keeping the citizenry well informed they also insert personnel it's kind of funny to think a few decades ago senator Frank Church of Idaho had this investigation finally Operation Mockingbird it was called where intelligence agencies were trying to you know shape what the media reported now they don't really need to they just get hired by them so this picture is like Matt Taibia I took this from you see these 16 people they all work for MSNBC they're from some of our CIA FBI DEA Department of Justice US Army and it's not just like this at MSNBC but other legacy media outlets cable TV they really can shape the discussion that takes place they don't really hear like if you think you change channels and you like oh I'm hearing the same thing over and over this might be part of the reason like they don't they have a pretty unified message and they don't they're not really critical of US foreign policy and I'm gonna really criticize the US role in Ukraine they've worn Ukraine or things like that this helps shape public opinion and it's not only a recent thing even even New York Times talking about this as those other guys maybe they were more willing to be critical of George W. Bush's foreign policy even though it's not quite different than what it is today but they have this story about the Pentagon sending all these retired officers to shape terrorism coverage from inside the TV and radio networks and it's not only at the legacy media outlets for people who still watch cable news it's also on social media so you have CIA agents getting into Facebook being in charge of their content policy Google as well having over a hundred spooks on their payroll and as I don't have to continue mentioning like the censorship that takes place we mentioned the Twitter files reason cases of FBI current case of them getting in trouble talking to social media companies trying to tell them what topics to not talk about so that's all these ways in which they shape how the media reports things now going to voters are just the cis tree in general there's a few different activities that the deep state undertakes it's one of those they might investigate and intimidate dissidents so in recent examples include like no no not sure if it was just limits to one FBI field office but like oh we got to investigate those radical those rad trad Catholics or you know pro-life activists or parents who go to school board meetings and are upset again that was again this you know serves a certain constituency the I believe was the teachers unions that ass the DOJ like look into these teachers that are upset at us and so yeah there's these symbiotic relationships here if they can if the deep state can have certain constituencies on their side and intimidate those critical of the regime they also manufacture plots or I think essentially engage in entrapment I've been doing this for a long time as well years past it was going and finding young Muslim men on the internet radicalizing them giving them weapons and plots and money and then foiling those plots and look at whether the FBI stopped this terrorist attack that they created and I mean I think there's various reasons for this part of it's to like justify like look at these terrorist plots we need our spying powers we need increased budgets justifying what they're doing and I mean more recently I mean the domestic terrorists have changed but it's still kind of the same plot we insert our informants we create plots and then stop those plots and so yeah I think it's to maintain their power their you know that their foreign intelligence surveillance act warrants they can point to these like the DOJ is they look at all this domestic terrorism I look into the individual reports because don't trust their numbers about what they're doing now talk about the deep state and elected officials again sometimes this is add it depends just and I should back up and say I don't mean to portray the deep state as this unified entity just like elected officials aren't this one unified entity there are factions and so they it shouldn't be treated as a monolith so the deep state will you know benefit some elected officials harm some other ones one of those ways which I call six ways from sunday and this is a reference to senator Chuck Schumer had this interview with Rachel Maddow in which they were discussing Donald Trump can be this victim of the intelligence agencies going after him and Chuck Schumer says well let me tell you you take down the intelligence community they have six ways from sunday are getting back at you and I'm not sure all the six ways from sunday they have but what this might include maybe opening a false investigation against you or leaking disinformation to the media about things you've done or malicious or selective prosecution maybe prosecute you for these things that all other politicians do and don't seem to get in trouble for and this is nothing new as well when you think of the start of the FBI with J. Edgar Hoover I mean he had his dossiers on politicians he had leverage over them so this is nothing new so I think this can help right if elected officials have the ultimate power to hold bureaucrats accountable having leverage over them might undermine that part of the accountability process the other point is that bureaucrats so the fact that unlike for-profit management in which say the upper manager can look at managers of individual divisions as Mises says and look at their profit and loss statements ultimately that's you know really economizes on the information the manager has to know it's like oh you making profit good for you doesn't have to know much more than that but with bureaucracies they don't have an ultimate number like this I mean I'm wondering how the FBI would show the elected officials congress like here's all the things we're doing and you should keep funding us we're definitely not going to tell you about others things that we don't want you to know about so they the elected officials depend on bureaucrats to keep them informed and this can be a problem so when they can lie with impunity or hide information like for example within that coin and hall book that I mentioned I have a story about this pentagon report where they found out I just calculated all this waste that the pentagon was engaged in and they hid that report it wasn't published they didn't tell congress so they have this discretion or they're not supposed to but if they can keep it a secret what can congress do about it they also lie so an example of that here's a former director of national intelligence James Clapper so he lied under oath in 2013 he was well with impunity I mean this supposed to be you know a felony to lie under oath and lie to congress he was asked about the mass surveillance program on of domestic spying said no we're not doing that which ended up of course being false um not much happened to my well by the way he's employed by CNN now so uh I guess maybe that was good for his resume but oh and this I have a I find this find a funny side note so I mentioned the the author of that political article Natasha Bertrand where um she published that letter signed by all those intelligence officials that the hunter biden laptop was russian disinfo she works for CNN now too so uh James Clapper they're uh co-workers but he had a beef with her because he's like hey uh she misrepresented what I said like we didn't say this was russian disinfo we just said it had all the hallmarks of russian disinformation so anyway I mean it accomplished its task really I think um I guess I'm not sure if that's failing upwards but I mean she's not out of a job she's at CNN now