More economics in the movies: discovering the modern theory of bureaucracy in scenes from conspiracy and Valkyrie.

Mixon, Franklin G., Jr.

INTRODUCTION

This essay describes how the elements of the modern theory of bureaucracy (Breton and Wintrobe, 1982), and its application to (1) the Nazi Holocaust (Breton and Wintrobe, 1986; Mixon, Sawyer and Trevino, 2004a and 2004b; Mixon and King, 2009; Mixon and Trevino, 2009) and (2) the 20 July 1944 plot to kill Adolf Hitler (Mixon, Sawyer and Trevino, 2004b), can be integrated, and in an innovative way, into the "Bureaucracy Theory" portion of an undergraduate course in public choice economics. Specifically, this article shows how the theory and its applications above are reconstructed in the movies Conspiracy (HBO Films, 2001) and Valkyrie (United Artists, 2008), respectively, and it suggests scenes from each movie that can be incorporated into classroom discussion of the modern theory of bureaucracy.

Given the paucity of specialized undergraduate textbooks in this genre of economics, an "economics in the movies" approach to pedagogy like that described in Mateer (2004 and 2009), Dixit (2006), Sexton (2006) and Mateer and Li (2008) could be quite beneficial. As Mateer and Li (2008: 303) point out, among the pedagogical advantages to using short film scenes to introduce economic concepts are (1) increased student engagement, (2) an enhanced ability to critically analyze core content, and (3) the availability of an alternative to the lecture-discussion format. They also add that this new approach can, unlike some other pedagogical techniques, complement the traditional development of economic theory without sacrificing a significant amount of class time (Mateer and Li, 2008: 303).

This essay begins with a brief review of the relevant literature, including a summary of the modern theory of bureaucracy. This summary is followed by a description of how the theory has been applied to the Nazi Holocaust and other elements of the history of Nazi Germany. From there, some scenes from the movies Conspiracy and Valkyrie are presented as useful tools for teaching undergraduate economics students about the modern theory of bureaucracy.

A BRIEF REVIEW OF THE RELEVANT LITERATURE

It is not often that a new way of approaching a subject is accompanied by an example as compelling as that Breton and Wintrobe (1986) used to illustrate the applicability of their modern theory of bureaucracy (Breton and Wintrobe, 1982). The traditional theory of bureaucracy in Niskanan (1971) argues that government bureaucrats seek to increase their power, influence, and other job-related perquisites by engaging in the process of budget-maximization (Shughart, 2008; Olson, 2008). (1) In this formal model, bureaucrats are able to capitalize on the lack of technical know-how exhibited by those in the legislature who provide resources for the bureaucracy, and on what Downs (1957) characterized as the "rational ignorance" of voters (the electorate), who represent the other principals (along with legislatures) who might constrain the activities of bureaucrats and bureaus (Shughart, 2008; Olson, 2008). At the same time bureaucracies seek growth, there is a general consensus that they are inefficient and inflexible, a conclusion that stems partly from a lack of information they confront as a result of their output being indivisible and unmarketable (Olson, 2008).

Breton and Wintrobe's (1982) modern theory of bureaucracy is based in large part on the ideas of "vertical trust networks" and "informal payments." According to the model, subordinates within a bureaucracy provide top-level bureaucrats with "informal services" that are the result of their own enterprise and initiative, and that advance the aims of the bureaucracy's leadership. The bureau's subordinates also trust that the bureaucrats will later reward them informally by providing opportunities for more rapid advancement (promotion), better offices, travel, etc. These perquisites are all quid pro quos that are not part of formal contracts between bureaucrats and a bureau's subordinates, and often result from trades that are described above as inter-temporal in nature (Breton and Wintrobe, 1982 and 1986; Mixon, Sawyer and Trevino, 2004a and 2004b). Use of such an informal payments mechanism allows bureaucrats to establish a competitive process in the promotion of the bureau's goal(s), and one which provides greater efficiency and flexibility.

