There is a common sentiment that I see around the forums that argues that anything the Government does, the private sector can do better; and usually cheaper at the same time. I've challenged the posters of this forum many time to prove it; without a single germane attempt in reply.

I often ask this question, not to be trite, but because of a concept which I hold to be true: bureaucracy is inherently efficient, and a necessary consequence of large organizations.

Governments are wasteful not because they're governments, but because they're just plain huge. As such, corporations are equally wasteful. This subject has been on my mind lately as I read about the constant stories of corruption, graft and general mismanagement of Private Security contractors in Iraq. While some would argue that they are just another example of greedy individuals feeding at the generous public trough I am more inclined to think that reality is much more simple: the money disappeared through a blend of corruption and inefficiency; both of which are inevitable in any large bureaucracy.

My question is this:

Are governments significantly less efficient than private bureaucracies?

If so, how can you demonstrate this?

"The bureaucracy is expanding to meet the needs of the expanding bureaucracy"

Are governments significantly less efficient than private bureaucracies?

Well, I guess that would depend on the bureaucracy and its purpose. It seems like the Post Office does an admirable job at getting a letter anywhere in the U.S., and at keeping a huge work force employed. At the same, they aren't profitable. Is that a success or a failure? I could argue both sides, depending on what I think the purpose of the post office is or should be.

A key difference is that private enterprise, especially publicly traded companies, exist ONLY to turn a profit, and waste is always negative, whereas a government project can actually gain benefits through waste, since they are inherently not-for-profit. Even technically not-for-profit private organizations are generally based on profiting someone, just in a different way (tax write-offs for the operators, etc).


If so, how can you demonstrate this?

Well, at the top level level, you determine what the purpose of the organization organization should be, and then you rate it based on how much it costs to accomplish that purpose. That will give you an idea of its efficiency.

For example, in many states it is required to get a title insurance policy and open escrow in order to buy or sell a house. In other states, it is a simple contract between individuals.

Now, it seems fairly clear that the simple contract is more efficient. You hire a lawyer to draw up a contract, and then you abide by its terms. That could take a week, assuming everyone has conditions. As few as three people involved, and only one is getting paid to complete the transaction.

In the title and escrow insurance business, a fast, simple transaction can take as little as 10 days, or in the case of large commercial transactions, it can take several years. During this time, several people are getting paid to take care of different aspects of the transaction. A combined title and escrow order would cross the desk of at least 6 people if there was no sales representative or management involvement (there usually is.)

So is efficiency more important, or is the net result of the inefficiency (lots of jobs that aren't technically needed?)

Large title and escrow companies work very hard to keep the number of people involved to a minimum, in order to maximize profits, and increase volume. As they become more efficient, they lose some of the secondary benefits, as fewer people are asked to work harder. In theory, a smart enough automation system could do all of this work, and leave the bulk of the insurance industry unemployed.

Is that really efficiency? Depends on your context. Certainly, the share-holders will love it.

So while I don't believe that bureaucracies are inherently efficient, I will suggest that there are inherent advantages to inefficiency.

Man, I sooo want in on this debate.

But because of other commitments, I won't be able to sink my teeth into it until Friday.

Until then, could you clarify a point?


How can big government bureaucracies be inherently efficient, and wasteful at the same time?

Are you saying that largeness creates a certain type of waste, but that, overall, the benefits of being big make up for the losses of the bigness? Or, that there is a net efficiency gain?

Are governments significantly less efficient than private bureaucracies?

I would think that by virtue of the size of government, there are a lot of inefficiencies. In addition, government is headed by appointees put there by elected officials. Elected officials change every few years, as do the priorities expressed by the public that elects them. Were a private bureaucracy to function that way, it would still have its bottom line as the foremost consideration. "Promoting the general welfare" and "providing for the common defense" are but two of the U.S. federal government's stated priorities.

That having been said, my husband and I are blessed to receive Social Security payments consistently. We would not be able to pay our bills, feed ourselves and pay for medicines as well as raise our adolescent daughter on my husband's pension alone. While there are such boondoggles similiar to the notorious "bridge to nowhere" in Alaska that get inserted into bills and that demonstrate government waste in the eyes of the majority, there are also programs administered that contribute greatly to the welfare of the American people.

