bureaucracy is getting bodied by AI

some thoughts on markets, merit, and the disruption of everything

Last week, I spent three hours in a waiting room that smelled like industrial disinfectant and broken dreams, holding a pile of forms I'd already filled out twice. The receptionist, armed with that particular species of power that comes from controlling access to someone else's calendar, informed me that Dr. HooHa¹ was running behind. Again.

Sitting there, watching my afternoon dissolve into institutional quicksand, I found myself doing that thing I always do when trapped in bureaucratic purgatory: calculating the economic inefficiency per minute. My time, the doctor's time, the receptionist's time, the cleaning crew's time, all of it hemorrhaging value into the ether of "that's just how things work."

This isn’t just about healthcare. This is about a fundamental architecture of human organization that we've somehow convinced ourselves is necessary. The gatekeeping. The credentialism. The endless layers of permission required to access what should be basic human capabilities.

But here's the thing that really pushed me over the edge: I went home that night and had a more insightful and diagnostically useful conversation about my symptoms with ChatGPT than I'd managed with three different medical professionals over the past year. Not because ChatGPT is smarter than doctors—it isn't (or is it??)—but because ChatGPT doesn't operate within a system designed to ration access to intelligence.

What’s more, AI isn't just democratizing access to information. It's decentralizing competence. There's something profound hiding in that distinction. The difference between having access to knowledge and actually being able to do something with it. It feels like we’re standing at the edge of something enormous. And quite lucrative.

Scene from the Life of a Bureaucrat by Nikolay Koshelev

the democratization of competence—

For most of human history, competence was scarce. If you wanted legal advice, you needed a lawyer. Medical insight required a doctor. Financial planning demanded a CPA. These weren't arbitrary restrictions—expertise genuinely was rare, expensive to develop, and difficult to transmit.

But what happens when that fundamental scarcity disappears?

Don’t get me wrong, bureaucracy exists for reasons. Not always good reasons, not always current reasons, but reasons nonetheless. The medical receptionist with her scheduling power exists because doctors' time is genuinely scarce and valuable. The legal profession's complexity partly reflects the genuine complexity of law in a society with 330 million people trying to live together. Educational credentialism emerged because there needed to be some way to signal competence in a world where you couldn't test everyone directly.

And yet.

The same systems that once solved real coordination problems have metastasized into something else entirely. They've become ends in themselves, self-perpetuating structures that exist to justify their own existence. The bureaucracy isn't serving the original function anymore—it's serving the bureaucrats.

I think about this every time I encounter some kafkaesque process that seems designed to exhaust rather than assist. The insurance company that requires three different forms to approve a medication that costs twelve dollars. The university that demands transcripts be sent directly from previous institutions, even when I have the official documents in my hand. The permit office that's only open Tuesday through Thursday, from 10 AM to 2 PM, excluding holidays and the third Thursday of every month when they do "system maintenance."

These aren't features. They're bugs that have evolved into the defining characteristics of the system.

RIP to the middleman—

What we're now witnessing with AI feels like the natural conclusion of forces that have been building for decades. I've been thinking about this through the lens of what happened to travel agents, record stores, and taxi medallions. Markets have this beautiful, ruthless way of routing around inefficiency. When technology makes middlemen obsolete, they don't just fade away—they get obliterated.

But artificial intelligence feels different. Bigger. More foundational.

We're not just disrupting industries—we're disrupting the entire concept of scarce expertise. The artificial scarcity that has propped up countless professional monopolies is evaporating like morning dew in direct sunlight.

Consider law. For decades, legal knowledge was artificially constrained through guild-like credentialing systems that had more to do with supply management than quality assurance. Law schools as cartel enforcement mechanisms, bar exams as barriers to entry, billable hours as extraction mechanisms. Classic rent-seeking behavior dressed up as professional standards.

But what happens when anyone can analyze contracts, research case law, and draft legal documents with AI assistance? When the barrier between "licensed professional" and "competent practitioner" becomes permeable?

The market finds a way. It always does.

Here's where it gets interesting—where the abstract economic theory meets messy human reality. This isn't just about technological disruption. It's the purest expression of market forces I've seen in my lifetime.

In a truly competitive market, value flows to whoever can deliver the best results most efficiently. But most markets aren't truly competitive—they're rigged through licensing requirements, regulatory capture, and institutional gatekeeping that protects incumbents from having to compete on merit.

AI is making these markets competitive again. Brutally so.

I think about the solo practitioner who can now compete with white-shoe law firms because she has AI-assisted research capabilities. The independent consultant who can deliver McKinsey-quality analysis without the McKinsey overhead. The entrepreneur who can build, test, and iterate on ideas without needing to assemble a traditional team or secure institutional backing.

This is capitalism working the way it's supposed to work—rewards flowing to whoever creates the most value, regardless of their institutional credentials or social connections.