Breton and Wintrobe's (1986) application arrived through their article in the Journal of Political Economy titled "The bureaucracy of murder revisited," wherein they point out that the traditional theory of bureaucracy fails to explain how the Nazi bureaucracy formed as a conglomeration of competing agencies that (for a time) carried out the large-scale "Final Solution" to the "Jewish question" (Mixon, et al. 2004b). As Mixon et al. (2004b: 372) explain, the Breton and Wintrobe (1986) model is not only well-suited to explain how a quasi-government bureaucracy carried out the systematic murder of six million people in a relative short period of time, it is also adept at establishing the guilt of the bureau's subordinates who claimed (in judicial proceedings and interviews) to simply have been carrying out orders from superiors in the bureaucracy. (2) The Breton and Wintrobe (1986) story of the Nazi Holocaust is built mainly around that of Adolf Eichmann, the SS- Obersturmbannfuhrer in Subsection IV-B-4 (Jewish affairs) of the Reich Central Security Office, who (for a time) showed significant enterprise and initiative in the promotion of the systematic murder of Europe's Jews throughout the early 1940s. As a result, Eichmann advanced from the 45th percentile of the Nazi Holocaust bureaucracy to the 65th percentile, all from 1938-1941 (Mixon, et al. 2004a: 863).

The following section describes how the elements in the modern theory of bureaucracy (Breton and Wintrobe, 1982), and in its application to the Nazi Holocaust (Breton and Wintrobe, 1986; Mixon et al. 2004a and 2004b) and the 20 July 1944 plot to kill Adolf Hitler (Mixon et al. 2004b), can be integrated, and in an innovative way, into the "Bureaucracy" portion of an undergraduate course in public choice economics. Specifically, section 2 below shows how the modern theory of bureaucracy and its application are reconstructed in the movies Conspiracy (HBO Films, 2001) and Valkyrie (United Artists, 2008), respectively. In doing so, this article highlights scenes from each movie that can be incorporated into classroom discussion of the theory and its application to the Nazi bureaucracy of the 1940s.

THE MODERN THEORY OF BUREAUCRACY: A LOOK AT THE MOVIES

As stated earlier, there are few instances where an application of a model or theory is more compelling that that represented by the Breton and Wintrobe (1986) application of their own modern theory of bureaucracy (Breton and Wintrobe, 1982) to events constituting the Nazi Holocaust. The kinds of bureaucratic entrepreneurship that give rise to informal services and payments that are part of vertical trust networks described by Breton and Wintrobe (1982) fit well into the "Bureaucracy" portion of an undergraduate course in public choice economics, and they are relatively easy to impart to students without the requirement that students acquire Breton and Wintrobe's 1982 book. (3) After such an exposition, Breton and Wintrobe's compelling 1986 article on bureaucratic entrepreneurship in the Third Reich is accessible to, and appreciated by, students. (4)

Another option for integrating the Breton and Wintrobe (1982) modern model of bureaucracy in a public choice economics course is to employ a Hollywood adaptation of one of the more important aspects of the Nazi Holocaust--the Wannsee Conference of 1942. That adaptation comes via HBO Films' 2001 movie Conspiracy, and pedagogical use of a television movie adaptation of the 1942 Wannsee Conference follows the recent wave of using movies and television to teach undergraduate economics that is emphasized in Mateer (2004 and 2009), Dixit (2006), Sexton (2006) and Mateer and Li (2008).

Conspiracy was written by Loring Mandel, who won an Emmy Award for Best Writing, and it received 10 total Emmy nominations. (5) Another of the 10 nominations turned into a victory for Kenneth Branagh, who received a Lead Actor Emmy for his portrayal of Reinhard Heydrich, Chief of the Reich Central Security Office (RHSA) who "chaired" the 1942 Wannsee Conference. The role of Adolf Eichmann, the leading figure in Breton and Wintrobe (1986), is played by Stanley Tucci, an Emmy and Golden Globe Award winner for his work in the movie Winchell. Most of the Conference participants, and their Conspiracy counterparts, are listed in Table 1.