If so, how can you demonstrate this?

I would say the FEMA trailers that are still sinking in the mud in a football field in Arkansas when they were intended to temporarily house the surviving victims of Hurricane Katrina would be an example of waste.

I just don't think that a government that was solely interested in the bottom line the way that private bureaucracies are would be responsive to the needs of the general public.

The fact that SCHIP was voted down even though the cost would be roughly that of funding the war effort in Iraq for 30 days only shows me that our priorities still aren't far from those of medieval kings, especially the ones who participated in the Hundred Years' War. That's regrettable, because the current conflict in which our country is involved could well be extended for decades according to our Fearless Leader and his Vice President/Puppet Master.

Governments are inefficient not because they are "huge" but because there isn't much accountability.

It's very simple really. It's much like a union job versus a non-union job. When you come into a union job there are allready standards set, so if you can at least make those standards you will do fine. A non-union job they are always questioning your ability to perform and if you don't there aren't any many rules that could risk that job for the next person in line.

Let me use education as an example. Teacher Y and X are hired because they both have the same qualifications. Teacher Y kicks his leg up on the desk and throws out some assignments on the board day after day (true story) and doesn't really care what the children do. Teacher X does a very hard job because they care about the children's education and tries her best to make sure each child knows the material. As a result teacher X has a slightly higher gpa than teacher Y. Teacher Y continues to get paid the same as teacher X.

The problem is not size, it's accountability. Private corporations are not devoid of this problem but it is certainly more problematic in government run programs, because profit or performance is not a factor. The "program" is already funded to a company, it doesn't matter if they complete it efficiently, just as long as the job eventually gets done.

With so many countries that used to have government controlled economies doing much better when more and more companies go private im not sure why anyone would believe otherwise.. (China, Russia, some EU countries)

Are governments significantly less efficient than private bureaucracies?

If so, how can you demonstrate this?

First off great post. I believe that the Private Sector is for the most part more efficient than the Government. Case in point: If I get a sinus infection now, I have to go to the Emergency Room at the cost of around $600 for a $15 prescription all paid for by Medicare and Medicaid. I can't get into my doc at the local HMO in a time efficient manner for a cheap in office visit, thus the trip to the ER.

When I was working for Cummins International I had great Health Insurance. If I was sick, I was able to get in to see a doc for an in office visit that day at a fraction of the cost for an ER visit. In this case Private Sector easily wins out over Government.

On the flip side, when I became disabled I was working at a local glazing shop and was 2 months short of receiving the Company Healthcare Plan. So during the difficult time did the private sector help me? No. It was the Government that came to my aid. Government wins this round.

I think there are pros and cons on both sides, but in the end I believe the Private Sector is much more efficient than the Government.

Are governments significantly less efficient than private bureaucracies?

No, I agree with you ultimatejoe, inefficiency is a function of size, but is not solely determined by size - because just as large size drives some types of inefficiency, it drives economies of scale that can and sometimes do outweigh those inefficiencies.

If so, how can you demonstrate this?

Quite simply, in two ways.

1. Why is American healthcare spending the highest proportion of GDP of all industrialised nations (link), yet only 45% of it is state spending (compared to 75+% in most European countries) and, in terms of outcomes, 16% of the citizenry isn't covered at all (compared to 0.3% in Germany) and life expectancy, infant mortality and other commonly used international comparison measures put overall US healthcare standards as average, at best.
   
   Could it be that the (largely) private healthcare system in the USA is less efficient and responsive than the (largely) state-funded and/or state run systems in other industrialised countries? (Sorry, I'm sounding a bit Michael Moore lately, and I haven't even seen his new movie and don't really want to.)
   
2. If ALL government-run institutions are inherently rubbish and would be more efficient, better managed and more responsive under by private businesses with no concern other than the bottom line, privatise the military.
   
   Propose this, and you'll suddenly find all of the "free marketeers" finding reasons why the profit motive isn't ALWAYS the best thing, why foreign policy demands... etc. Basically, a long list of reasons why government control is better than private control. Then some mealy-mouthed excuses about how the military is a special case (compared to health, education, etc.)

