-
Paying taxes to provide for police, FBI, etc. to defend citizens’ basic rights is something that even the hardest of hard-core free marketeers would ever argue about.
-
Ditto, although there are many places in America where fire protection is impossible due to distances travelled or too small of a tax base. When this is the case, homeowners build at their own risk, or join volunteer fire departments.
-
Highways are built and maintained by the inefficient, corrupt federal government. Why do you take their efficiency at building roads at face value? How do you know they are efficient? Do you have a choice to compare them against? Why not put the construction of highways out to private management and get a feel for that?
-
NASA sucks at what they do. They run up a bill, that they charge to you and me, for about $15 billion per year. That’s $100 billion over the past 7 years. What have we received for our money?
-
The Navy Seals form a legitimate government purpose, which is providing for the common defense.
That’s well put.
Efficiency vs. Effectiveness is an interesting discussion. But I think it misses the point. I think what you might be searching for here is value, defined as
Value = Benefits received - price paid
With ‘Benefits received’ being defined solely in the mind of the consumer, the one making the purchase decision.
A particular manufacturer might be inefficient relative to its competitors, and may need to spend a bit more to make widget X. But if it is marketed better, has slightly different features, and is more closely aligned to what the consumer wants, he may be able to charge a higher price for it and make more money. Even if he is more inefficient in some technical sense.
Medicare cost comparison studies often miss this point. Some of the ones I’ve seen claim that Medicare delivers X at the same, or better price than the private market. Therefore, Medicare is equally/more efficient.
I doubt it. There are a billion other variables that could come into play affecting the consumer decision. Maybe the doctors taking Medicare patients suck, or are unpleasant to work with, or are in incovenient locations. Maybe the consumers who pay more are willing to do so, because they go to better doctors in nicer offices. Maybe that particular treatment wasn’t what the patient needed in the first place but Medicare doesn’t cover what the patient wants. Geriatric medicine, in particular, is waking up to this fact. Maybe there haven’t been proper adjustments for cost of living differentials. Who knows?
The point is, value is in the mind of the consumer. It’s defined by the one with the money, creating demand-pull for the service. Not by the one bearing the cost, supply-pushing the service. If Medicare is truly efficient at delivering service X, just give the patient the money and see if they spend it on service X. If you are truly competitive, you have nothing to worry about.
In competitive markets, there will always be pressure on a business to provide consumers more value. That is, a product that best matches their desires at the lowest cost. Otherwise, the consumers will go elsewhere.
What possible equivalent exists for a government entity?
So you trust the government to provide the most important, difficult, and dangerous services, yet simultaneously maintain that they are inefficient and corrupt?
I have to. It’s part of being a citizen. It’s enshrined in our Constitution. And they are the only services that citizens of a sovereign state require of their government, by tautalogical definition. We aren’t citizens of a country unless that country defends its borders, are we?
Oh and by the way, the government is horribly inefficient and corrupt just in the act of providing those services. Dept of Defense procurement processes are a running joke w.r.t. their inefficiency and corruption ($1000 toilet seats, recent Air Force procurement scandals where people went to jail).
I’ve actually done some consulting work for military procurement operations and seen inefficiencies that would make your hair stand on end. Such as warehouses full of unused furniture next to military bases, because somewhere in the past someone ordered 1000 desks a year, back when that many may have needed to be ordered in one year, but not every year, and by the way there aren’t even that many offices on base any more due to downsizing, but nobody ever told the guy ordering desks that fact, or even told him he didn’t need to order 1000 desks every year. Just the first year. So now there is several million dollars worth of useless furniture that will have to be unloaded at pennies on the dollar, to the detriment of the taxpayer.
Do you think a private company in a competitive industry would last 30 days with procurement practices like that? Good God, no.
So yes, even the most basic government functions are horribly inefficient and corrupt. It’s a price we have to pay, I guess. But if operational efficiencies of the military and courts is all Congress and the taxpayer would have to focus their attention on, we could probably make a dent in that too. Seems like our focus is always on adding more, though.
And I guess I don’t understand your point. Was it that if I accept this suboptimal state in the military and courts, I should accept it for everything else (highways, the FDA, CPSC, ATF, Dept of Energy)? Is that your point? Sort of a 5,000 wrongs-make-a-right?
I am suprised if office desk procurements are classified, and since you did consulting work for some specific such operation, I imagine you can provide us with some information as to the location of the warehouse and perhaps a lead or two as to what public records are available that reflect this procurement.
-FrL-
Private sector toll collection is fine, but construction? No way. Should we allow multiple companies to plan and build multiple roads? Of course not. We only need one road along any given route. As it stands, the government uses plenty of private subcontractors in road construction. They outline the specifications and take the lowest bid.
You make it sound like government sets prices for health insurance companies. This isn’t true - it enforces certain restrictions on pricing to ensure fairness and to ensure that people who get sick don’t have their premiums skyrocket, or lose coverage. (Which is clearly the optimal strategy for the insurer, if not for society.)
Here is a study from Georgetown University on state regulation (warning, pdf.)
The issue with Medicare is that government doesn’t want to pay the increasing costs from our free enterprise healthcare system. They use their power to force doctors to accept their payment schedule. There are too options - either we can dump our elderly into the private system, where their costs would increase tremendously, and lots would have to go without coverage, or we can reform the entire system to decrease costs to the levels we see overseas.
Deregulation would get us into a bigger mess than the banking system. (See McCain’s oopsy on how deregulating healthcare would make it run as well as our banks.) If you look at the report, you can see good reasons for all the regulations. For instance, regulators require companies to have reserves. Are you in favor of dropping this? Do you deny that companies would spring up, collect premiums, and quickly go under? The companies would die, but their management would do very well.
Insurance is all about spreading risk. An insurance company can do well by dropping those who get the most in benefits. Now, when greater health costs come from voluntary actions (like smoking) I’m all for raising premuims. That’s like car insurance. But not all illnesses can be prevented or reduced by good health practices, and I for one consider it evil to allow companies to profit by increasing the suffering of its customers.
Why?
To further support this, a friend of mine was State Treasure for a large Northeastern State - he reported directly to the governor, and was on TV a lot. He didn’t make a lot more than I did as a first level manager. When he went into the private sector, his salary doubled.
I think the reason for low salaries is that Joe the Ditchdigger doesn’t really believe that a high level government official, with a budget of hundreds of millions or billions of dollars, is any more skilled than he is, and resents the “big” salaries.
I’m really interested in pursuing that story.
-FrL-
That’s not much different than where I work in a major insurance company. I get paid a six figure salary to basically do jack shit all day. The current system is basically set up to prevent me from doing anything other than jack shit. And this is AFTER we just had a major restructuring.
When any organization gets to a certain size in a mature industry, lack of competition can render it as inefficient as any goverment agency.
Efficiency isn’t always desirable. When I used to work in consulting, those companies can be ruthlessly efficient. If you don’t bill a certain number of hours to a client, you can find yourself out of a job very quickly.
Also, efficient doesn’t necessarily mean everyone’s needs are met. Take schools for example. The public school system sucks, but everyone gets a basic education. Private schools provide a better education, but they aren’t available to everyone.