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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 priv

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.
- danaris 4y ago
  The profit motive is part of the problem. It routinely creates perverse incentives. It has gotten to the point that, rather than seeking to build a great product or provide a great service and make a good profit for doing so, far, far too many companies are seeking to make as much profit as conceivably possible, and making the product or providing the service is simply a necessary evil toward that end. That is part of what has led to the catastrophic financialization of so much of our economy. Money is not the end. Money is a tool. The end goal should always have been better products and services, a better society, and happier people.
  - nicoburns 4y ago
    Yes. It seems that capitalism is suffering from a particularly unfortunate case of Goodhart's law [0]: "When a measure becomes a target, it ceases to be a good measure" Capitalism is founded upon the idea that the amount the market is willing to pay for something is a good measure of its true value. Which used to be a pretty good measure (and to an extent still is - for now). But deregulation has increased our dependence on this measure, which in turn has lead to an increase in it is being gamed. And over time an increasing share of financially successful businesses are those that exploit failures in the metric rather than those providing genuine value. [0]: https://en.wikipedia.org/wiki/Goodhart%27s_law https://en.wikipedia.org/wiki/Goodhart%27s_law
    - danaris 4y ago
      > (and to an extent still is - for now) Upon reflection, I think that this is also a significant aspect of one major part of the problem today. In the general case, yes: retail products, for instance, are still subject to market forces such that the price you pay bears some reasonable resemblance to what society considers the value of the product. But what about ad-supported services? The people consuming the services are not, in fact, paying with money. They have no way of gauging how much the services cost, nor how much they personally are giving up in terms of personal data to indirectly pay that cost. The personal data sector of the economy is, I believe, a perfect example of a place where Goodhart's Law has run rampant, with the only measures available being "how many users" and "how much annual recurring revenue", and both of these being hopelessly complicated—the former to determine just what is a user, and the latter to determine how the value of the service to its users actually translates into profit. Not sure how coherent this is, but it seems very relevant.
- AlbertCory 4y ago
  SpaceX is maybe better explained by The Innovator's Dilemma than by the profit motive. They have radically different ways of doing launches. These are directly threatening to NASA people wedded to the old ways. In order for NASA to adopt their methods wholesale, they'd have to reorganize completely and probably fire a lot of people. And still do an inferior job, because it would take them years. Wait 20 years and SpaceX will be just as wedded to the methods of 2022 as NASA's wedded to 1969. What I said about The Innovator's Dilemma is not the whole story. Governments are inherently more risk-adverse, so they'd prefer to take three times as long if it's perceived as safer.
  - origin_path 4y ago
    Right, but we're not comparing the government vs SpaceX, but rather, government vs the private sector as a whole. So if SpaceX stagnates (or Google) then other companies will eventually reach the point where they can outcompete them and things start moving again. But you can't usually outcompete the government regardless of how over-large or stagnant it becomes. That's the fundamental difference.
    - nicoburns 4y ago
      You can't outcompete the government, but you could outcompete a publicly run business if it was setup as a competitive business with its own separate budget. In that case, the government acts quite like a private businesses investors/shareholders rather than running the business directly. Which seems like a best of both worlds in many cases.
      - origin_path 4y ago
        Budget separate from what? The government's own budget? That's not possible, at least not in a western style democracy. If it's truly separate then it's not publicly run in any meaningful sense, and if that's not true then it's just a normal government department - it can't exist separate of government funding so in practice, the government controls it regardless of what the participants may claim. There's not really any such thing as the best of both worlds IMHO. What exact benefits are delivered by being run by the government? The best arguments are in cases of natural monopolies, but even there, there's benefits to just issuing licenses to sub-contractors (the result is a sort of quasi half private half public business of the type you suggest but nobody claims this model is one to use when not strictly necessary).
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.

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.
danaris 4y ago
The profit motive is part of the problem. It routinely creates perverse incentives. It has gotten to the point that, rather than seeking to build a great product or provide a great service and make a good profit for doing so, far, far too many companies are seeking to make as much profit as conceivably possible, and making the product or providing the service is simply a necessary evil toward that end. That is part of what has led to the catastrophic financialization of so much of our economy. Money is not the end. Money is a tool. The end goal should always have been better products and services, a better society, and happier people.
- nicoburns 4y ago
  Yes. It seems that capitalism is suffering from a particularly unfortunate case of Goodhart's law [0]: "When a measure becomes a target, it ceases to be a good measure" Capitalism is founded upon the idea that the amount the market is willing to pay for something is a good measure of its true value. Which used to be a pretty good measure (and to an extent still is - for now). But deregulation has increased our dependence on this measure, which in turn has lead to an increase in it is being gamed. And over time an increasing share of financially successful businesses are those that exploit failures in the metric rather than those providing genuine value. [0]: https://en.wikipedia.org/wiki/Goodhart%27s_law https://en.wikipedia.org/wiki/Goodhart%27s_law
  - danaris 4y ago
    > (and to an extent still is - for now) Upon reflection, I think that this is also a significant aspect of one major part of the problem today. In the general case, yes: retail products, for instance, are still subject to market forces such that the price you pay bears some reasonable resemblance to what society considers the value of the product. But what about ad-supported services? The people consuming the services are not, in fact, paying with money. They have no way of gauging how much the services cost, nor how much they personally are giving up in terms of personal data to indirectly pay that cost. The personal data sector of the economy is, I believe, a perfect example of a place where Goodhart's Law has run rampant, with the only measures available being "how many users" and "how much annual recurring revenue", and both of these being hopelessly complicated—the former to determine just what is a user, and the latter to determine how the value of the service to its users actually translates into profit. Not sure how coherent this is, but it seems very relevant.
AlbertCory 4y ago
SpaceX is maybe better explained by The Innovator's Dilemma than by the profit motive. They have radically different ways of doing launches. These are directly threatening to NASA people wedded to the old ways. In order for NASA to adopt their methods wholesale, they'd have to reorganize completely and probably fire a lot of people. And still do an inferior job, because it would take them years. Wait 20 years and SpaceX will be just as wedded to the methods of 2022 as NASA's wedded to 1969. What I said about The Innovator's Dilemma is not the whole story. Governments are inherently more risk-adverse, so they'd prefer to take three times as long if it's perceived as safer.
- origin_path 4y ago
  Right, but we're not comparing the government vs SpaceX, but rather, government vs the private sector as a whole. So if SpaceX stagnates (or Google) then other companies will eventually reach the point where they can outcompete them and things start moving again. But you can't usually outcompete the government regardless of how over-large or stagnant it becomes. That's the fundamental difference.
  - nicoburns 4y ago
    You can't outcompete the government, but you could outcompete a publicly run business if it was setup as a competitive business with its own separate budget. In that case, the government acts quite like a private businesses investors/shareholders rather than running the business directly. Which seems like a best of both worlds in many cases.
    - origin_path 4y ago
      Budget separate from what? The government's own budget? That's not possible, at least not in a western style democracy. If it's truly separate then it's not publicly run in any meaningful sense, and if that's not true then it's just a normal government department - it can't exist separate of government funding so in practice, the government controls it regardless of what the participants may claim. There's not really any such thing as the best of both worlds IMHO. What exact benefits are delivered by being run by the government? The best arguments are in cases of natural monopolies, but even there, there's benefits to just issuing licenses to sub-contractors (the result is a sort of quasi half private half public business of the type you suggest but nobody claims this model is one to use when not strictly necessary).

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.