4 ms·

My pet theory is that the problems which people often associate with government have nothing to do with the difference between government and private business a

My pet theory is that the problems which people often associate with government have nothing to do with the difference between government and private business at all and are simply a product of organisation size. The logic that a small number of decisions makers directing a large amount of labour/capital leads to inefficiencies due to a decision-making bottleneck certainly seems to apply to both (and indeed to wealthy individuals beyond a certain level of wealth).

midenginedcoupe 4y ago
Strongly agree. Anyone who's worked in private orgs of comparable sizes can attest to their horrendous inefficiencies and waste. The idea that somehow the private sector is inherently more productive or efficient is simply not bourne out in practice. But it _sounds_ like it ought to be true so the idea won't die. And we're all worse off as a result.
- Melatonic 4y ago
  Very true Also you get what you pay for and governments generally are not paying at the top of the scale. Giant + middle of the road pay is going to get you the same results in a private org!
  - WalterBright 4y ago
    If you add in the value of benefits, government employment pays very, very well.
- WalterBright 4y ago
  They are inherently more productive or efficient because: 1. they have a profit motive, and if they don't show a profit, they die 2. smaller companies continually replace large, bureaucratic organizations > simply not bourne out in practice SpaceX can launch rockets at what, 10% of the cost of NASA? > we're all worse off as a result How so?
  - effingwewt 4y ago
    Amazon famously operated (may still, couldn't care less) at a loss. As someone noted above, both can be true- govt can be incredibly inefficient but so can businesses. My mother hated working with/for the govt as it made 'firing someone an act of congress'. As if to say neigh impossible. I'd argue we have all incentives misaligned and that is what causes both govt and private business to become shit-shows. We have government agencies maxing out their spending every year to keep their budgets growing. We have businesses engaging in moral hazard knowing the government (taxpayers) will bail them out. We need reform from the top down, inside and out.
    - WalterBright 4y ago
      > Amazon famously operated (may still, couldn't care less) at a loss. What's wrong with that? Companies trying to get started and establish themselves operate at a loss, burning their investors' capital. Most companies take many years before eking out a profit.
      - effingwewt 4y ago
        You said private companies have a profit motive- if not, they die. I used Amazon as a counter-point. Uber still isn't profitable. So if companies can run for over a decade without making a profit, I'd again say the entire system is broken. Zombie companies burning capital while driving out possibly profitable competitors is a symptom of rot, not a successful financial system. Again, my point is that for profit companies are every bit as bad if not worse than government agencies who at least pretend to have oversight.
  - rurp 4y ago
    Once companies reach a certain size, their continued success is driven far more by network effects, brand awareness, anti-competitive moats, and similar factors than they it is by efficiency and innovation. There are plenty of individual examples in both directions. Instead of SpaceX, compare private insurance companies to medicaire. Medicaire is far more efficient.
  - 4y ago
- dntrkv 4y ago
  I think both things can be true. Large entities, no matter private or public, suffer from inefficiency. But, private entities have more control over the allocation of their resources. With a private enterprise, you have stakeholders at the top that can single-handedly reallocate resources to/away from endeavors as needed. Within government, that can be a lot more difficult as resource allocation is more complex with many more stakeholders and layers of bureaucracy. This is especially true in democracies where changes have to be approved by either the citizens or partisan groups within congress whose goals may be in direct contradiction to the success of your organization.
- citrin_ru 4y ago
  Idea is that too inefficient private org will go out of business (or at least loose market share), but an inefficient government will remain a burden for much longer time.
  - nicoburns 4y ago
    That can be how it works, but far from always. Consider Comcast as an example of an inefficient private business that has stuck around for a long time and looks set to continue to do so for some time yet. Conversely, publicly run businesses can be setup to run like private businesses that shutdown if they're not competing. This is especially the case if the public business co-exists with private businesses rather than replacing them.
rurp 4y ago
My experience lines up with this. I've worked for large and small companies, as well as the federal govt. My impression of the govt department I was in was that it was reasonably efficient for its size; which, since it was huge, meant it was not very efficient. That said, it didn't seem notably worse than the large corporation I'd worked for. In fact they seemed quite similar to each other.

midenginedcoupe 4y ago

Strongly agree. Anyone who's worked in private orgs of comparable sizes can attest to their horrendous inefficiencies and waste. The idea that somehow the private sector is inherently more productive or efficient is simply not bourne out in practice. But it _sounds_ like it ought to be true so the idea won't die. And we're all worse off as a result.

