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> I prefer the latter - we should be adding efficiency to the state, while giving people more choice on how to help each other. Agreed. The state has become mu

> I prefer the latter - we should be adding efficiency to the state, while giving people more choice on how to help each other. Agreed. The state has become much too inefficient. Sadly, much of that is the state’s own doing by continuously adding layers of bureaucracy and complexity. Many of the problems could be solved with technology at scale. We could use software to measure government like we measure every other business process. We can and must enforce checks and balances.

z3rgl1ng 6y ago
Citations for your claims? As I understand it most inefficiencies we see in government come from stripping resources out, not from wasteful allocation.
- bhupy 6y ago
  No, both the inflation adjusted revenue (receipts) and spending (outlays) of the Federal government have been constantly increasing — the latter unfortunately more rapidly than the former: https://www.taxpolicycenter.org/statistics/federal-receipt-and-outlay-summary https://www.taxpolicycenter.org/statistics/federal-receipt-a... Another example, inflation adjusted per-pupil education expenditure has seen a constant increase over time: https://nces.ed.gov/programs/digest/d19/tables/dt19_236.55.asp?current=yes https://nces.ed.gov/programs/digest/d19/tables/dt19_236.55.a...
AlexandrB 6y ago
> Agreed. The state has become much too inefficient. This is frequently stated as fact, but no evidence is provided. > We could use software to measure government like we measure every other business process. Perhaps we could get SoftBank to measure government efficiency. They seem to be trusted with vast sums of money so they must be particularly good at evaluating business efficiency.
- bhupy 6y ago
  I mean, when a corporation is unable to collect enough money to continue operating, it goes out of business. When a government program is unable to collect enough money to continue operating, we increase its budget. SoftBank is a good example; as long as they continue to lose money, they lose the confidence of shareholders. If their track record continues, they risk going the way of other big banks (Bear Stearns, Lehman Brothers). Ask yourself how many companies from the 20th century are now defunct vs government programs. Efficiency is a byproduct of change & evolution. Inefficiency is a byproduct of institutional sclerosis.
  - stephenhuey 6y ago
    > when a corporation is unable to collect enough money to continue operating, it goes out of business This is different from saying an organization is inefficient. From my experience in the corporate world, some businesses can be VERY inefficient compared to other businesses and still be getting enough done to move the ball forward to the satisfaction of stakeholders. As much as people complain about bureaucratic government organizations being too inefficient, I'm not convinced that they are less efficient than many "successful" large corporations. The difference is that they are essentially like a non-profit and complaints are made without sufficiently measuring the value of their work (especially in comparison to massive for-profit organizations). I'm not saying more nimble organizations cannot produce more per-capita value, but there are disadvantages with size and also sometimes advantages such as economy of scale.
    - bhupy 6y ago
      It’s not different, because businesses that are “VERY inefficient” often end up dying. There’s no structural permanence baked into the corporate system that guarantees that a corporation will exist forever. On the other hand, governments and state actors are largely static. The institutions and systems that govern them seldom change. And the larger the polity, the harder it is to build up the political will for democratic institutions to evolve/change. It is very difficult (IMO impossible) for an inefficient government to “go out of business”, so to speak. > There are disadvantages with size and also sometimes advantages such as economy of scale This is absolutely correct, but the market system ensures that whichever corporation becomes large enough to deliver on those economies of scale is selected as a function of their ability to deliver (for the most part). Ask yourself what would happen if we democratically granted Sears a legally authorized monopoly to essentially exist in perpetuity like states and state programs exist today. Would they have been able to efficiently continue delivering value as the world changed? Would we have allowed them to die and be replaced? The fact that they were defeated to the point of bankruptcy by Amazon et al is a feature of the system that is notably lacking in state institutions. In fact, the state institutions that perform the best are the ones that are the smallest/most decentralized: https://www.reuters.com/article/us-health-coronavirus-podcast-breakingvi/breakingviews-the-exchange-too-small-to-fail-idUSKBN21P3E3 https://www.reuters.com/article/us-health-coronavirus-podcas...
- hsitz 6y ago
  I believe there are studies of the U.S. Medicare program that show it to be more efficient than private insurers. (Maybe someone knows a weblink to info on that issue offhand . . . ). Moroever, my understanding is that Medicare could be even more efficient if it were not handcuffed in various ways (e.g., legal inability to negotiate pharmaceutical prices).
  - bhupy 6y ago
