In this age of distrust, there’s a strong feeling that businesses are out of control and should be shackled. That’s understandable, given how investment banks and car manufacturers and insurance conglomerates tanked in 2008 and nearly pulled the economy down with them, only to be rescued by the Feds with our money.
What’s more, there’s a lot of talk about America becoming more of a Socialist nation, with more and more of our economic lives run by central government. It’s as if Big Biz failed a test in 2008 and must now give way to Big Fed.
How effective would such a takeover of the economy be? Let’s look at government performance vs. business performance on several criteria and see how they compare:
Institutional goals increase control increase profits
Worker goals job security promotion
Response to failures blame problem fix product
Response to competition angry attacks friendly persuasion
Popular product leads to budget reduced * budget increased
Unpopular product leads to budget increased * budget reduced
Cost over time rises drops
Quality over time drops rises
Good workers promoted slowly quickly
Bad workers removed rarely quickly
Orientation to consumer impatient cheerful
Quality of product low high
Quality of service low high
Alternatives to consumer few many
Cost (to taxpayer/consumer) high low
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* If your government bureau does a good job, during budget talks they’ll assume you can get by with less money. Therefore, to increase the size and scope of your agency, you must screw up and then argue that the problem needs more money than initially laid out. (Businesses die from inefficiency; governments simply get bigger.)
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Now, which of these institutions — government or business — is more likely to give you what you want?
Granted, there are exceptions. Most of these involve government facilities with professional esprit, such as NASA, research centers, and fire departments. These remain, however, generally much more expensive than their private counterparts. Meanwhile, there are good people in bad institutions, and vice versa; we shouldn’t blame individuals for the systemic flaws of their places of employment. Instead, the chart above sets forth the general trends of government and business as purveyors of goods and services.
Still, what about those bad companies that have run roughshod over the rest of us? Nearly always, these are corporations who lobby hard in Washington, donate the most to election campaigns, and twist the force of government to give them unfair advantages at the expense of everyone else. If we clamp down on all business because a few companies have gamed the system, we toss out the good guys with the bad.
But that’s a whole ‘nuther topic.