Conspiracy is rich in instances wherein aspects of Breton and Wintrobe's (1982 and 1986) competitive model of bureaucracy--one which provides greater efficiency and flexibility than that depicted in earlier models of bureaucracy--are superbly reconstructed in the story of the Nazi bureaucracy's goal of genocide. Several instances have significant pedagogical value, such as the scene in the movie wherein Heydrich reads aloud a memo which is believed to have been penned by himself, but was actually signed and sent to Heydrich by German Reich Marshall Hermann Goring, authorizing a "solution" to "the Jewish question." The memo authorizes a solution involving "emigration or evacuation in the most favorable way possible" of the Jews living in the German sphere of influence within Europe.

As Breton and Wintrobe (1986) state, one indicator of competition among bureaus (bureaucrats) or within bureaus concerns the imprecision of orders from higher echelons within the bureau or bureaus (Mixon et al. 2004a: 858). In Conspiracy, Heydrich and the other Wannsee Conference participants wrangle with the lack of precision in the term "evacuation," which Heydrich takes to mean the "cleansing" of Europe's Jews, itself an imprecise term. As Mixon et al. (2004a: 866) point out, the fact that Heydrich had to interpret (for others) a memo that he penned himself is itself interesting; that Heydrich's interpretation was also imprecise remarkably supports the Breton-Wintrobe thesis that vague and imprecise directives motivate would-be bureaucratic entrepreneurs into devising innovative and enterprising initiatives that assist the bureau in achieving a goal. (6) These ideas are reinforced through some of the pre-Conference conversations portrayed in Conspiracy. It is in one of these that Josef Buhler, the Secretary of State in the Office of the Government General of Poland, who is portrayed in Conspiracy by British actor Ben Daniels, offers dialogue that supports the discussion above concerning Heydrich's memo. In a pre-Conference conversation scene Buhler says ". . . we will soon discover what new concepts our SS friends have in mind [for addressing 'the Jewish question'] . . ." It is through statements like this one that enterprise and initiative in putting forward "solutions" to "the Jewish question" included new and innovative ideas, concepts, initiatives, and policies (Mixon et al. 2004a: 866). (7)

Once the framework for bureaucratic competition and entrepreneurship is established, as it was with the Nazi's Wannsee Conference of 1942, the role of vertical trust networks, with the attendant informal payments and informal services that are discussed above, take over the process of achieving the Nazi Holocaust bureaucracy's goal of genocide. The benefits of these relationships to the Nazi bureaucracy's superiors, and their attendant trades, are not seen in Conspiracy. However, pre-Conference vertical trust networks, along with some of the concepts used in the genocide of Lithuania's Jews (during the fall of 1941), are described by Mixon et al. (2004b: 374-376) in a way (i.e., non-technical, brief) that allows public choice economics instructors to supplement scenes from Conspiracy with passages and tables from some of the historical episodes. (8)

The antithesis of vertical trust networks in the Breton and Wintrobe (1982) model are "horizontal trust networks." These are networks that exist between officials who operate at roughly the same level of a bureaucracy's management structure. They are seen as being inefficient, in a large numbers setting such as in the Nazi Holocaust bureaucracy, from the leadership's perspective because cooperation among similarly-situated subordinates often works to thwart the goals of the bureau's leadership (Breton and Wintrobe, 1982 and 1986; Mixon et al. 2004b). According to Mixon et al. (2004b: 376), "[t]he history of the Nazi regime provides an insightful example of an extreme form of horizontal network inefficiency: the 20 July 1944 plot to kill Adolf Hitler." In just a few pages, Mixon et al. (2004b: 376-378) provide details of the plot as an example of horizontal trust networks in a way that both generalizes and supplements Breton and Wintrobe's essay on the Nazi Holocaust bureaucracy and Adolf Eichmann's role in advancing it. In that way, Mixon et al. (2004b) can be integrated into the bureaucracy discussion of a public choice economics class relatively easily.

As in the case of vertical trust networks described above, the academic literature on horizontal trust networks in the Nazi Holocaust bureaucracy (i.e., Mixon et al. 2004b) can also be supplemented with scenes from a movie. In this case that is the motion picture Valkyrie, released by United Artists in 2008, and starring Tom Cruise as German Reserve Army Colonel Claus Schenk Graff von Stauffenberg, the central figure in the 20 July 1944 plot to kill Hitler.

