Problem #1 with deciding that the government is more or less ‘efficient’ than the private sector: The private sector has a very easy measure of ‘efficient’ - the ol’ bottom line. With the gummint, there is no single, no simple measure of ‘efficient’, nor any indisputable definition of ‘success’ for any given program.
So, you just can’t compare the success of government to that of private enterprise. They have different goals. It’d be like saying that soccer is worse than basketball because the scores are so much less. (But I doubt that’s one of the best analogies I’ve ever come up with…)
Cite? Compare the cost of a government service with that of a similar private service. Say the post office compared to UPS or FedEx. Post office is much less expensive, and not as fast. The government occasionally lends money to the USPS, but the USPS is not subsidized.
I’m not saying that public is better than private. For any particular industry it may or may not be. I am saying that the knee jerk response that private is always better is not true. Private does have the advantage of the public not paying directly for it.
Sorry, I can’t get through this thread without a having a couple of scenes flashing before my eyes.
scene # 1: The DMV
scene # 2: Service counter at the Post Office
IMHO, you can banter about efficiency/inefficiency all you want but once you cross this line in lack of interest in providing customer service, it just doesn’t matter anymore. In saying this I realize there are the odd examples of the above that run like a clock but they are by far the exception rather than the rule.
One thing to remember about efficiency is that a side-effect of efficiency is that some people do not have access to your services.
This is why we have government schools, fire protection, police, etc. We have decided that the results of not having free access to these things would be disastrous.
Another is that the private sector simply can’t handle some things. Once someone gets sick, they will pay pretty much anything they have no to die. So it health care doesn’t really respond to market forces in the same way that other things do. And indeed I’d say the private sector may be more given to inefficiency in this case.
The thing about customer service is that it isn’t free. The costs of better service get passed onto the consumer. From my perspective, I don’t deal with the DMV or the post office very often, so as a consumer I’m willing to forgo some service for lower costs. In that respect, they ARE efficient.
First, gonzomax’s point of Social Security. I would argue that his/her point is essentially correct. Social Security is basically a simple redistributive scheme of taking money from one group and giving it to another, without a whole lot of complicated means-testing or management process to gum up the middle.
That is the one thing government can do reasonably well, and do it better than any private entity…forcibly move massive amounts of money around in a non-voluntary fashion. And yes, it does it with reasonably low overhead. Let’s consider that a competitive advantage for the moment. In fact, we could argue that is all the government should do, and work backwards from there when we discuss it’s role in other situations. More on that in a moment.
Let’s touch on health care. Yes, health care companies may offer the lowest coverage they can, with the highest premiums they can charge. What’s to stop them? A competitive market. If the market is restricted to a small number of government-licensed players, who are regulated to high heaven, and who are told exactly what type of coverage they must provide and for what price, you won’t help matters at all. You’ll discourage new entrants from competing away those profits and create all sorts of distortions for existing entrants. You’ll destroy the supply side of the equation by reducing available doctor-hours, as is happening today in family practice in the States and with more doctors refusing Medicare patients (government-run health care) because they can’t make the numbers pencil out, or would like to offer alternative - even cheaper - treatments, that Medicare doesn’t cover for whatever reason.
The patient has no choice. The doctor has no choice, except to remove him/herself from the scene and apply their skills in a different environment. The government calls the shots. Oh, and it’s budget is exploding in runaway fashion. Whoops. A private entity would go bankrupt if it performed like that. The government just asks for more money.
And I don’t buy the argument that government has to get involved because when people get sick they have no choices and can’t shop around. You can plan ahead. You can manage your personal risk factors. And in a better America, you could buy insurance in a much-less regulated market with much more choice, and with subsidized premiums supplied by the government if you qualify as the working poor. Because government can efficiently transfer money to you better than anybody else. But they should stop there. Because they sure can’t run a health-care system.
How could they possibly run anything else more efficiently than the market? Almost by tautalogical definition, it cannot be true. Companies in free markets have incentives to get better. They have incentives to sell more products to more customers. If they do so, they make more money for themselves. But if they make too much money and become too successful they will draw in competitors who want some of that pie, too. Customers ultimately benefit.
If a company sucks at what they do, customers take their business elsewhere and the company goes bankrupt.
What possible equivalent exists for a government function? For the FDA, the DMV, the Post Office, Amtrak, NASA, the ATF, the Department of Education, the EEOC, the various regulatory bodies, Social Security, the Consumer Products Safety Commission, the Farm Bureau, the Transportation Dept, the folks who divvy up mohair subsidies, and everything else?
All of those agencies are taking your money. Supposedly they are providing something in return. How do you know they are doing a good job? A bad job? If they spend too much money? Not enough money?
What incentives do they have to do better? What accountability do they have if they don’t perform well?
