Nowadays, no one talks much about bureaucracy. But in the middle of the last century, particularly in the late 1960s and early 1970s, the word was everywhere. Everyone seemed to feel that the foibles and absurdities of bureaucratic life and bureaucratic procedures were one of the defining features of modern existence and, as such, eminently worth discussing. But since the '70s, there has been a peculiar falling off.

Why? Well, one obvious reason is that we've just become accustomed to it. Bureaucracy has become the water in which we swim. We no longer like to think about bureaucracy, yet it informs every aspect of our existence.

A few weeks ago, I spent several hours on the phone with Bank of America, trying to work out how to get access to my account information from overseas. This involved speaking to four different representatives, two referrals to non-existent numbers, three long explanations of complicated and apparently arbitrary rules, and two failed attempts to change outdated address and phone number information lodged on various computer systems. In other words, it was the very definition of a bureaucratic run-around. (Neither was I able, when it was all over, to actually access my account.)

Now, there is not the slightest doubt in my mind that, were I to actually locate a bank manager and demand to know how such things could happen, he or she would immediately insist that the bank was not to blame – that it was all an effect of an arcane maze of government regulations. However, I am equally confident that, were it possible to investigate how these regulations came about, one would find that they were composed jointly by aides to legislators on some banking committee and lobbyists and lawyers employed by the banks themselves, in a process greased by generous contributions to the coffers of those same legislators' re-election campaigns. And the same would be true of anything from credit ratings, insurance premiums, mortgage applications to, for that matter, the process of buying an airline ticket, applying for a scuba license or trying to requisition an ergonomic chair for one's office in an ostensibly private university. The vast majority of the paperwork we do exists in just this sort of in-between zone – ostensibly private, but in fact entirely shaped by a government that provides the legal framework, underpins the rules with its courts and all of the elaborate mechanisms of enforcement that come with them, but – crucially – works closely with the private concerns to ensure that the results will guarantee a certain rate of private profit.

In cases like this, the language we employ – derived as it is from the right-wing critique – is completely inadequate. It tells us nothing about what is actually going on.

Consider the word "deregulation". In today's political discourse, "deregulation" is – like "reform" – almost invariably treated as a good thing. Deregulation means less bureaucratic meddling, and fewer rules and regulations stifling innovation and commerce. This usage puts those on the left-hand side of the political spectrum in an awkward position, since opposing deregulation – even pointing out that it was an orgy of this very "deregulation" that led to the banking crisis of 2008 – seems to imply a desire for more rules and regulations, and therefore more grey men in suits standing in the way of freedom and innovation and generally telling people what to do.

But this debate is based on false premises. Let's go back to banks. There's no such thing as an "unregulated" bank. Nor could there be. Banks are institutions to which the government has granted the power to create money – or, to be slightly more technical about it, the right to issue IOUs that the government will recognise as legal tender and, therefore, accept in payment of taxes and to discharge other debts within its own national territory. Obviously, no government is about to grant anyone – least of all a profit-seeking firm – the power to create as much money as they like under any circumstances. That would be insane. The power to create money is one that, by definition, governments can only grant under carefully circumscribed (read: regulated) conditions. And indeed this is what we always find: government regulates everything from a bank's reserve requirements to its hours of operation; how much it can charge in interest, fees, and penalties; what sort of security precautions it can or must employ; how its records must be kept and reported; how and when it must inform its clients of their rights and responsibilities; and pretty much everything else.

So what are people actually referring to when they talk about "deregulation"? In ordinary usage, the word seems to mean "changing the regulatory structure in a way that I like". In practice, this can refer to almost anything. In the case of airlines or telecommunications in the '70s and '80s, it meant changing the system of regulation from one that encouraged a few large firms to one that fostered carefully supervised competition between mid-size firms. In the case of banking, "deregulation" has usually meant exactly the opposite: moving away from a situation of managed competition between mid-sized firms to one where a handful of financial conglomerates are allowed to completely dominate the market. This is what makes the term so handy. Simply by labelling a new regulatory measure "deregulation", you can frame it in the public mind as a way to reduce bureaucracy and set individual initiative free, even if the result is a fivefold increase in the actual number of forms to be filled in, reports to be filed, rules and regulations for lawyers to interpret, and officious people in offices whose entire job seems to be to provide convoluted explanations for why you're not allowed to do things.