As Table 2 points out, Cruise is joined in Valkyrie by Kenneth Branagh who portrays Henning von Tresckow, and by Tom Wilkinson, Bill Nighy, and Terence Stamp, who play German Reserve Army Commander Freidrich Fromm, German Reserve Army Colonel General Freidrich Olbricht and retired Chief of General Staff Ludwig Beck, respectively. Directed by the critically acclaimed Bryan Singer, each of these actors performs solidly in their respective roles.

The scenes and dialogue also provide a portrayal of the concept of horizontal trust networks found in Breton and Wintrobe (1982 and 1986). Though Valkyrie is more of an action movie than Conspiracy, one critical scene in Valkyrie depicts Stauffenberg meeting, for the first time, the plot's original conspirators. To set the scene, Stauffenberg has only recently recovered from wounds suffered during the German retreat in North Africa, and he is, at the time of the meeting scene described earlier, an officer in the German Reserve Army. Stauffenberg (Cruise) is urged to meet the original conspirators by Olbricht, and after being received at the meeting by von Tresckow, and he is impressed by what he learns about the lofty positions the conspirators hold (or once held) in various branches of the larger Nazi (German) bureaucracy. The positions fall under the military/intelligence, diplomatic, political and civil corps of the Nazi (German) bureaucracy, as pointed in Mixon et al. (2004b) and in Table 2.8 After hearing how the original conspirators appear to have all of the bases covered for building a new, post-Hitler Germany, Stauffenberg questions his presence in the room to von Tresckow and the others, and attempts to exit. Though sympathetic to the cause, by military rank Stauffenberg does not necessarily fit into the horizontal trust network that he is being introduced to in this scene. However, he is convinced that the act of tyrannicide has to be carried out, and that, given his inclinations and position in the Reserve Army, he might have the means and opportunity to assist.

In giving his assistance to the plot, Mixon et al. (2004b: 377) explain that Stauffenberg, and others at his level, or a lower level in the larger Nazi bureaucracy, contributed "vertical loyalty" (i.e., they formed a vertical trust network) to assist those in the horizontal trust network presented in Table 2. Though not as rich in the quantity of scenes and dialogue with pedagogical value as Conspiracy, the particular scenes from Valkyrie described above really hit a mark with regard to capturing part of the Breton and Wintrobe (1982 and 1986) concept of horizontal trust networks in bureaucracy.

CONCLUDING COMMENTS

The recent wave of using movies and television to teach undergraduate economics, emphasized in Mateer (2004 and 2009), Dixit (2006), Sexton (2006) and Mateer and Li (2008), is potentially most beneficial in those economics courses for which the publishing industry has yet to produce a specialized textbook. That is the case with an undergraduate course in public choice economics. Here, some instructors adopt books of readings, supplemented by a reading list containing published journal articles, while other instructors simply opt for the latter.

This article provides some guidelines for integrating "economics in the movies" into a part of a public choice economics course. Various scenes from the HBO Films (2001) production of Conspiracy, and at least one key scene from the United Artists (2008) production of Valkyrie, offer avenues for using movie scenes to explain critical aspects of the modern theory of bureaucracy (Breton and Wintrobe, 1982). Given the benefits of an "economics in the movies" approach like those described in this essay, its use to cover some of the bureaucracy theory portions of an undergraduate course in public choice economics might make for a successful pedagogical enterprise.

AUTHOR'S NOTE

The author thanks two anonymous referees of this journal for helpful comments on an earlier version of this article. The usual caveat applies.

REFERENCES

Breton, A. & R. Wintrobe (1982). The logic of bureaucratic conduct: An economic analysis of competition, exchange, and efficiency in private and public organizations, Cambridge, U.K.: Cambridge University Press.

Breton, A. & R. Wintrobe (1986). The bureaucracy of murder revisited. Journal of Political Economy, 94(5), 905-926.

Dixit, A. (2006). "Restoring fun to game theory," In W.E. Becker, M. Watts and S.R. Becker (Eds.), Teaching economics: More alternatives to chalk and talk (pp. 1-19). Cheltenham, U.K.: Edward Elgar.

Downs, A. (1957). An economic theory of democracy, New York, NY: Harper.

Mateer, G.D. (2004). Economics in the movies, Mason, OH: Thomson-Southwestern.