The Village Lawyer by Pieter Brueghel the Younger (1621)

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the beautiful brutality of creative destruction—

Creative destruction isn't a bug, it's a feature. The whole point is that inefficient systems get swept away by more efficient ones, that value flows to those who can deliver better outcomes, that innovation disrupts incumbency.

But we've spent decades building institutional moats around mediocrity. Professional licensing that protects incompetent practitioners from competition. Educational credentials that signal compliance rather than competence. Regulatory frameworks that benefit established players at the expense of innovative challengers.

AI doesn't care about any of that. It's pure market force, stripped of political consideration or social niceties. It rewards clarity, iteration, and results. Period.

This is making a lot of people very uncomfortable. Particularly people whose livelihoods depend on artificial scarcity.

The pushback is already starting, and it's following the same predictable pattern we've seen with every major technological disruption. Appeals to safety, calls for regulation, concerns about quality and oversight.

Some of this is legitimate. But much of it is thinly veiled protectionism—incumbents trying to use government power to maintain market positions they can no longer defend on merit.

We watched this play out with Uber and taxi medallions. The medallion system was pure rent-seeking—artificial constraints on supply that inflated prices and reduced service quality. When Uber offered consumers a better experience at lower cost, the taxi industry didn't respond by improving their service. They ran to regulators demanding protection from competition.

We're seeing the same dynamic with AI. Legal associations worried about unauthorized practice of law. Medical boards concerned about unlicensed diagnosis. Educational institutions fretting about credential erosion.

But markets have this wonderful way of ignoring such concerns when consumers find better alternatives.

Jean Miélot at his desk, 2nd half 15th century

what dies, what thrives—

The economic logic here is straightforward: anything that can be commoditized will be. Anything that relies on information asymmetry for its value proposition is vulnerable. Anything that exists primarily to manage scarcity rather than create abundance is doomed.

But—and this is crucial—this creates enormous opportunities for genuine value creation. The law firm that charges $400 an hour to review standard contracts is probably not long for this world. But the lawyer who can help you navigate a complex custody dispute, who understands the emotional and relational dynamics? That human expertise becomes more valuable, not less, when it's not competing with routine document review. The doctor who uses AI diagnostic tools to focus on patient care and complex decision-making provides irreplaceable value.

The teacher who leverages AI to personalize learning, inspire curiosity, guide difficult conversations, and help students develop critical thinking and creativity—irreplaceable. The educational bureaucracy that treats learning like an assembly line and knowledge like a commodity to be dispensed in standardized units? Not so much.

The market rewards adaptation. It always has.

builders vs. blockers—

This transformation reveals something fundamental about how people respond to change. Every organization I've worked with has two types of people: the builders and the blockers. The builders are the ones who say "yes, and..." when you bring them a new idea. They're more interested in what could work than in what might go wrong. They see AI as a tool for amplification, a way to do more of what they're already good at.

The blockers say "we need to be careful" and "that's not how we do things here" and "what about compliance?" They see AI as a threat to the systems they've mastered, the authority they've accumulated, the relevance they've spent years establishing.

I don't think this is necessarily about character or values. It's about what you have to lose.

If your power comes from controlling access to information, AI is terrifying. If your value comes from your ability to navigate bureaucratic systems, AI is an existential threat. If your expertise is primarily about knowing which forms to fill out and which departments to call, you're watching your entire professional identity evaporate.

But if your strength is in synthesis, creativity, or solving novel problems—if you're energized by building rather than gatekeeping—this moment feels like liberation.

The Allegory of Good and Bad Government by Ambrogio Lorenzetti (1338)

the market is speaking—

Strip away the political rhetoric around "meritocracy," and what you're left with is a simple proposition: results matter more than credentials. This isn't about creating some perfect system where everyone gets exactly what they deserve based on abstract merit. It's about creating conditions where value creation gets rewarded and rent-seeking gets punished.

The variable is no longer access. It's agency.

When intelligence becomes abundant and accessible, the competitive advantage shifts to execution, creativity, and judgment. When barriers to entry collapse, value flows to whoever can deliver the best results most efficiently. When artificial scarcity disappears, natural scarcity—genuine talent, insight, and drive—becomes more valuable.

AI is moving us toward that world whether we're ready or not. The question isn't whether this is fair—markets aren't concerned with fairness in the abstract sense. The question is whether it produces better outcomes for consumers and society.

I think it does. A world where anyone can access world-class expertise, where individuals can compete on results rather than institutional backing, where innovation happens faster because it doesn't need to navigate bureaucratic approval processes—I think that world is more prosperous, more dynamic, and more just than what we have now.

But sitting in that waiting room last Tuesday, watching my life drain away in fifteen-minute increments while someone with power over my calendar exercised it arbitrarily, calculating the waste, feeling the friction of systems designed to extract rather than create value—I couldn't help thinking that a little creative destruction might be exactly what we need.

The market is speaking. Are you listening??

XO, STEPF

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1. Name changed for privacy. Dr HooHa would make a great gyno though.

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