Whoops, that should read bureaucracy is inherently inefficient.



That's not an example, it's a complete hypothetical. All we learn from it is that you believe certain things about education that may or may not be true.



That's a bold claim. If size is not a factor, why does inefficiency almost always increase the larger an organization (be it private or public) gets?



This is a more interesting argument. How are we measuring efficiency? If we consider efficiency in terms of lets say return on investment, costs or profitability then private wins out almost every time.

What if we consider total expenditure per unit and quality of output however? The government where I live privatized water testing about a decade ago, and costs decreased dramatically.

Of course, they decreased because the organization dramatically cut the size and scope of the testing process; and an outbreak of a water-borne disease ended up killing several people in one of the targetted areas. Was the efficiency increased or decreased? I would argue the latter. The profit motive can be a drag on efficiency as well as a stimulus for it, and it always removes money from the service system.

Are governments significantly less efficient than private bureaucracies?

You recently asked WillyPete, "How are we measuring efficiency?". I may be nit-picking here, but shouldn't that have been addressed in your original question? Seeing as how you created this thread and all...

That being said, I'll try my best to answer.

When I think of the term "efficiency", I think of a balance between multiple factors. In the case of governments versus privatization, I think of variables such as cost of services or products and quality of services or products. In general, I believe governments provide lower quality for higher costs. The private sector may not always do it for lower costs, they may even be higher costs, but in my opinion, almost always provide better quality.


If so, how can you demonstrate this?

Well, for starters, let's take a look at a summary of studies across nearly every industry you can think of:

PDF Doc summary with references

If, after you read through that, and you still contend that the government is better at keeping costs down, I'll just have to agree to disagree and move on.

The rest of you still with me here, now that we've established that more often than not, privatization cuts costs, what else is there? Quality is a good place to start, but how can you objectively define quality? That's the problem with "demonstrating" efficiency. I could probably find a dozen or so links showing better quality in certain industries, but I'm sure some of you could find a dozen more showing the opposite to be true.

About all I can do is point out the obvious: The DMV, Social Security, Unemployment/Welfare offices, USPS, VA Hospitals, Medicare, Public Defenders, etc... I could go on but I hope I got my point across. There may be a couple you may disagree with, but I would think that most of you, when reading through these examples, let out a slight groan at the unbelievably low quality of service many of these agencies provide.

There are probably many more variables in "efficiency" than I can come up with at 6AM, so feel free to elaborate and I'll see what I can do to address it when I wake up. Good night all.

First off, I don’t think it’s accurate to take a private contractor/government marriage and compare it to the average independent private corporation, because we are talking by and large about cost-plus contracts of a variety you don’t usually find in the strictly private world.

If the government wants a contractor to design something or do something, the contractor is paid for the job with a profit even if the work cannot be finished. In the private world, if I pay someone to build my house they build my house. In the federal world, if the government pays someone to do a job and it’s a cost plus contract, that agency’s expenses and profit are covered even if the job cannot be finished. So the inefficiencies between government and private enterprises aren’t the same when we are speaking of strictly private enterprises without a government consumer.

The above isn't really avoidable in many cases, just as government isn't avoidable (well it is, but the alternative is far worse). If we want high-order technology we have to pay cost plus contracts or no one would be able to take on the risk and fill any contract to begin with. It's the same for KBR and Halliburton or any other contractor in a war zone…because the risks involved cannot be effectively quantified beforehand and security problems can (and did) eat up the profit before the job’s completion. And whereas the government might send auditors to a company (or even military installation) within the US to look for accountability for its payment, it generally isn’t as feasible to send auditors into the battle area and have them audit contractors' cost control. So, in a nutshell, when the private markets take over a government contract, there is often a gap between oversight and accountability that didn’t exist before. You almost need a new level of government bureaucracy to oversee the private one.


