Native Americans: Victims of Bureaucracy

Michael Adamson received an M.B.A, from Arizona State University in 1986. and is a management information systems consultant in Phoenix.

Despite the individual rights to life, liberty, and property upon which the United States was founded, significant violations of these rights have not been uncommon throughout our history. The U.S. Constitution originally condoned slavery and counted the black slave as a mere three- fifths of a person for purposes of determining representation. Japanese-Americans were interned by the thousands in concentration camps during World War II because many citizens and politi cians of European descent considered them something less than American and therefore potential subversives. For decades, state laws limited the property rights and freedom to contract of women in marriage as well as their right to vote. Until the Civil Rights movement, areas in the South practiced a limited form of apartheid, segregating whites and blacks in schools and other public places.

Yet no group of people has suffered, and continues to suffer, from an illiberal and dis criminatory government policy as have the 1.4 million people collectively referred to as Native Americans. As the nation commemorates the 200th anniversary of the United States Constitution, it behooves us to examine the Indian policy of our government.

The Bureau of Indian Affairs is the principal ‘agent in carrying out the government-to- government relationship between the United States and Federally-recognized Indian tribes, and is therefore the focus of this paper. This agency isunique in that it is the only Federal agency whose expressed function is to manage the affairs of a particular ethnic group.

From Conquest to Control

By any criterion, the economic and social standards of living are lower among Native Americans than among the balance of the U.S. population. Unemployment on or adjacent to reservations fluctuates around 40 per cent. Of some 750,000 Native Americans on reservations, 75 per cent earn less than the national average.[1] Leading causes of death among Native Americans are accidents, heart disease, malignant neoplasms, and cirrhosis of the liver, all far above national averages and a significant proportion of these related to alcohol abuse. Drug abuse, mental illness, and obesity are major health problems. Tuberculosis cases are 4.5 times the national average and deaths from the illness are 9.5 times as frequent. Suicide is more than twice as likely among Native Americans. Their life expectancy is about five years below the average American’s and infant mortality rates are 25 per cent higher.[2]

While such facts may illustrate the plight of the Native American, they do not explain why such conditions exist. I will argue here that they exist primarily because bureaucratic management is no more appropriate (and yields equally disturbing results) for a group of people defined by race than for a group of people defined by occupation, sex, region, or any other demographic characteristic. U.S. Indian policy is all the more offensive as it is perpetrated by one race of people upon another. Indeed, a Native American is defined by blood percentages, leading Russell Means, head of the American Indian Movement, to comment that only Nazi Germany “defined purity of blood as a measure of who you are as an individual.”[3]

Bureaucratic Management

The Bureau of Indian Affairs is a bureaucracy. As a public sector organization, it is disciplined by laws, regulations, and government budgets. This form of management is in contrast with profit management, which is disciplined by the rules of the marketplace and the buying decisions of sovereign consumers.[4]

Because bureaucracies are not disciplined by profits and losses, the only way to restrict bureaucratic spending is with detailed rules and regulations. In a bureaucracy, the premium is not on flexibility, but control of appropriated public funds.[5] Thus, the bureaucratic features of government are inherent in bureaucracy itself—they cannot be “reformed” away. The only choice is between profit management and bureaucratic management.[6]

In the case of Native Americans, the government has chosen the latter path, and only rarely has this path been benign. The history of U.S. Indian policy is one of conquest of an indigenous people by foreigners who viewed themselves as superior. Until the 1960s, the official goal of this policy was assimilation, which ignored cultural reality and left a legacy of poverty, disease, and broken traditions.[7]

Article 1, Section 8 of the United States Constitution declares that “Congress shall have power . . . to regulate commerce with foreign nations, and among the several States, and with the Indian tribes.” The latter were thought of as separate nations to be dealt with through treaties in accordance with international law. Their affairs were not to be intruded upon and relations were to be conducted by the central government.

In reality, Congress established criminal jurisdiction and economic surveillance over the Native Americans so that their freedom to make decisions was gradually reduced. As S. Lyman Tyler notes, as “Indian leaders were no longer free, they could no longer be truly responsible.”[8] Policy ultimately was to have white settlers expand territorially and have the Native Americans withdraw; conquest would be restrained and governed, not prevented.

