5 ms·

Historically it's from improved efficiencies, which privitazation incentivizes and government does not.

rayiner 10y ago
Government inefficiency mostly comes from above market wages and benefits to lower-skill workers and money-losing routes and services. If you can't touch either, you're pretty stuck. E.g., how would a real private corporation run say Amtrak more efficiently that didn't involve cutting jobs and unprofitable routes?
- merpnderp 10y ago
  It wouldn't because most of the routes aren't economical at the current consumer price. Amtrak always feels like the entire country subsidizing the rich and powerful as they commute over the NE.
  - harryh 10y ago
    Amtrak always feels like the entire country subsidizing the rich and powerful as they commute over the NE. It's actually the opposite. The corridor from Washington DC to NYC to Boston is basically the only profitable Amtrak route and subsidizes the rest of the country. See https://www.brookings.edu/interactives/u-s-passenger-rail-ridership/ https://www.brookings.edu/interactives/u-s-passenger-rail-ri...
  - chrisseaton 10y ago
    Do rich and powerful people take Amtrak trains? I would have thought they would fly.
Retric 10y ago
In cases like Medicare, which has lower overhead than private insurance, it's a tricky question.
pdabbadabba 10y ago
That's certainly the party line, but is there any evidence that it's actually true? I've seen little to support it, especially when you disregard "efficiency" gains that come from cutting what a municipal agency would have called "services." The problem, as many others are also pointing out, is that government entities and private businesses typically have (and often should have different motivations). So when a private business takes over and makes things more efficient, this often comes at the expense of things that we want our government to value, not economize on.
- merpnderp 10y ago
  Then the municipality should have made that service a required part of the contract with penalties built in. The government always sets the rules of the economy, which is why it tends towards monopolies where graft and corruption can flourish. The ultimate example being when the government controls everything and you get the absurd differences between near sides of the Iron Curtain.
- djschnei 10y ago
  Interesting case. Isn't it true, however, that everything is economized whether we like it or not? Even public works that add "value" still rely on finite resources (human labor, natural resources, etc...). Can we really just ignore the laws of resource allocation because we "value" something? If we really "valued" something, why not let the market strike the balance between value and efficiency?
  - Retric 10y ago
    Externalities, generally prevent profit from aligning with optimum resource allocation for society. I may only be willing to pay X to ride a subway and it might cost Y to provide subway service, but having one less commuter on the roads is worth Z to society. In a classic free market if X < Y then I don't ride the subway, but if X < (Y - Z) society is better off if I do ride the subway. Further, subways systems, electricity, water, etc are far more efficient as a single provider which suggests a heavily regulated utility. But, if the government is going to subsidizes and heavily regulate a company like this then it's not really a company any more just a government organization with a funky org chart. To further complicate things, this opens the door for a huge range of corruption as someone is legally allowed to take taxpayer money and profit.

Government inefficiency mostly comes from above market wages and benefits to lower-skill workers and money-losing routes and services. If you can't touch either, you're pretty stuck. E.g., how would a real private corporation run say Amtrak more efficiently that didn't involve cutting jobs and unprofitable routes?

merpnderp 10y ago
It wouldn't because most of the routes aren't economical at the current consumer price. Amtrak always feels like the entire country subsidizing the rich and powerful as they commute over the NE.
- harryh 10y ago
  Amtrak always feels like the entire country subsidizing the rich and powerful as they commute over the NE. It's actually the opposite. The corridor from Washington DC to NYC to Boston is basically the only profitable Amtrak route and subsidizes the rest of the country. See https://www.brookings.edu/interactives/u-s-passenger-rail-ridership/ https://www.brookings.edu/interactives/u-s-passenger-rail-ri...
- chrisseaton 10y ago
  Do rich and powerful people take Amtrak trains? I would have thought they would fly.

Retric 10y ago

In cases like Medicare, which has lower overhead than private insurance, it's a tricky question.

pdabbadabba 10y ago

That's certainly the party line, but is there any evidence that it's actually true? I've seen little to support it, especially when you disregard "efficiency" gains that come from cutting what a municipal agency would have called "services." The problem, as many others are also pointing out, is that government entities and private businesses typically have (and often should have different motivations). So when a private business takes over and makes things more efficient, this often comes at the expense of things that we want our government to value, not economize on.

merpnderp 10y ago
Then the municipality should have made that service a required part of the contract with penalties built in. The government always sets the rules of the economy, which is why it tends towards monopolies where graft and corruption can flourish. The ultimate example being when the government controls everything and you get the absurd differences between near sides of the Iron Curtain.
djschnei 10y ago
Interesting case. Isn't it true, however, that everything is economized whether we like it or not? Even public works that add "value" still rely on finite resources (human labor, natural resources, etc...). Can we really just ignore the laws of resource allocation because we "value" something? If we really "valued" something, why not let the market strike the balance between value and efficiency?
- Retric 10y ago
  Externalities, generally prevent profit from aligning with optimum resource allocation for society. I may only be willing to pay X to ride a subway and it might cost Y to provide subway service, but having one less commuter on the roads is worth Z to society. In a classic free market if X < Y then I don't ride the subway, but if X < (Y - Z) society is better off if I do ride the subway. Further, subways systems, electricity, water, etc are far more efficient as a single provider which suggests a heavily regulated utility. But, if the government is going to subsidizes and heavily regulate a company like this then it's not really a company any more just a government organization with a funky org chart. To further complicate things, this opens the door for a huge range of corruption as someone is legally allowed to take taxpayer money and profit.