I also think that conditions are different when we are speaking of agencies that can use force and comparing them to agencies that cannot. The government is the only agency that can legally authorize the offensive use of force, and it determines those conditions (since it makes the laws). So, first and foremost (to answer Jule's point on this) there is definitely a different relationship dynamic when we are speaking of policemen and military than when we are speaking of other types of business enterprise. Few of us wish to see a privately hired group of individuals tasked with enforcing the law. We might hire personal bodyguards or private security for a building, but this is far different than enmasse law enforcement by private agents. Unity of command is the first problem, then training issues, conflicts of interest, accountability, ect. In a nutshell, since the government makes the laws it is entirely practical to have a regulated body of government agents to enforce those laws (true of the military too). Not the least of which because any private agent would be entitled to quit whenever the job became inconvenient….not a very good scenario in the case of issues of security. Violent mob? Fend for yourselves people! Charge up that hill? “No thanks, I’ve decided to change my career path right now!”

Not to get off in a tangent, but even two different government agencies working together can have this problem. I’ll reference the guard, an agency that is technically state-run but kind of an in-between entity as each unit must be federalized to be employed in combat. Some guard individuals fly out here at Langley. They have a few demands. First, they don’t like to work more than 40 hours per week (as ‘volunteers’ they don’t have to…which shifts a tremendous burden to those remaining who are accountable for the results). Next, they don’t wish to fly at night. Approximately 90 percent of all missions in a real combat situation would be flown at night, but they aren’t interested in this training because it would cut into their social lives and home time. Next, they don’t wish to deploy to anywhere unpleasant. A trip to Hawaii is fine, a trip to the UAE might not be, so when the squadron plans its deployments it has to task those who are active duty whereas the guard units pick and choose which locations they are willing to be sent to. Unity of Command was the reason for the reforms that took place in the early eighties (late seventies?)…every branch of the military had its own personal little empire and didn’t wish to work with the others…it had terrible ramifications and we are going to see them again and are seeing them in certain cases (with private contractors) today in Iraq.

So, to get back on track, governments are by nature different than private enterprise and (IMO) inherently more bureaucratic because they have the full backing of reams of enforceable law under them. I suppose in theory if a huge group of thousands of citizens privately created a corporation that was so complex it also had reams of regulations to follow and everyone agreed that those who didn’t follow its bylaws would be severely punished they would encounter government-style bureaucracy problems….because they would have (for all practical purposes) privately created their own personal government.

How do laws (and government) create bureaucracy? Well, each level of accountability creates its own set of regulations…no one wishes to eliminate any regulations, because they would then be responsible for any potential adverse consequences, so they just tend to add more. This results in little flexibility. No one knows why all of the regulations are there, few if anyone could actually list 10 percent of them...but it leads to the mindset of 'It's done this way because it has always been done this way'...and doing away with those regulations, even the most ridiculous ones, is next to impossible because no one wants to suffer the consequences for making that change....and even if they do, their commander might not and if he doesn't his commander might not...and so on. In fact, there is a whole bureaucratic underlayer that creates more bureaucracy by rewarding it (come up with a new superfluous program and it's a feather in the promotion cap).

I’ll use the military again as an example. Although my husband is considered competent enough to be trusted to fly a 130 million dollar aircraft and write its corresponding 600 page operations and tactics manual, he must take a yearly course on how to operate the fire extinguisher. A yearly course on the care and feeding of the president (should it just be him and W after the fallout). A yearly course on how to not injure himself in some spectacular fashion while crossing the street….ad nauseum ect. He (and every other Airforce person) must wear a reflective belt over his camouflage at all times during exercises because he just might be crossing the street at night simulating war games and get hit by a car! One of the pilots in the squadron said that they actually wear those reflective belts in Iraq, but I can neither confirm nor deny….I’m sure a sniper would think it was a trick because no one could be that stupid right? Except the government….Even the air freshener in his squadron bathroom has been inspected for safety by military personel in the safety department and they placed a little label on it. Wouldn't want a pilot to get any in his eyes! And of course there are the layers upon layers of overseers to each and every mandatory safety program. I could go on quite a while. I am hard-pressed to think of any corporate equivalent to the above. Inefficiency might be hard to quantify in these cases, but you know it when you see it. I can't tell you how many man hours were wasted by having an agency go into every bathroom and place a sticker on every can of air freshner, for example...