    So full disclosure: I work in claims processing. First of all, Medicare is only “more efficient” on account of price controls. “Legal inability to negotiate pharmaceutical prices” is just a euphemism for “inability to force pharmaceuticals to charge anything other than a defined amount of money”, or in other words: price controls. If a law was passed today that forced private insurers to use the Medicare fee schedules, they would be just as “efficient”. Whether price controls are an efficient way to run an industry is a separate issue entirely. Second of all, Medicare is separated into “original Medicare” (which is the government-run insurance program), and “Medicare Advantage aka Medicare Part C” (which is private insurance offered to Medicare beneficiaries). The data we have right now shows that Medicare Advantage is actually the part of Medicare that’s working the best in terms of raw efficiency and outcomes[1]. 34% of Medicare beneficiaries have elected Medicare Advantage instead of “Original Medicare”, and that number has been growing[2]. [1] https://freopp.org/medicare-advantage-a-platform-for-affordable-health-reform-fbe31bf444f3 https://freopp.org/medicare-advantage-a-platform-for-afforda... [2] https://www.kff.org/medicare/fact-sheet/medicare-advantage/ https://www.kff.org/medicare/fact-sheet/medicare-advantage/
    - hsitz 6y ago
      Thanks for the clarification. Regarding the Medicare Part D provisions, which you call "price controls" . . . to many that term may imply that pharmaceutical companies have had to lower their prices for Medicare. My understanding is that a common complaint against Part D is that these prices are set at levels that are very favorable to the pharmaceutical companies (i.e., high), and that if there were free negotiation for drug prices the size and market power of Medicare would allow it to negotiate better prices. Curious if you have any comment on that.
- shuckles 6y ago
  2/3s of the increase in cost of government services can be explained by decreased productivity: https://www.jstor.org/stable/30024147 https://www.jstor.org/stable/30024147. Alon Levy has an ongoing study into US construction costs in particular, which are almost entirely focused on government funded and executed infrastructure projects: https://pedestrianobservations.com/2019/03/03/why-american-costs-are-so-high-work-in-progress/ https://pedestrianobservations.com/2019/03/03/why-american-c...
- leetcrew 6y ago
  >> Agreed. The state has become much too inefficient. > This is frequently stated as fact, but no evidence is provided. an in-depth analysis is beyond this particular computer nerd, but does it not suffice to observe that, dollar-for-dollar, US public services seem to do much worse than elsewhere in the world? education is a good example. per-student, the US spends roughly the same amount as or more than other OECD countries, yet seems to get much worse outcomes.
- jlokier 6y ago
  > This is frequently stated as fact, but no evidence is provided. Indeed. Last I heard on the subject, government does a great many things people don't think of at first, for example facilitating R&D that wouldn't otherwise occur, and large scale administration and maintenance of infrastructure, and much of its activity is ludicrously efficient as a multiplier for the economy compared with how people think of it, and cost effective or at least competitive with the private sector on many things that it does.
- adaisadais 6y ago
  > This is frequently stated as fact, but no evidence is provided. I was referring to the U.S.; if you don’t live here I could see how you might come up with the conclusion That the state here is efficient. If you do live here it is more than apparent that there is no equilibrium of supplies and demands. Come spend a month in San Francisco, pay our taxes then tell me if you think the state is anywhere remotely close to efficiency. >Perhaps we could get SoftBank to measure government efficiency... Lol, or we could from the private sector build the tools necessary for the public sector as sort of a public good. This would be a great way for companies like Google and Facebook to have some positive PR when it comes to privacy. SoftBank is less a company but more of one man’s ego with capital. “Businesses” like that never last from generation to generation unless they have dumb luck. Again, I don’t think I need to cite lots of sources here for you when common sense makes things apparent.
AlexTWithBeard 6y ago
This. New York City charges its residents almost 4% tax from salaries over $50,000. It's huge money. What do the citizens get in return? Clean streets? Nope. Free museums? Nope. (Hello, London!) Best in class public transportation? Good joke. Effective homeless rehabilitation programs? Affordable healthcare for everyone? State of the art digital services for the citizens? Low crime rate? Bueller? Bueller?
- seibelj 6y ago
  Of course, just a bit more taxes will fix everything! /s
- jlokier 6y ago
  > almost 4% [...] It's huge money. No it isn't, compared with the scale of the things you want to spend it on. In places that deliver even a half-assed version of the things you described (e.g. London - no effective homeless rehabilitation), the tax rate on salaries is much higher than 4% to pay for what they do provide. That's not inefficiency. You have listed a bunch of things that cost more than that to provide at the scale implied in "for everyone". And you effectively cherry-picked. You haven't listed hundreds of other "hidden service" things that the money is really needed for which are actually being provided, but people don't think of, yet are essential to the health of the place. For example collecting and processing the garbage, recycling, street signs, police, fire service, food vendor safety inspections, child welfare services, those sorts of things tend to be well run in the ways meant by "efficient". And many services need to be paid for that not every individual needs at every stage in their lives, and people just don't realise how much of it there is. E.g. the schools for kids with learning difficulties? They are needed, and sure aren't being paid for out of every parent's personal money, and anyway some of those kids don't have living parents.
  - AlexTWithBeard 6y ago
    It sounds reasonable: we all know taxes should be collected to pay for community services and such. Then at some point you realize that other places which do not collect 4% tax still have street signs, garbage collection, police, fire service and all "those sort of things". Often of a higher quality than those in NYC.