With the Indian Removal Act of 1830, a formal removal policy was enacted. The so-called Five Civilized Tribes of the Southeast were marched on the “Trail of Tears” to land which is now Oklahoma.

As a practical measure, removal and conquest gave way to a reservation policy. On the reservation, the Native American was to be taught “the arts and habits of civilization.”[9] The role of traditional leaders was bypassed and made ineffective. This policy of relocation and cultural restructuring destroyed initiative, self-reliance, integrity, and spirit. The need and responsibility for providing one’s food and shelter was taken away. Native Americans were made wards of the government.

From 1887 to 1934, Native American land holdings shrank from 135 million acres to 40 million acres under an allotment policy which gave individuals 40- to 160-acre plots as their own property. Scandals resulting from the acquisition of oil leases and forest lands were rife. Rather than become farmers through land ownership, many individuals sold off their allotments and consumed their wealth.

The Indian Reorganization Act of 1934 initiated efforts to revive functional tribal govern ments. However, when tribes tried to exercise their rights of self-determination under this Act, bureaucrats obstructed them by restricting tribal use of resources.[10]

The passage of House Concurrent Resolution 108 established a policy of termination in 1953. Congress intended to make Native Americans subject to the same laws and privileges as other Americans (though the question of their dual citizenship under a 1924 act remained unresolved). Termination Acts passed from 1954 to 1962 affected 60 California and Oregon tribes and hundreds of smaller bands. This policy failed, as the Indians, who had been subjected to the almost wholesale destruction of their culture, were unable to function in the modern, Anglo- dominated environment.

By 1970, President Nixon announced a policy of self-determination, which recognized the rights of Native Americans to be different and to determine their own future President Reagan reaffirmed this policy in 1983, but criticized its implementation as having been no more than rhetoric. Excessive regulation and a self-perpetuating bureaucracy had stifled local decision- making and fostered tribal dependency.[11]

The conclusion one may draw from this assessment is that the excessive regulation and the stifling bureaucracy should be eliminated. President Reagan stopped short of this, however, and today the Federal bureaucracy still dominates the conduct of Indian affairs through subsidy, if not outright control.

The Consequences of Management

The mission of the Bureau of Indian Affairs is to act as the principal agent in carrying out (1) the government-to-government relationship between the United States and Federally-recognized Indian tribes and (2) the responsibilities of the United States as trustee for the property it holds for tribal units.

The second point is curious, as it has more or less developed as a self-proclaimed and self- sustained doctrine shrouded in the legal and moral obligations the U.S. government established for itself toward the Native American. The legality of this is based on the 1831 Supreme Court decision in Cherokee Nation v. Georgia, where the Court held that Indian tribes have all the rights of sovereignty except those taken away or limited by Congress. This decision was “a direct outgrowth of English law and practice which held that title to newly-discovered lands was in the Crown . . . but subject to a compensable right of occupancy by an aboriginal people.”[12]

It is true that Native Americans have done nominally better under self-determination. From 1972 to 1977, Indian-owned businesses increased 300 per cent, principally in oil and gas, forestry, and bingo. Control over local community issues is more in the hands of tribal governments. Yet, the Bureau of Indian Affairs holds its position that it should be a provider of resources and protector of tribal interests. And as any self-respecting bureaucratic agency would be expected to do, the Bureau seeks to expand the dollar volumes of the programs for which tribes contract for services, including education and health.

While official policy states that the Native American ought to be free to determine his or her future, to what extent can the various tribes be independent of Federal aid and the controls which accompany such aid (for that matter, how independent can any group of people be in such a relationship)? Federal commitments to provide tribes with health, education, and welfare benefits, in exchange for reservation lands, are remnants of a trust responsibility founded in mercantilist colonialism.

Historically, government has been assumed to be the best protector of property, both on and off the reservation. The state maintains the right to protect resources, rather than protect the individual’s right to their use. This is evident in the trust agreement which has evolved out of the restrictions on Native Americans to develop the resources at their disposal.