The above doesn't even touch the whole budgeting aspect. In a private corporation, saved costs are generally good. In a government one, saved costs indicate that this or that agency won't need as much money next year...so they take great care to use up whatever they get. This is true of everything from public schools (no supplies left at the end of the budgeting period) to the military (burn that fuel at the end or you'll get less next year).

This is relevant to the discussion because this asks, "What is the mechanism for absorbing loss and how does it change according to size?" For now I'm just going to float out ideas and expand on them when challenged because the replies can be intensive...

Are governments significantly less efficient than private bureaucracies?
The mechanisms for putting out less efficient ideas do not exist to the same extent as they do in governments. For private bureaucracies of size, they begin to possess certain traits which allow them to absorb loses on the same level as governments. I would add there is a large difference in behaviour between small and medium level businesses and the privileged few who are able to wrap the government around their finger through lobbying. The changes in the attitude are huge. Intergovernment marriages at their core represent the ability to upload expenses onto a government where the taxes are no longer negotiable. Once expenses reach the realm of the government we abdicate the right to "choose" to pay taxes.

For governments, the debts are simply bundled and then passed off to the national bank as financial instruments much like that of a bar tab. Business do not have the ability to write off expenses in the same manner as governments. This can be expanded upon later if this piques your interest.

If so, how can you demonstrate this?

The best demonstation is a clarification of how easily bad decisions are offloaded onto other departments which is dependant on both size and reach of the organization in question.

Let us take a service which does not meet the needs of the consumer, is irrelevant to the given application, or is simply out of the reach of its target audience (too expensive) for the business side. Then look at how the revenue is collected and debt is handled and compare this with a government run program. The difference is primarily on the banking side. Wastage is the ability to continue unsuccessful ideas and the difference between government and business is the government can force people to pay for its expenses whereas business does have limits. Obviously the larger the the business the higher the limit. Therefore we need to address what happens when business becomes a function of centralization which affects responsiveness to change. This is the dividing line assuming all other aspects are the same.

When you say bureaucracy you are referring to the ups and downs of central planning as it grows within an organization. If there are good reactionary mechanisms the business or government can react to change. If not wastage occurs until the change is made. Accountability is simply the communication process which allows cause and effect to influence supply and demand. This can be quite good if we are comparing government to a cartel, or quite bad if we are comparing a fortune 500 company to small third world government.

Another point to consider is that government has the ability to regulate and set policy at a level which business does not. The point of big business is to acquire this power. I mention this because regulation can distort or mask fluxuations in demand or manipulate for short term gain at the expense of people and the environment. I'm guessing this is the area you want to focus on. This is the more difficult of the bunch because you are mixing political considerations which have a dynamic all their own but obviously affect business. More later.

Unlike many of you, I have worked in a corporation, in private law practice, and for the US govt. I have a unique perspective on your question.

So, in answer to you question, "yes" and "yes".

The easiest way to answer is to look at the personal motivations involved.

A bureaucrat succeeds by getting an ever increasing budget and more personnel. If a bureaucrat solves the problem he is tasked with solving, he loses his job, his budget and his personnel. So, a bureaucrat always wants to create studies to show his task is bigger and more difficult then ever imagined. I have personally seen this many times. If that doesn't work, then a bureaucrat seeks to expand his fiefdom to the edges of a new field to keep his personnel and budget. Turf wars in govt are commonplace.

There is very little upside for success, as salaries are limited and ususally paid by seniority; also, the govt typically works in fields as a monopoly, so there is no competition to drive efficiency.

As an example, the Dept of Agriculture processed paychecks for the agency for whom I worked--a banking agency. Why? Well, let's just say they didn't want to lose budget or personnel.

Very few govt agencies, once created, go away after they "solve" a problem.

Also, restrictive work rules, unions, special benefits, and social engineering of the workplace make the govt work force much less likely to be efficient. In the agency I worked for, many employees knew very little about their jobs but knew very much about their benefits. Indeed, if you start in govt like a ball of fire, the quagmire into which you land will quickly dampen the flame, even for motivated workers.