z3rgl1ng 6y ago

Citations for your claims? As I understand it most inefficiencies we see in government come from stripping resources out, not from wasteful allocation.

bhupy 6y ago
No, both the inflation adjusted revenue (receipts) and spending (outlays) of the Federal government have been constantly increasing — the latter unfortunately more rapidly than the former: https://www.taxpolicycenter.org/statistics/federal-receipt-and-outlay-summary https://www.taxpolicycenter.org/statistics/federal-receipt-a... Another example, inflation adjusted per-pupil education expenditure has seen a constant increase over time: https://nces.ed.gov/programs/digest/d19/tables/dt19_236.55.asp?current=yes https://nces.ed.gov/programs/digest/d19/tables/dt19_236.55.a...

AlexandrB 6y ago

> Agreed. The state has become much too inefficient. This is frequently stated as fact, but no evidence is provided. > We could use software to measure government like we measure every other business process. Perhaps we could get SoftBank to measure government efficiency. They seem to be trusted with vast sums of money so they must be particularly good at evaluating business efficiency.

bhupy 6y ago
I mean, when a corporation is unable to collect enough money to continue operating, it goes out of business. When a government program is unable to collect enough money to continue operating, we increase its budget. SoftBank is a good example; as long as they continue to lose money, they lose the confidence of shareholders. If their track record continues, they risk going the way of other big banks (Bear Stearns, Lehman Brothers). Ask yourself how many companies from the 20th century are now defunct vs government programs. Efficiency is a byproduct of change & evolution. Inefficiency is a byproduct of institutional sclerosis.
- stephenhuey 6y ago
  > when a corporation is unable to collect enough money to continue operating, it goes out of business This is different from saying an organization is inefficient. From my experience in the corporate world, some businesses can be VERY inefficient compared to other businesses and still be getting enough done to move the ball forward to the satisfaction of stakeholders. As much as people complain about bureaucratic government organizations being too inefficient, I'm not convinced that they are less efficient than many "successful" large corporations. The difference is that they are essentially like a non-profit and complaints are made without sufficiently measuring the value of their work (especially in comparison to massive for-profit organizations). I'm not saying more nimble organizations cannot produce more per-capita value, but there are disadvantages with size and also sometimes advantages such as economy of scale.
  - bhupy 6y ago
    It’s not different, because businesses that are “VERY inefficient” often end up dying. There’s no structural permanence baked into the corporate system that guarantees that a corporation will exist forever. On the other hand, governments and state actors are largely static. The institutions and systems that govern them seldom change. And the larger the polity, the harder it is to build up the political will for democratic institutions to evolve/change. It is very difficult (IMO impossible) for an inefficient government to “go out of business”, so to speak. > There are disadvantages with size and also sometimes advantages such as economy of scale This is absolutely correct, but the market system ensures that whichever corporation becomes large enough to deliver on those economies of scale is selected as a function of their ability to deliver (for the most part). Ask yourself what would happen if we democratically granted Sears a legally authorized monopoly to essentially exist in perpetuity like states and state programs exist today. Would they have been able to efficiently continue delivering value as the world changed? Would we have allowed them to die and be replaced? The fact that they were defeated to the point of bankruptcy by Amazon et al is a feature of the system that is notably lacking in state institutions. In fact, the state institutions that perform the best are the ones that are the smallest/most decentralized: https://www.reuters.com/article/us-health-coronavirus-podcast-breakingvi/breakingviews-the-exchange-too-small-to-fail-idUSKBN21P3E3 https://www.reuters.com/article/us-health-coronavirus-podcas...
hsitz 6y ago
I believe there are studies of the U.S. Medicare program that show it to be more efficient than private insurers. (Maybe someone knows a weblink to info on that issue offhand . . . ). Moroever, my understanding is that Medicare could be even more efficient if it were not handcuffed in various ways (e.g., legal inability to negotiate pharmaceutical prices).
- bhupy 6y ago
  So full disclosure: I work in claims processing. First of all, Medicare is only “more efficient” on account of price controls. “Legal inability to negotiate pharmaceutical prices” is just a euphemism for “inability to force pharmaceuticals to charge anything other than a defined amount of money”, or in other words: price controls. If a law was passed today that forced private insurers to use the Medicare fee schedules, they would be just as “efficient”. Whether price controls are an efficient way to run an industry is a separate issue entirely. Second of all, Medicare is separated into “original Medicare” (which is the government-run insurance program), and “Medicare Advantage aka Medicare Part C” (which is private insurance offered to Medicare beneficiaries). The data we have right now shows that Medicare Advantage is actually the part of Medicare that’s working the best in terms of raw efficiency and outcomes[1]. 34% of Medicare beneficiaries have elected Medicare Advantage instead of “Original Medicare”, and that number has been growing[2]. [1] https://freopp.org/medicare-advantage-a-platform-for-affordable-health-reform-fbe31bf444f3 https://freopp.org/medicare-advantage-a-platform-for-afforda... [2] https://www.kff.org/medicare/fact-sheet/medicare-advantage/ https://www.kff.org/medicare/fact-sheet/medicare-advantage/
  - hsitz 6y ago
    Thanks for the clarification. Regarding the Medicare Part D provisions, which you call "price controls" . . . to many that term may imply that pharmaceutical companies have had to lower their prices for Medicare. My understanding is that a common complaint against Part D is that these prices are set at levels that are very favorable to the pharmaceutical companies (i.e., high), and that if there were free negotiation for drug prices the size and market power of Medicare would allow it to negotiate better prices. Curious if you have any comment on that.
shuckles 6y ago
2/3s of the increase in cost of government services can be explained by decreased productivity: https://www.jstor.org/stable/30024147 https://www.jstor.org/stable/30024147. Alon Levy has an ongoing study into US construction costs in particular, which are almost entirely focused on government funded and executed infrastructure projects: https://pedestrianobservations.com/2019/03/03/why-american-costs-are-so-high-work-in-progress/ https://pedestrianobservations.com/2019/03/03/why-american-c...
leetcrew 6y ago
>> Agreed. The state has become much too inefficient. > This is frequently stated as fact, but no evidence is provided. an in-depth analysis is beyond this particular computer nerd, but does it not suffice to observe that, dollar-for-dollar, US public services seem to do much worse than elsewhere in the world? education is a good example. per-student, the US spends roughly the same amount as or more than other OECD countries, yet seems to get much worse outcomes.
jlokier 6y ago
> This is frequently stated as fact, but no evidence is provided. Indeed. Last I heard on the subject, government does a great many things people don't think of at first, for example facilitating R&D that wouldn't otherwise occur, and large scale administration and maintenance of infrastructure, and much of its activity is ludicrously efficient as a multiplier for the economy compared with how people think of it, and cost effective or at least competitive with the private sector on many things that it does.
adaisadais 6y ago
> This is frequently stated as fact, but no evidence is provided. I was referring to the U.S.; if you don’t live here I could see how you might come up with the conclusion That the state here is efficient. If you do live here it is more than apparent that there is no equilibrium of supplies and demands. Come spend a month in San Francisco, pay our taxes then tell me if you think the state is anywhere remotely close to efficiency. >Perhaps we could get SoftBank to measure government efficiency... Lol, or we could from the private sector build the tools necessary for the public sector as sort of a public good. This would be a great way for companies like Google and Facebook to have some positive PR when it comes to privacy. SoftBank is less a company but more of one man’s ego with capital. “Businesses” like that never last from generation to generation unless they have dumb luck. Again, I don’t think I need to cite lots of sources here for you when common sense makes things apparent.