Mateer, G.D. (2009). Recent film scenes for teaching introductory economics. In F.G. Mixon, Jr. & R.J. Cebula (Eds.), Expanding teaching and learning horizons in economic education (pp. 165-172). New York, NY: Nova Science Publishers,.

Mateer, G.D. & H. Li (2008). Movie scenes for economics. Journal of Economic Education, 39(3), 303.

Mixon, F.G., Jr. & E.W. King (2009). Coercion, vertical trust and entrepreneurism in bureaucracies: Statistical evidence from the Nazi Holocaust. Economics Bulletin, 29(2), 681-687.

Mixon, F.G., Jr., W.C. Sawyer & L.T. Trevino (2004a). The bureaucracy of murder: Empirical evidence. International Journal of Social Economics, 31(9), 855-867.

Mixon, F.G., Jr., W. Charles Sawyer & L.T. Trevino (2004b). Vertical and horizontal trust networks in bureaucracy: Evidence from the Third Reich. Constitutional Political Economy, 15(4), 371-381.

Mixon, F.G., Jr. & L.J. Trevino (2009). The modern economic theory of bureaucracy as a precursor to New Public Management. Humanomics, in press.

Niskanen, W.A. (1971). Bureaucracy and representative government, Chicago, IL: Aldine- Atherton.

Olson, M.L. (2008). Bureaucracy. In S.N. Durlauf & L.E. Blume (Eds.), The New Palgrave Dictionary of Economics. New York, NY: Palgrave Macmillan.

Sexton, R. (2006). Using short movie and television clips in the economics principles class. Journal of Economic Education, 37(4), 406-417.

Shughart, W.F, II (2008). Public choice. In The Concise Encyclopedia of Economics, New York, NY: Liberty Fund.

ENDNOTES

(1) In Niskanen's (1971) formal model, the bureaucrat's power, influence, job-related perquisites are an increasing function of the bureaucracy's size or budget (Olson, 2008).

(2) As Breton and Wintrobe (1986) indicate, it is more difficult to establish the guilt of subordinates using earlier theories of bureaucracy.

(3) As many public choice scholars are aware, there is no specialized textbook for undergraduate courses in public choice economics. As a result, instructors often choose to assign (require) books of readings that generally contain published journal articles. Given the limited use of original source materials (e.g., Niskanen, 1971; Breton and Wintrobe, 1982) in any one portion of a semester-long public choice economics course, particularly those in book form, instructors may find it difficult to justify having students purchase those materials.

(4) Given the lack of public choice economics textbook options noted earlier, instructors often use reading lists containing various journal article publications from the genre. Though which articles to require (or recommend), if any, in each portion of the course is often a matter of personal preference, I have found that students show interest in the Breton and Wintrobe (1986) application of the modern theory of bureaucracy.

(5) Conspiracy consists almost entirely of the dialogue from the Conference, which is generally recognized as the origin of earlier-used terms such as "Final Solution" and "Jewish Question."

(6) Conspiracy contains other examples of imprecise language regarding the "Final Solution" that are not included in Mixon et al. (2004a). At the beginning of the Conference, Heydrich is shown stating that "We have a storage problem in Germany with these Jews," and that "I have been asked to direct the release of Germany and all of Europe from the Jewish stranglehold, and I believe that together we will." Emphasis has been added to the quotes above to highlight the other uses by Heydrich of imprecise terms that are hoped by him to motivate competitive behavior on the part of the Conference attendees and the branches or divisions of Nazi Germany that they represent. Heydrich's last line above, that he believes the group can together accomplish something with regard to the evacuation of the European Jews supports the Breton and Wintrobe (1982 and 1986) notion that a new or modern kind of bureaucracy was motivated to action in this case. Finally, it is interesting that in the movie Heydrich is pressed by the Conference attendees to judge some of their interpretations of "evacuation" and the other imprecise terms. At one point the movie portrayal of events even has Heydrich specifying his own preference for interpreting the term(s).