As to govt contractors overbilling the govt, having worked with a number of them, I can tell you that this is standard practice. The govt has the deepest possible pockets and the most lax supervision, so private contractors routinely hose the govt because they can. Private contractors are routinely smarter and more up-to-speed about what they are doing than their "supervisors" within the govt (many private govt contractors used to be in the govt) and they can play the system like a pipe organ.

In private business, by contrast, a worker succeeds by solving problems. There is an unlimited upside, either in the business in which you are working, or with another company. Thus, one's motivation is very different than in govt, and hence so are the results.

There is no question but that some private businesses, if they look, smell and taste like the govt, have many of the same problems. Big utilities, railroads, etc., with lots of unions, union benefits and union work rules, etc., can look a lot like govt, but the best private companies are constantly evolving to avoid this structure. Indeed, companies that are not freeing themselves from these restrictions are falling by the wayside in today's maket. Just look at GM's new CBA for clear evidence that the times they are a changin'. Many private companies are simply outsourcing their repetitive tasks altogether to avoid the bureaucratic claptrap. They put restrictive fee structures on their outsourcing contractors and let them worry about how to make a buck. The companies avoid all of the benefit cost they used to have with so many employees.

There are lots of other ways to look at this, but I think this should be sufficient to make my point.

There is a flaw in your basic assumption, which you hold to be true. That being:



Bureaucracy is NOT inherently efficient. In today's world, being efficient requires being adaptive to change. Bureaucracies are inherently TERRIBLE at that--in fact, they are set up to prevent it entirely. Therefore, they are inherently terrible at implementing any quality improvement processes, or adapting to any changing needs. This is why private companies can almost always outperform governmental bureaucracies at delivering most services. Combine that with the political nature of how those bureacracies are formed and staffed, and throw in the inherent inefficiences in their funding mechanisms (no incentive to improve, in fact pleny of incentives to make sure you need more money), and it only stands to reason that governmental bureaucracies are therefore inherently terrible at providing many of the services they provide. Could some of these issues be fixed without resorting to using private companies? Sure. But it's not in bureaucracy's nature to do so. Bureacracy's don't like to compete--there's no driving incentive to improve on anything, other than being a bigger bureaucracy. Quik provides some excellent examples of this.



Exactly! Another example of how bureacraciess are inherently inefficient. The rest of the world has figured out how to construct contracts that are either fixed price, or provide incentive to be completed within budget. But not the government. Why? One of the things I've seen quote often in the IT industry is that most governmental agencies don't have a clue what they need when the set these projects up. That's why they have so many changes, which in turn is why the contracts are set up as cost-plus. Why are governmental contracts 'cost-plus', whereas in the business world they're 'time and materials'? The difference is that time and materials contracts are still expected to finish on time and under budget. Cost plus contracts are essentially blank checks to keep incurring costs until somebody makes you stop. Again, only the government does this.

In all fairness to the arguement, you would have to prove conclusively that no-bid contracts are exclusively within government and nowhere else. The authour's arguement is fairly universal, can you prove such a state exists in one area but not the other? That would be a difficult stance to prove. I do argee with the statement but only because the government has broad authourity in the tendering process. Sub-contracting is a necessary evil of the state which does not specialize in a given field rather, it merely dabbles and delegates.

I can think of several instances where companies that have long running relationships set up their support lines in such a way that bringing in new competition is difficult(software support being the most obvious). I spec enough air handling equipment through my job that I must be aware of special relationships formed between complimentary companies and intercompany politics. The end result is similar to the no-bid contract, if company A gets nominated, company B must be used. While company C may build a better product, company B can engage in a monopoly by threatening to pull longstanding support.

I'd say that Capitalism hasn't finished its evolution, and has most definitely changed over its relatively brief existence. At the turn of the century, private commercial business helped drive our country to the top of the heap (with a little help from WWI.) It also gave us sweat-shops and industrial pollution, and new food safety concerns. Nowadays, sweat shops are illegal and pollution and food quality is regulated (at least some.) Had those laws not changed, even in the face of significant tragedies, we would be living in an entirely different nation now. I can't imagine that many here think safety and child labor laws are a bad thing. A hassle, perhaps, but preferable to the occasional factory fire with piles of dead teenagers.

