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I think this may explain part of why people tend to think of companies as "efficient" and governments as "wasteful": companies have more leeway to choose their

I think this may explain part of why people tend to think of companies as "efficient" and governments as "wasteful": companies have more leeway to choose their metrics and externalize the unmeasured things.

Jensson 5y ago
If you think government agencies doesn't externalize costs then I have bad news for you! If we look at how communism went in practice then you'd see that those agencies were much better at externalizing costs than western companies. As long as they could optimize for the target measure they were fine and could blame everyone else when things didn't work. People think of governments as wasteful since governments never seem to manage long supply chains well. They can run services like roads, electricity, school, healthcare etc that are simple as long as all the necessary tools and materials are supplied by the private sector. They seemingly can't run stuff like medicine manufacturing, heavy machinery engineering etc.
- hutzlibu 5y ago
  "They seemingly can't run stuff like medicine manufacturing, heavy machinery engineering etc. " Well, I now have a image of soviet russias state factories spitting out tank after tank ... Governments can handle this. Also "government" can mean very different things, but I agree that on a general base, they are not able to handle a complex chain of supply. Or at least not as good as a distributed market of private entities.
  - Jensson 5y ago
    Yeah, I should have added "efficiently" in there. And manufacturing has gotten a lot more complex since back then, not sure they could properly manage a modern supply chain with related electronics etc, without relying on the private sector to provide things. But we know both China and Soviet gave up trying to accomplish things without the private sector, so I'd assume they couldn't.
thristian 5y ago
More simply, companies can solve 80% of the problem, while governments have to solve 100% of the problem (i.e. supporting people in wheelchairs in remote local communities without smart-phones), which requires vastly more effort.

Jensson 5y ago

If you think government agencies doesn't externalize costs then I have bad news for you! If we look at how communism went in practice then you'd see that those agencies were much better at externalizing costs than western companies. As long as they could optimize for the target measure they were fine and could blame everyone else when things didn't work. People think of governments as wasteful since governments never seem to manage long supply chains well. They can run services like roads, electricity, school, healthcare etc that are simple as long as all the necessary tools and materials are supplied by the private sector. They seemingly can't run stuff like medicine manufacturing, heavy machinery engineering etc.

hutzlibu 5y ago
"They seemingly can't run stuff like medicine manufacturing, heavy machinery engineering etc. " Well, I now have a image of soviet russias state factories spitting out tank after tank ... Governments can handle this. Also "government" can mean very different things, but I agree that on a general base, they are not able to handle a complex chain of supply. Or at least not as good as a distributed market of private entities.
- Jensson 5y ago
  Yeah, I should have added "efficiently" in there. And manufacturing has gotten a lot more complex since back then, not sure they could properly manage a modern supply chain with related electronics etc, without relying on the private sector to provide things. But we know both China and Soviet gave up trying to accomplish things without the private sector, so I'd assume they couldn't.

thristian 5y ago

More simply, companies can solve 80% of the problem, while governments have to solve 100% of the problem (i.e. supporting people in wheelchairs in remote local communities without smart-phones), which requires vastly more effort.