Government or Business?

Posted on 2012 July 23


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

–            –            –            –

* 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.)

–            –            –            –

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.


Posted in: Politics