My pre-ramble point was that, should our application of Capitalism become too efficient, the effects will be largely negative.




As I stated further into my post, the purpose of the organization must be taken into account. With my Post Office example, the purpose of this organization is not to efficiently deliver the mail. Rather, it is to deliver the mail, and employ thousands upon thousands of employees. That is the furthest thing from efficient as we generally think of it, but consider that the Post Office pays for some of it's expenses, and does keep thousands of people employed. That's thousands of people with jobs that wouldn't otherwise exist. The inefficiency yields desirable results.

If we contracted out the Post Office to UPS or FedEx, they could probably do the job for a third of the cost in dollars, but with an expense of putting thousands out of work.

I completely agree that if you measure efficiency solely in dollars saved, then private will blow the doors off any government agency. However, it's more complicated than that. The logical extreme of Capitalist efficiency is a very small segment of the population doing the work for a majority comprised of people who don't work, because they have invested into that minority, and are turning a profit on them. Is that a nation we are trying to create?




This is a wonderfully sad example of my point. When it was the government's organization, the purpose was to insure that the water was safe. When it became a private affair, the purpose was to make as much profit as possible, within the boundaries of the contract.




I'll read your link later, but for right now, I'll conceed your point, because increased dollar-for-dollar efficiency doesn't matter to the government, and I don't believe it should, to a point. Certainly, it must remain the prime motivation for private business, that's why investors invested, after all.

The government does things for motivations other than profit. At times they create jobs for the sake of having jobs to offer. They regulate things so that they are regulated, not because someone is paying them to. Certainly, there are limits that must be maintained. For example, the "Bridge to Nowhere" strikes me as a pretty classic make-work program. If the Senator had landed it, he would be locked in for re-election. Unfortunately, his reach exceeded his grasp, and now he looks like a fool. Senator Byrd never saw pork he didn't think should be in his barrel, and West Virginia loves him for it, since they would be much poorer without these projects creating jobs.

Certainly, there are beneficial side-effects to private organizations, but they generally are lower-impact, and shorter term. Walmart could go broke tomorrow and cease to exist, taking their jobs with them, but there will always be government bureacrats so long as the government exists.

Whether make-work is a good idea or bad, you must agree that it's not some private enterprise is interested in.




Certain I agree that quality is generally subject. Where we might disagree is that quality and efficiency don't walk hand in hand usually, or even often. It's like the commercial with the gum that never losses it flavor, and the company that makes it can't sell any after a while, because people already have it. It's possible to make light bulbs that would last forever, but it simply isn't good business, so they are designed to fail. Quality costs money for the company, and saves it for the customer. It's a sales bullet point, not a purpose for an organization.




We're going to have to look at these individually, but generally, I would say that none of these organizations have a purpose to be profitable, and some of them have a side purpose of creating otherwise unnecessary jobs, which is a net gain, when compared to the cost of caring for them should they be unemployed.

I think Social Security is a bit more complicated, if you're talking about investing in stock markets. Likewise national health care. I honestly don't know which I would prefer, but in either case, the devil is in the details.


I'll throw in a final ramble about one of my favorite topics, the War on Drugs.

It is undisputably true that enforcing drug laws is an incredibly inefficient business. In terms of police costs, processing, prisons, training, equipment, and overall effect on drug usage, it might be the biggest non-military waste of government money in our history.

That said, the government proceeds for several reasons, that make perfect sense in my "good inefficiency" theory.

Think of all those drug dogs, and DARE coordinators, and paid speakers, and prison guards (to say nothing of entire prisons,) and parole officers that would suddenly be out of work if the state and feds stopped enforcing drug prohibition, even for just marijuana?

Then consider all of the foreign drug enforcement aid we give to other nations for their "assistance."

So IMHO, the biggest obstacle to overturning drug prohibition isn't the effects of the drugs, or the damage they cause society, but the economic impact of dismantling this huge group of organizations that depends on the WOD to sustain itself.

Are governments significantly less efficient than private bureaucracies?[/quote]

This is just an observation. I find those who take the position that private interests can do everything better, seem to take, almost as a corollary, that those government functions which must exist can better be performed at the state and local level. I'm not sure about this either.