AlexTWithBeard 6y ago

This. New York City charges its residents almost 4% tax from salaries over $50,000. It's huge money. What do the citizens get in return? Clean streets? Nope. Free museums? Nope. (Hello, London!) Best in class public transportation? Good joke. Effective homeless rehabilitation programs? Affordable healthcare for everyone? State of the art digital services for the citizens? Low crime rate? Bueller? Bueller?

seibelj 6y ago
Of course, just a bit more taxes will fix everything! /s
jlokier 6y ago
> almost 4% [...] It's huge money. No it isn't, compared with the scale of the things you want to spend it on. In places that deliver even a half-assed version of the things you described (e.g. London - no effective homeless rehabilitation), the tax rate on salaries is much higher than 4% to pay for what they do provide. That's not inefficiency. You have listed a bunch of things that cost more than that to provide at the scale implied in "for everyone". And you effectively cherry-picked. You haven't listed hundreds of other "hidden service" things that the money is really needed for which are actually being provided, but people don't think of, yet are essential to the health of the place. For example collecting and processing the garbage, recycling, street signs, police, fire service, food vendor safety inspections, child welfare services, those sorts of things tend to be well run in the ways meant by "efficient". And many services need to be paid for that not every individual needs at every stage in their lives, and people just don't realise how much of it there is. E.g. the schools for kids with learning difficulties? They are needed, and sure aren't being paid for out of every parent's personal money, and anyway some of those kids don't have living parents.
- AlexTWithBeard 6y ago
  It sounds reasonable: we all know taxes should be collected to pay for community services and such. Then at some point you realize that other places which do not collect 4% tax still have street signs, garbage collection, police, fire service and all "those sort of things". Often of a higher quality than those in NYC.