Under this system, disputes over the use of property are political in nature, and the public manager chooses among special interests. Where Native American tribes dispute over land, for example, as have the Navajos and Hopis in northern Arizona, political solutions of the Bureau of Indian Affairs are unable to resolve the conflict, which is a fundamental question about property rights. Where the mechanisms of the market and freedom are bypassed, social and economic chaos is the result, affecting millions of lives.

The quality of property management is determined by the structure of the property rights in force. Public managers produce outcomes which please no one “because they are faced with ill- defined multiple use mandates and have no personal stake in decisions.”[13] The trust agreement which is so hallowed by the Bureau of Indian Affairs leads to the attrition of reservation lands and the abridgment of rights to remaining properties.

American Indian policy has promoted government-guaranteed security over freedom. Laws have governed the rights to spend money and own land. The reservation system was enforced through dependency: The Native American knew that he could drink and gamble his money away and be sure to keep his home and land.[14]

Government subsidies and controls mask the consequences of irresponsibility. If conditions are not established which permit failure, failure is collectivized and compounded throughout the culture.[15] As governmental efforts to provide “security” are increased, and the market is further hindered, the more elusive this security becomes.[16]

It is remarkable how similar this policy is to the institution of slavery in the pre-Civil War South, Both policies were established and justified on racial grounds, where the master cares for an individual after denying him fundamental rights as a human being. Like many slaves, a distressingly large number of Native Americans have lost the ability to provide for themselves. The main difference between our Indian policy and outright slavery is that in the case of Indians, the conqueror stopped one step short of total subjugation and could not fathom what to do next.

Instead of trying to administer socialism in a more efficient manner (through staffing the Bureau of Indian Affairs with Native Americans and giving them more say in how they want to be administered, for example), the U.S. must examine whether a policy for a particular racial group is warranted at all. Then, perhaps, the policy-makers might discover the inherent racism of such a policy.

Government management of Indian Affairs is incompatible with a free society. The Bureau of Indian Affairs administers a racist policy—not unlike the apartheid system of South Africa—which has decimated the initiative of a once-proud people. Yet the pre-reservation Native American was capable of administering his own affairs. He will be able to once again pursue his cultural, social, and economic potential only when the Bureau of Indian Affairs has been abolished. The property this agency commands should revert to the Native Americans, who must be free to exercise their property rights over it as they choose. As with any social group, only freedom can produce desirable social and economic results. The Native Americans must be given the opportunity to reaffirm this.


1.   “Luring Jobs to the Rrservations,” Business Week, July 16, 1982, pp. 80-81.

2.   U.S. Department of the Interior, Information Profiles of lndian Reservations in Arizona, Nevada and Utah (Phoenix: Bureau of Indian Affairs, 1981).

3.   Larry Dodge, “Reason Interview: Russell Means,” Reason, August-September. 1986. p. 23.

4.   Ludwig von Mises, Bureaucracy (New Haven: Yale University Press, 1944).

5.   Gary North, “Statist Bureaucracy in the Modern Economy,” The Freeman, January, 1970, pp. 16-28.

6.   Mises, op. cit.

7.   S. Lyman Tyler, A History of Indian Policy (Washington: U.S. Government Printing Office, 1973).

8.   Ibid., p. 31.

9.   Ibid., p. 72.

10.   Allen C. Quetone, “Indian Self-Determination: The Human Factor,” Public Administration Review, 44 (1984), pp. 533-538.

11.   Office of the Federal Register, Weekly Compilation of Presidential Documents (Washington: U.S. Government Printing Office, 1983), pp. 98-102.

12.   Vince Lovett and Larry Rummel, American Indians (Washington: U.S. Government Printing Office. 1984). p. 7.

13.   E. Barry Asmus and Donald B. Billings, “Environmental Problems and Private Property,” The Freeman, December, 1985, p. 752.

14.   R. J. Rushdoony, “Life on the Reservation” (Foundation for Economic Education, Clipping of Note, Number 27).

15.   North, op. cit.

16.   Friedrich A. Hayek, The Road to Serfdom (Chicago: University of Chicago Press, 1944).