President-elect Donald Trump’s creation of a Department of Government Efficiency — DOGE, if you must — has inspired predictable responses.

To Trump’s supporters it promises fulfilment of his crusade against the Deep State, whatever that may be. To his detractors, it augurs (among other doleful consequences) conflicts of interest since the billionaires behind the project, Elon Musk and Vivek Ramaswamy, do a lot of business with the very agencies they will be scrutinizing.

Musk’s SpaceX and Tesla both garner billions in federal dollars, while Ramaswamy remains a major shareholder in a company he founded that is very much dependent on the government-biotech ecosphere. And despite the “D” at the front end, DOGE will not be a government agency, which means transparency will be voluntary.

Memory Lane

Trump’s full-bore attack on government inefficiency is not quite unprecedented. The Hoover Commission (directed by the former president Herbert Hoover, a mining engineer who three decades earlier had been celebrated for his organization of European relief after World War I), operated under the aegis of the Truman administration. It benefited from a level of bipartisanship that is difficult to imagine today. And one of the commission’s signal contributions was to recognize that while the president may be the federal government’s chief executive, he has little direct control over the management of what are now over 400 federal agencies.

In the UK, France and Japan, a class of civil servants, all top graduates of elite universities, presides over government agencies. Indeed, the only slightly exaggerated premise of the British television comedy “Yes, Minister” was the ability of this permanent bureaucracy to obstruct and/or shape policy while wearing a mask of deference to politically appointed superiors. American presidents, I suggested in a recent article, generally depend more on a cadre of political appointees, lawyers and academics who return to their private roles when administrations change. “American mandarins,” I called them, echoing journalist-historian David Halberstam’s coinage in his book The Best and the Brightest.

Trillion-Dollar Distractions

In my view, though, the real problem is not who’s in charge, but where their priorities lie. The question should not be the qualifications of Musk, Ramaswamy and company, but the value of maximizing narrowly defined efficiency itself.

I was an executive editor at Princeton University Press in the 1980s, when the Press published a study — A Fragile Power: Scientists and the State — by the University of California (San Diego) sociologist, Chandra Mukerji, whose research subjects were scientists at UCSD’s renowned Scripps Institution of Oceanography. From the perspective of an efficiency commission, many of their abstract studies funded by the Office of Naval Research and other government agencies would have seemed to have no payoff for the nation’s defense. But Mukerji discovered a tacit agenda behind the government’s support of pure science.

A global power needs access to a vast range of information, much of which requires fresh research in a hurry. There is seldom time to recruit and train experts when the demand is evident. So there must be a reserve army of them — and that is just what Mukerji found at Scripps.

Similar logic has applied in corporate research. For many years, IBM’s laboratories were home to the world’s greatest experts on the ergonomics of keyboards. Their presence, I learned, was not aimed at producing new keyboards — the original IBM PC’s clicky models are still among the best ever produced. But IBM wanted to be sure that if there was a breakthrough it would be at an IBM lab rather than a competitor’s.

By the late 1980s, this way of thinking was out of fashion in a business that had become laser-focused on market share. So, many in this guru-staff category at IBM (as well as at post-AT&T-breakup Bell Labs) departed willingly or unwillingly to academia. 

Myopia Reigns

Apart from the reserve function of apparently inefficient expenditures, there is the issue of the efficiency paradox — the risk that too much efficiency in the short run can make organizations less efficient in the long run. Government, like industry, must sometimes invest in many initiatives to find the few that work. Conversely, systems that promise efficiency can, over time, produce the opposite effect. 

Consider the Defense Logistics Agency, which according to Politico “buys things the military doesn’t need — like 80 years’ worth of frames for a plane that will likely be out of use long before then.” In 2010, the Government Accountability Office had estimated that about half of DLA’s inventory — said to be worth nearly $14 billion at the time — was “just taking up space.” And since the Politico article was published in 2015, the Department of Defense has been audited eight times without passing even once.

Who bequeathed to us this poster child for waste? Some ambitious career bureaucrat or fifth-column Russian asset? Au contraire: It was America’s greatest efficiency pundit of the 1960s, the former Ford Motor CEO superstar Robert S. McNamara who brought the Pentagon out of the dark ages by imposing his business-like Planning Programming Budgeting System on the Pentagon. McNamara should not necessarily be blamed for what posterity did to his system as decades passed. But PPBS is a reminder that commercial management genius does not transfer well to government.

Nor does the private sector’s own enthusiasms offer much evidence of the efficiency of the efficiency movement. Academics who have studied the troubles of the once-iconic Boeing Corporation date the beginning of the decline to its merger in 1997 with competitor McDonnell-Douglas, whose “efficiency-minded” executives took control of the larger corporation that had been run by aviation enthusiasts. Short-term economies eventually bit back with a vengeance when, thanks to shortcuts in software and training development, new Boeing 737 Max models crashed in 2018 and 2019. Then a window blew out on another 737 Max in early 2024 thanks to lapses in quality control.

Boeing’s compensation to Alaska Airlines alone after the window mishap has reached $160 million. And after endless delays in delivering back-ordered aircraft that have wreaked havoc with commercial aviation (not to mention a $6 billion loss in the third quarter of 2024) the company now faces radical restructuring.

. . .

There is nothing inherently wrong with another broad-bore investigation of government efficiency. But after decades of management fads that are the stepchildren of McNamara’s PPBS, a more nuanced idea of efficiency is in order. This idea has been gaining traction on Wall Street — if not yet in Silicon Valley, which has reacted to its first lull in demand with panicky mass layoffs. As the economist and former Warburg Pincus Vice Chairman William H. Janeway has put it, “Efficiency is the enemy of innovation.”