instead of politico and it's interesting but like I have to think more like I have to update how I see these media outlets in terms of what what do consumers want do consumers want consumers of news media like I would think naively that they just want accurate information but maybe they just want to confirm their biases I don't know like it's weird to me that these uh no I mean I guess people don't watch CNN anymore but yeah trying to understand that but I guess it's also a mystery with Tucker right if you have the most viewed primetime cable news guy why do you get rid of this don't they want to make money it's a question I don't I don't have the answer uh another example so uh earlier this month FBI director Christopher Ray was brought to testify before the House Judiciary Committee among a lot of things um including this case of it's kind of bouncing back and forth where the FBI is in contact with social media companies trying to shape what things they don't allow on their platforms among other things and it's interesting if you watch the testimony he gives where it seems like he like is either really evasive answering questions or just feigns ignorance it's like when he's asked questions like you know how many FBI informants or undercover agents were on the Capitol grounds on January 6th and it's like he doesn't know and be like how do you not know by this point there's no way you don't know uh but it doesn't seem like he'll face any consequences because of this so like it seems like either sheer incompetency or he's probably more likely lying but doesn't face any consequences so it's not clear how this uh accountability process can operate if bureaucrats are supposed to keep elected officials informed and when they don't well nothing happens I think another interesting thing if you watch some of the other questioning so I mean from some of the congressional republicans you know it's fun watching like Matt Gaetz for example like questioning Christopher Ray uh it gets real heated and it's it's entertaining uh it's awesome I just watched other questions so this is uh representative Hank Johnson from Georgia and he had this question he asks director Ray are you aware that MAGA republicans have repeatedly called for the FBI to be defunded can you briefly describe for us what the effect would be on our national security or domestic tranquility if the FBI were defunded or dismantled and so like yeah just throwing them this softball like tell us how great your agency is and I find that interesting in that I mean you think they'd at least want to like maintain the I mean the facade of this adversary not necessarily adversarial but we're here to hold you accountable I mean I think of the if you're familiar with uh the professional wrestling terminology kayfabe where like if you know Hulk Hogan and Andrei the giant you know they're supposed to hate each other in the ring if they're seen out and they're not supposed to be seen out in public together like being buddies you know they have to maintain the kayfabe make it seem like they are actual enemies and like I don't know maybe that's what the republicans are doing like they get really heated and uh they're questioning but then nothing happens so yeah you gotta yeah I'm trying to understand that what what kind of image because this does it seems detrimental it's like oh you guys seem too buddy buddy but then maybe the other ones are just uh fake fighting uh no and lastly talking about uh deep state within well the bureaucrats within the deep state within the bureaucracy generally they're supposed to be an accountability process that is like the department of justice does these prosecutions um sometimes or they may fail to prosecute misconduct it seems like there's a lot of that ladies to me for example this is a special counsel John Durham and uh so he was appointed special counsel to investigate the FBI's uh crossfire hurricane operation that is uh the crossfire hurricane was this investigation into the Donald Trump campaign um regarding uh Russia collusion these kinds of things and I mean if you watch the testimony he gives about that I mean he says all these things like the FBI didn't have an adequate basis to launch crossfire hurricane uh they failed to examine all available exculpatory evidence as evidence showing that this what your investigating isn't happening they continued the investigation even when case agents were unable to verify evidence such as that provided in the steel dossier that was paid for by the Clinton campaign they did not interview key witnesses and individuals abused their authority under the FISA Act they got all these warrants that they did not have uh real sufficient evidence to acquire and it's like did anybody get in trouble for this it's not clear this seems like yeah you just I mean he did his investigation like yeah a lot of bad things happen that's too bad um I kind of feel like Chris Farley in talking to Bill Barr this is the attorney general it's like why isn't anybody getting in trouble um so yeah it's a strange thing um yeah this failure to prosecute so like if you are doing these operations try like what's the incentive not to do that anymore like if it's consequentless yay and additionally say this failure to prosecute also includes elected officials or the family members of elected officials um so again it's not necessarily adversarial between the deep state and these other elements it may be symbiotic okay so yeah we're cruising so some concluding thoughts now obviously I've probably failed to keep this a mostly positive rather than normative analysis but so say you think this isn't great say you think this is a bad thing what might be done from a Misesian perspective so would that be uh on defund the FBI or defund the deep state as uh representative Hank Johnson suggested yeah I think Mises is into this idea uh to quote Mises as I like to do he says this in uh bureaucracy says the two pillars of democratic government are the primacy of the law and the budget the administration in a democratic community is not only bound by law but also by the budget democratic control is budgetary control the people's representatives have the keys of the treasury not a penny must be spent without the consent of parliament so what he's saying there is like okay if these you bring in these uh deep state guys question number four congress and they're evasive they lie to you uh nothing else you can cut their budget that's always within the power of congress of the elected officials so that's one possible response I think also like more generally reduce the role of the state throughout bureaucracy Mises says oh people complain about bureaucracy it's this pejorative term people hate dealing with it people think of the you know the dmv as depicted earlier or any other time you interact with the government people think it's unpleasant and I think that's bureaucracy and what Mises says is well anything you're having the state do it's going to be run bureaucratically it can't be run according to profit and loss and consumer preferences and these kinds of things so it's like your problem isn't necessarily with bureaucracy as such it's with the state doing these things because I mean if the state's doing these things it's going to do them bureaucratically so it's not the case that you can have this expansive role for the state and not have the bureaucracy like they're intertwined so if you want to ameliorate this problem of bureaucrats in the deep state like make the state smaller shrink the bureaucracy have the state responsible for fewer things um so that's uh all the high I have thank you for your attention