(7) At points in the movie Eichmann relays to attendees the preliminary results of various applications of "concepts" and "initiatives," such as mobile gassing vehicles and the infamous furnace systems that would ultimately used in the death camps. It is also worth noting here that Conspiracy portrays some of the perquisites that Nazi Holocaust participants might expect as a result of their successful "concepts" and "initiatives." Heydrich is shown stating to some Conference attendees how he is fond of the Wannsee mansion where the Conference was held, and that he expects it to become his post-war home.

(8) One lesson from Mixon et al. (2004a and 2004b) is that the "solutions" implemented by Einsatzkommando 3 in Lithuania in 1941 were inadequate for achieving the Nazi bureaucracy's ultimate goal of the "cleansing" of Europe's Jews (Mixon et al. 2004b: 375). For that the Nazi bureaucracy turned to another initiative developed in 1941, the construction of death camps like those at Belzec, Sobibor, and Treblinka (Mixon et al. 2004a: 861).

Franklin G. Mixon, Jr., Columbus State University

Table 1: Wannsee Conference Particpants as Portrayed in Conspiracy

 Conference Bureau Portrayed in
 Participant Conspiracy by

Reinhard Heydrich Chairman, Reich Central Kenneth Branagh
 Security Office (RHSA)

Dr. Alfred Meyer Reich Ministry for Occupied Brian Pettifer
 EasternTerritories

Dr. Georg Liebbrandt Reich Ministry for Occupied Ewan Stewart
 Eastern Territories

Erich Neumann Secretary of State, Reich Jonathan Coy
 Ministry for the Interior

Dr. Roland Freisler Secretary of State, Reich Owen Teale
 Ministry of Justice

Dr. Josef Buhler Secretary of State, Office of Ben Daniels
 the Government General of
 Poland

Dr. Martin Luther Under-Secretary of State, Kevin McNally
 Foreign Office Office

Gerhard Klopfer Party Chancellery Ian McNeice

Friedrich Kritzinger Reich Chancellery David Threlfall

Otto Hofmann Race and Settlement Main Nicholas
 Office (RuSHA) Woodeson

Heinrich Muller Reich Main Security, Gestapo Brenden Coyle
 Chief

Adolf Eichmann Reich Central Security Office Stanley Tucci
 (RHSA,Subs. IV-B-4)

Dr. Karl Schongarth SD Chief of the General Peter Sullivan
 Government of Poland

Dr. Rudolf Lange SD Chief of Latvia Barnabay Kay

Sources: Mixon, Sawyer and Trevino (2004a) and HBO Films (2001).

Table 2: Conspirators in July 1944 Plot to Kill Hitler as Portrayed in
Valkyrie

Conspirator Position in Nazi Hierarchy Portrayed in
 Valkyrie by

Claus Schenk Graff Colonel, Reserve Army Tom Cruise
von Stauffenberg

Military/Intelligence Conspirators

Ludwig Beck Colonel General, Chief of Terence Stamp
 General Staff (retired, 1939)

Wilhelm Canaris Admiral, Head of
 Counterintelligence

Friedrich Fromm General, Commander of Reserve Tom Wilkinson
 Army

Adolf Heusinger Colonel General, Operations Matthew Burton
 Chief of the Army High Command

Erich Hopner Colonel General (dismissed,
 1941)

Gunther Hans von Field Marshall
Kluge

Friedrich Olbricht Colonel General, Reserve Army Bill Nighy

Hans Oster Major General,
 Counterintelligence

Erwin Rommel Field Marshall

Karl Heinrich von Colonel General, Military
Stulpnagel Government of France

Henning von Kenneth Branagh
Tresckow Major
General

Erwin von Field Marshall (retired, 1942) David Schofield
Witzleben

Diplomatic Corps Conspirators

Hans Bernd Diplomatic Office, Switzerland
Gisevius

Christian von German Ambassador to Italy
Hassell (retired)

Adam von Trott zu German Foreign Ministry
Solz

Political/Civil Conspirators

Carl Goerdeler Lord Mayor of Leipzig (former) Kevin McNally

Wolf Heinrich von Chief of Berlin Police Waldemar Kobus
Helldorf

Julius Leber Member of Reichstag (former)

Johannes Popitz Prussian Finance Minister

Sources: Mixon, Sawyer and Trevino (2004b) and United Artists (2008).