Gammon's Law

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Gammon's Law is what Milton Friedman has named the "Theory of Bureaucratic Displacement" developed by Dr Max Gammon after studying the British National Health Service. In his words, in "a bureaucratic system … increase in expenditure will be matched by fall in production …." Such systems will act rather like 'black holes' in the economic universe, simultaneously sucking in resources, and shrinking in terms of 'emitted' production.

As Friedman put it: "I have long been impressed by the operation of Gammon's law in the U.S. schooling system: Input, however measured, has been going up for decades, and output, whether measured by number of students, number of schools, or even more clearly, quality, has been going down."[1]


  1. Milton Friedman. "Gammon's Law Points to Health-Care Solution", The Wall Street Journal, 11/12/1991. Friedman refers to the out-of-print 1976 book "Health and security: Report on the public provision for medical care in Great Britain" of Max Gammon. Referenced 2010-07-04.