This process – the gradual fusion of public and private power into a single entity, rife with rules and regulations whose ultimate purpose is to extract wealth in the form of profits – does not yet have a name. That in itself is significant. These things can happen largely because we lack a way to talk about them. But one can see its effects in every aspect of our lives. It fills our days with paperwork. Application forms get longer and more elaborate. Ordinary documents like bills or tickets or memberships in sports or book clubs come to be buttressed by pages of legalistic fine print.

I'm going to make up a name. I'm going to call this the age of "total bureaucratisation". (I was tempted to call this the age of "predatory bureaucratisation" but it's really the all-encompassing nature of the beast I want to highlight here.) It had its first stirrings, one might say, just at the point where public discussion of bureaucracy began to fall off in the late '70s, and it began to get seriously under way in the '80s. But it truly took off in the '90s.

What began to happen in the '70s, and paved the way for what we see today, was a kind of strategic pivot of the upper echelons of the United States' corporate bureaucracy – away from the workers and towards shareholders, and eventually towards the financial structure as a whole. The mergers and acquisitions, corporate raiding, junk bonds and asset stripping that began under Ronald Reagan and Margaret Thatcher and culminated in the rise of private equity firms were merely some of the more dramatic early mechanisms through which this shift of allegiance worked itself out. In fact, there was a double movement: corporate management became more financialised but, at the same time, the financial sector became corporatised, with investment banks, hedge funds and the like largely replacing individual investors. As a result, the investor class and the executive class became almost indistinguishable. (Think here of the term "financial management", which came to refer simultaneously to how the highest ranks of the corporate bureaucracy ran their firms and how investors managed their portfolios.) Before long, heroic chief executies were being lionised in the media, their success largely measured by the number of employees they could fire. By the '90s, lifetime employment, even for white-collar workers, had become a thing of the past. When corporations wished to win loyalty, they increasingly did it by paying their employees in stock options.

At the same time, the new credo was that everyone should look at the world through the eyes of an investor – that's why, in the '80s, newspapers began firing their labour reporters, but ordinary TV news reports came to be accompanied by crawls at the bottom of the screen displaying the latest stock quotes. The common cant was that through participation in personal retirement funds and investment funds of one sort or another, everyone would come to own a piece of capitalism. In reality, the magic circle was only really widened to include the higher-paid professionals and the corporate bureaucrats themselves.

Still, that extension was extremely important. No political revolution can succeed without allies, and bringing along a certain portion of the middle class – and, even more crucially, convincing the bulk of the middle classes that they had some kind of stake in finance-driven capitalism – was critical. Ultimately, the more liberal members of this professional-managerial elite became the social base for what came to pass as "left-wing" political parties, as actual working-class organisations like trade unions were cast into the wilderness. (Hence, the US Democratic Party, or Britain's New Labour, whose leaders engage in regular ritual acts of public abjuration of the very unions that have historically formed their strongest base of support.) These were, of course, people who already tended to work in thoroughly bureaucratised environments, whether schools, hospitals or corporate law firms. The actual working class, who bore a traditional loathing for such characters, either dropped out of politics entirely or were increasingly reduced to casting protest votes for the radical right.

This was not just a political realignment. It was a cultural transformation. And it set the stage for the process whereby the bureaucratic techniques (performance reviews, focus groups, time-allocation surveys ...) developed in financial and corporate circles came to invade the rest of society – education, science, government – and, eventually, to pervade almost every aspect of everyday life.

We are all faced with a problem. Bureaucratic practices, habits and sensibilities engulf us. Our lives have come to be organised around the filling out of forms. Yet the language we have to talk about these things is not just woefully inadequate – it might as well have been designed to make the problem worse. We need to find a way to talk about what it is we actually object to in this process, to speak honestly about the violence it entails, but, at the same time, to understand what is appealing about it, what sustains it, which elements carry within them some potential for redemption in a truly free society, which are best considered the inevitable price to pay for living in any complex society, which can and should be entirely eliminated entirely.

Professor David Graeber teaches anthropology at the London School of Economics and is a widely published commentator in Britain and the US. This article is an excerpt from his latest book, The Utopia of Rules: On Technology, Stupidity and the Secret Joys of Bureaucracy, published by Melville House.