Melatonic 4y ago
Very true Also you get what you pay for and governments generally are not paying at the top of the scale. Giant + middle of the road pay is going to get you the same results in a private org!
- WalterBright 4y ago
  If you add in the value of benefits, government employment pays very, very well.
WalterBright 4y ago
They are inherently more productive or efficient because: 1. they have a profit motive, and if they don't show a profit, they die 2. smaller companies continually replace large, bureaucratic organizations > simply not bourne out in practice SpaceX can launch rockets at what, 10% of the cost of NASA? > we're all worse off as a result How so?
- effingwewt 4y ago
  Amazon famously operated (may still, couldn't care less) at a loss. As someone noted above, both can be true- govt can be incredibly inefficient but so can businesses. My mother hated working with/for the govt as it made 'firing someone an act of congress'. As if to say neigh impossible. I'd argue we have all incentives misaligned and that is what causes both govt and private business to become shit-shows. We have government agencies maxing out their spending every year to keep their budgets growing. We have businesses engaging in moral hazard knowing the government (taxpayers) will bail them out. We need reform from the top down, inside and out.
  - WalterBright 4y ago
    > Amazon famously operated (may still, couldn't care less) at a loss. What's wrong with that? Companies trying to get started and establish themselves operate at a loss, burning their investors' capital. Most companies take many years before eking out a profit.
    - effingwewt 4y ago
      You said private companies have a profit motive- if not, they die. I used Amazon as a counter-point. Uber still isn't profitable. So if companies can run for over a decade without making a profit, I'd again say the entire system is broken. Zombie companies burning capital while driving out possibly profitable competitors is a symptom of rot, not a successful financial system. Again, my point is that for profit companies are every bit as bad if not worse than government agencies who at least pretend to have oversight.
- rurp 4y ago
  Once companies reach a certain size, their continued success is driven far more by network effects, brand awareness, anti-competitive moats, and similar factors than they it is by efficiency and innovation. There are plenty of individual examples in both directions. Instead of SpaceX, compare private insurance companies to medicaire. Medicaire is far more efficient.
- 4y ago
dntrkv 4y ago
I think both things can be true. Large entities, no matter private or public, suffer from inefficiency. But, private entities have more control over the allocation of their resources. With a private enterprise, you have stakeholders at the top that can single-handedly reallocate resources to/away from endeavors as needed. Within government, that can be a lot more difficult as resource allocation is more complex with many more stakeholders and layers of bureaucracy. This is especially true in democracies where changes have to be approved by either the citizens or partisan groups within congress whose goals may be in direct contradiction to the success of your organization.
citrin_ru 4y ago
Idea is that too inefficient private org will go out of business (or at least loose market share), but an inefficient government will remain a burden for much longer time.
- nicoburns 4y ago
  That can be how it works, but far from always. Consider Comcast as an example of an inefficient private business that has stuck around for a long time and looks set to continue to do so for some time yet. Conversely, publicly run businesses can be setup to run like private businesses that shutdown if they're not competing. This is especially the case if the public business co-exists with private businesses rather than replacing them.

rurp 4y ago

My experience lines up with this. I've worked for large and small companies, as well as the federal govt. My impression of the govt department I was in was that it was reasonably efficient for its size; which, since it was huge, meant it was not very efficient. That said, it didn't seem notably worse than the large corporation I'd worked for. In fact they seemed quite similar to each other.