How do you know if they are accomplishing anything positive or worthwhile at all? Do you have any control as a consumer over their output? Are they ever at risk of going out of business altogether, even though some of them deliver practically nothing of value to the taxpayer?
The Department of Education formally came into being during the Carter administration, about 30 years ago. Since then it has spent several hundred billion dollars. What have you, as a taxpayer, gotten for your money? Anything? Has the needle on the quality of American education moved at all in the last 30 years due to the hundreds of billions of dollars the federal government has pissed away in the Department of Education?
Of course not. And there is no accountability for their performance, or the performance of any other government agency, other than the extremely tenuous connection between an elected representative in the House, Senate or the President and the day-to-day management of the agency. Good luck trying to effect positive change on one of those agencies via that electoral mechanism.
Nobody is going to run on the platform of ‘I think the FDA spends too much money and doesn’t really accomplish a whole lot, therefore elect me, and I will abolish it. Or at I’ll least reshuffle management a bit and cut it’s budget to make it lean and more competitive’. Why would anybody run on an electoral platform like that? It’s much easier to add something, like a new agency, or ask for more funding, to address some perceived ill and satisfy the public’s hunger to ‘do something’. Only when there is some godawful, catastrophic scandal in a federal agency is anybody ever moved to do anything.
And why would an already-elected official ever stick their neck out to do the above? There’s very little upside, and a lot of downside. It’s easier to just forget about improved oversight of government run agencies, trade a favor or two with a Congressperson across the aisle to get your new pet project through, and spend more of the taxpayers money along the way.
I just shake my head in disbelief when I hear people say things like highways and bridges are too important, and can’t be left to the private sector. Or the Post Office. Or Amtrak.
Really? How do you know? Do you think you’re getting good value for money now? In the case of transportation, safe highways and bridges at a reasonable cost? How do you know? How do you know that government contracts aren’t pork-laden wasteful bridges to nowhere, built to shoddy standards, at inflated prices with workrules that invariably tilt towards hiring expensive union labor when there are other alternatives available? How do you know the private alternative isn’t much cheaper and of higher quality?
Why don’t you trust private firms, who must deliver something of value to you (the customer) to survive, but you trust government employees who are accountable to no one? That makes absolutely no sense to me.
If you want to help the poor, you should use the apparatus of the federal government to give them money. Just like gonzomax said. Because that’s the one thing that government can do fairly well, and fairly efficiently. Give them money in response to some incentive like work and also perhaps incentives like staying out of trouble.
And that’s about it. Give them money and let them spend it as best as they see fit - on education for their kids if they have them, on health insurance if that’s a concern, or on housing if they need that. That’s an extremely efficient and empowering way to help the poor. Perhaps toss in vouchers for each separate area if you are uncomfortable with the notion of giving them unconditional dollars that could be spent on a crack habit or hookers. But for God’s Sake, keep the federal government out of managing anything. There is no reason for it. They have no incentive to do it well, and there is no accountability if they screw it up.
I do all my DMV business either over the internet, or by appointment. The appointments are kept within 5 minutes, better than a private doctor’s office.
Why on earth do you go into the post office? You can go to a UPS Store or Postal Annex and pay a small premium (still cheaper than UPS or Fed Ex) and not wait. Yours are bogus arguments from people who just plug their ears and don’t want to hear. You want to pay 5 to 10 times as much for the better decor, then go ahead.
Good for your DMV working on an appointment schedule - too bad that’s not the norm.
As for on-line options, sadly there are still some function where you must physically go and be there, pull the next number and wait…and wait…and wait some more.
The on-line option will also not work very well when you need to seek medical attention. Oh sure, I suppose we’ll be able to pay for premium/no wait service (kind of like your UPS Store example) but, hey wait a minute, wouldn’t that be equivalent to what I already have? Let’s see, I’ll still be able to pay extra for the same service I receive today PLUS be taxed out the *** to pay for those that want the free ride. Sounds like a fine deal to me :rolleyes:
At some point, it becomes a question of cost vs. access. If these services were left to the private sector, would access to them be the same as it is now? My guess would be that it would be much more limited. That’s what we’re seeing now with the US healthcare system–not everyone can get the service they need to stay healthy Some things are too important to let the private sector determine how much access people have to them, and many of us put health care in that category.
Seriously? In my state, state employee salaries are notoriously low as compared to the private sector. I have consulted for my state government and have found that even the highest ranking executives make far less than their private sector peers.
Once again, a nice stereotype, but not typical of the agencies that I have worked for. Do tell of your experiences…
“Efficient” might be the wrong thing to ask about. Government is often effective at doing things the private sector won’t do at all because they’re not immediately profitable, but which arguably need doing for other reasons.
