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Dogma Premise # 23

 Government is intrinsically wasteful (except for universities, the military, NASA, darpa, public utilities, bridges, roads, airports, police, prisons, parks, fire protection, the National Weather Service, hospitals, the Coast Guard, the National Guard, and libraries).

Dogma Premise #23 is the fraternal twin of Dogma Premise #22.  Whereas Dogma Premise #22 objects to government action as morally bad, Dogma Premise #23 declares government action economically bad.

Government is inefficient because there is no profit motive, and as a result no one in government really cares whether a job is done well or on time, because they get paid the same either way -- or so the story goes.

In theory, this is difficult to understand.  The cost of any government project should actually be lower, because there are no profits to built into every transaction.  Indeed, the cost of capital should be lower, too, because the government can issue bonds at a lower interest rate than would have to be paid by most private entities attempting to fund a project.  So when it comes to efficiency, government projects actually start with two significant advantages.

But it’s all squandered, and then some, inevitably, say the Capitalists, because no one in government cares enough to make sure the job gets done well, because the project doesn’t lead to riches for anybody in government.

In theory, this makes no sense at all.  Every government run project has a person in charge, and that person is specifically accountable.  If it goes badly, they could lose their reputation, their job, their livelihood, and the prospects of future projects.  If an elected official is identified with the project, then their political prospects could be severely damaged (to say that politicians do not care as much about their political careers as capitalists care about money is not plausible).  A successful project might lead to lucrative consulting projects, promotions, raises, books, speaking tours, additional opportunities in private enterprises -- all the same incentives that motivate similarly situated actors in private enterprises.

There is hardly any difference.  It all seems to come down to whether the prospect of profits are such a unique motivator that the rest -- reputation, career, responsibility -- all fade.  This is especially unlikely given the fact that those drawn to government service are there knowing that it is not a place where you can easily get rich.  It would seem that those most motivated by the prospect of wealth would have self-selected into private enterprises, and those motivated by civic or other virtues would have elected to work in government -- so why would there overall motivation levels be so very different?

Certainly government workers who tend to smaller tasks may not get any personal taste of glory from the project’s success, but that is exactly the same position of the workers in a private enterprise who are motivated by methods other than profit-sharing.  If anything, government workers would be MORE motivated than their private counterparts, because they can truthfully say that the final result of their efforts is to serve their city, state, or country, rather than to enrich private investors.  For some people, that counts.

There is nothing intrinsic to the structure or operation of government that should make it less efficient than private enterprise -- indeed, spared the costs of profits, expensive sources of funding, and the exhorbitant executive salaries and management perqs that have become the norm in private enterprise, government should win the efficiency race every time.  At least in theory.

In practice, we see exactly this.  Claims of waste and fraud are not rampant or well-documented in any of dozens of spheres normally run by government -- including parks, libraries, fire protection, law enforcement, public health, and weather forecasting.

If anything, the government providers are consistently better than their private counterparts.  Government’s cost of labor is universally lower, and accordingly they do similar jobs as well and at a lower cost than their private counterparts.

Obvious examples would be the US Postal Service vs. UPS or FedEx.  All three services are breathtakingly reliable, comparably priced, and deliver a range of products and services typical of any oligopolistic market.

By contrast, privatization of government functions routinely leads to higher prices, big profits, and exploding costs, as has been seen in many countries and many industries.  Much of the increased cost is hidden in lucrative government or military contracts, but to the extent that these contracts represent “government waste,” it is because the job has been outsourced irresponsibly, and the solution is more government, not less.  It is certainly not the case that government procurement officers are stupider or lazier than procurement officers in private enterprises.  If the award process is corrupted, either by rigged bidding or political favoritism, it is the profit motive animating the private firms that inspired and executed the heist, not any design of the civil servants, which again points to private profits as the problem, not the solution.

Government activity is considered completely and consistently efficient and effective in the areas where it is allowed to function -- for example, the Centers for Disease Control, NASA, street cleaning, snow plowing, municipal water and trash service.  The suggestion that government is suddenly wasteful and inefficient when performing functions that private enterprise would like to use as vehicles for wealth accumulation, such as prisons, shows not only that there is no real theory of government inefficiency at work, but that the real goal is to introduce inefficiency into the system -- in the form of unnecessary charges for profit, capital, and executive compensation -- to deliver the same services for more, not for less.

The best argument that can be mounted for the inefficiency of government action is the fact that government jobs are usually inferior to their analogous private sector jobs in compensation, working conditions, and tools, which creates a general incentive for the more talented individuals to favor a private sector appointment.

However, this effect is not intrinsic to government, but results from inadequate funding. The capitalists lose this argument either way: if the lower government salaries are proper, then government is more efficient and the private sector is wasteful. If the lower government salaries are causing a brain drain, then government efficiency can be regained through INCREASED taxation and government spending, and the elimination of the market distortion resulting from Capitalist anti-government policies.

Dogma Premise 24

All Dogma Premises

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