Even totalitarian socialism, or state capitalism if you prefer, can be effective for limited purposes, such as heavy capital formation. Stalin took a backward, agrarian country, marginally industrialized by the onset of WWI and that little industry devastated by that war and the Russian Civil War, and turned it into an industrial power capable of going head-to-head with Hitler’s Germany – and Germany had always been at the leading edge of the Industrial Revolution. No way could that have happened, if Russia had had a free-market system during that period. OTOH, central economic planning, lacking the constant corrective feedback of competitive market performance, is spectacularly inept at any kind of fine-tuning, and does not encourage innovation very well.
Comparing postal service to medical service is a flawed comparison on its face. You really ought to see how it works in countries that have it rather than simply believe the anecdotes you find most pleasing because you imagine your fantasies to be true. Oh, I forgot, having 46.6 million people without health care is fine with you. http://www.cbpp.org/8-29-06health.htm
Many people with health insurance cannot get insurers to pay for required life saving surgery. I’m currently of them. You don’t want to have any deadly disease with private health insurance, trust me. They will delay your getting treatment in the hopes you die first. Your death saves them hundreds of thousands of dollars.
Frankly, I’d rather have a priority system such as Canada or any European country.
But also keep in mind that being “private sector” doesn’t automagically make a group of people efficient.
I’ve never worked for the government; I’ve had several governments work for me, though. I’ve seen branches of government that were efficient and others that were bad; I’ve seen good ones go bad and bad ones get fixed. And I’ve worked in private companies of different sizes who were efficient, inefficient, responsible, lawbreaking… I’m sure any of us can think for a minute and come up with a few examples of private companies which are more slow-moving than techtonic plaques. A company can be good as seen by the customers and still be throwing away money, time and material resources by the truckful: Too Much Money Syndrome is well known to consultants.
Making iPods or shoes is generally not “government’s job,” but one of the ways in which some governments help entrepreneurship is by becoming the “almost-silent financial partner” to people who have the ideas but not the money (the Navarrese government does this, it owns a % of the company which gets lower every year until it’s zero). Those governments end up having interests, for a limited number of years, in all kind of industries - not because they’re interested in making better shoes, but because they’re interested in helping the economy grow and providing financing to entrepreneurs helps the economy.
It’s not “faith”; it’s a reasonable expectation given the facts at hand. Judging from other countries, the government DOES tend to do a better job when it comes to health care. The faith involved here is the faith of the people who are absolutely sure that government is always bad and the private sector always superior. Regardless of evidence to the contrary.
Ah, that’s particularly a matter of your valueation of certain aspects of health care. If you simply ignore everything governments around the world do badly, or choose the absolute worst-served areas (or whatever personal troubles you have) as a standard, then you can always find justification for your views. But that is not the same thing as as actual evidence or justification.
Lifespan and how healthy people are in general come to mind. These days the Europeans have even passed us in height, thanks to better nutrition and health. And you don’t see people in places like Canada losing their homes thanks to gigantic medical bills.
American health care does excel in care for rich people, and economically crushing the common people, which I suspect are the “certain aspects” that you approve of but are unwilling to specify.
I leave for three days and the thread gets moved to Great Debates, which is exactly what I didn’t want. But upon reading the answers, I can see why. As much as I was hoping for some nice neat statistically sound studies comparing analogous government and private sector industries, the issue is just not that simple.
It seems to me that it basically boils down to evidence that the two aren’t really comparable in the first place. Differences in size, in goals and standards for success (the “bottomline” versus providing for all), what drives profit, and who foots the bill (shareholders versus taxpayers) are all uncontrolled variables. But is there a way of controlling for any of these? Are there really no private companies comparable in size to (not the entire government, but) specific gov’t departments? And is it really outside of the realm of possibility that a federal, state, or municipal organization might actually turn a profit that could be funneled into a surplus fund? Or should profit be a consideration at all for the public sector?
I’d also like to note that many people draw a distinction between “efficient” and “effective”. I’ve always taken effectiveness to be an essential part of efficiency; that is, efficiency = best effectiveness at lowest cost. Are you all taking effectiveness to mean “best effectiveness, period”, or something else?
Competition breeds excellence. Apple makes the best MP3 player because otherwise someone else will.
Paraphrased from this week’s Economist magazine, “Great games are made with great rules, not great players”. Competition ultimately needs to be directed in the way that is socially desirable.
If someone’s breaking into your house, would you rather deal with 911 or a Dell customer service rep? If your house is on fire, who will provide highly trained professionals on the scene protecting your property at great personal risk almost immediately? Who builds and maintains hundreds of thousands of miles of highway across the country with very little downtime? If you really need something to ‘run like a clock’ would you bet on your cable company or the Navy Seals? Are the CIA and NASA good at what they do?
It seems to me that the public sector is pretty damn good at a fair number of things, and the perception of government employees as unmotivated and incompetent is about as far from the truth as it could be. I wonder who stands to benefit from such a fiction?