Oh, I doubt many people would lose their jobs if Walmart should enter financial difficulties. Long before they go "broke", Target, K-Mart, or even a group of investors wanting to enter in the world of retail would have offers on the table to purchase the company.



I can't think of too many product-based industries run by governments, at least not here in the United Sates. I'll agree with your examples and even take it a step further, pharmaceutical companies. Why cure anyone? There's no money in that. However, I think that most industries have a natural balance countermeasure. In this case, insurance companies would much rather have someone cured so they can keep gouging you month after month. Both have pretty large lobbying power.



You're right, those organizations don't have a purpose to be profitable. However, keep this in mind. Since corporations have to find a balance between good quality and low cost, they sometimes have to lower the quality as the costs goes down to stay profitable. So, you would think that since the government doesn't have this restriction(well, to a point), they could provide high quality services regardless of cost. But they don't.

As for social security, you're right, it is more complicated. Let's take stock markets out of the equation and let's say you put your money in a savings account instead of rely on the government. Granted, you're lucky to get over 2% interest from a savings account whereas social security can be up to 6.9%. Now add in the fact that the government keeps dipping in to social security to pay for other things and that it is mathematically flawed to begin with, that 2% interest rate starts to seem a lot nicer.

I'm not sure how we got into a war on drugs debate here, but I noticed you didn't want to touch on the DMV or using Public Defenders, I'll assume that you agree that those are horribly inefficient.

My question is this:

Are governments significantly less efficient than private bureaucracies?
Yes. They often are overstaffed and since they often do not face competition they are not only inefficient but arrogant, slow, rude, and just plain stupid.
My recent visit to the RMV here in MA getting my 16 year old his license is a perfect example. You wait for 3 times the time expected and printed on your ticket and then after sitting around for an hour and a half you are told the system for “new” licenses is “down” and you can come back. Took three visits to do what should have been done in 10 minuets and one visit. And this is no “huge” organization.

If so, how can you demonstrate this?
The “demonstration” is easy and evidence is everywhere and it involves more than just “doing a job” – it involves innovation, service, and other factors.

Take the post office. For decades that have had the monopoly on carrying mail and carried most packages until the 60s. The along comes Federal Express and UPS who literally bury them in speed, service and efficiency. They have never caught up and never will even though they are subsidized by their monopoly on “first class” mail and its ever rising rate.
Bureaucracy can be efficient (or not) depending on how it is managed and this is where government falls down. Management is usually mediocre and stagnant because the pressure to “do better or die” that is inherent in all competitive organizations is absent.

Another example:

"In 1993 a student at Brigham Young University and I
studied the water rates and policies of two private and
two public water companies operating in the Salt Lake
Valley of Utah (Hawkins, 1993). One of the objectives
of the study was to determine if public policy
discriminated against the private companies and thus
might account for

Holliday Water was established as a mutually-owned
company in the late nineteenth century, and in 1990
delivered water to 3,751 consumers in the southern part
of Salt Lake City. White City Water obtained water
rights and established a water delivery system in the
1940s to assist homebuyers in obtaining Federal Home
Administration and Veteran’s Administration loans. It
operated south of Salt Lake City in the area that is now
Sandy City, and in 1990 provided water to over 3,600
connections. At the time of the study about 50 percent
of the ownership control was held by one individual.
Sandy City Water was and is a municipal public utility
that sold water to over 20,000 connections in 1990. In
fact, Sandy City now completely surrounds the private
Holliday Water system."

"Salt Lake City Water incorporated as a public company
in 1876 and by 1990 had grown to over 80,000
connections. It sells water to Salt Lake City and a few
surrounding communities. It is a typically large and
public municipal water delivery company.

Table 1 gives the 1990 rate structure for these four
companies. The data show that the private
companies supplied water at lower rates than did
the public ones. Holliday had the lowest rates for
the first 5,900 gallons used, and thereafter on larger
blocks of water. In fact, the marginal rates on the
excess water over the minimum allowance were
lower for both of the private than for the public
companies. These data also indicate that both of
the public companies delivered water to their own
residents at far cheaper rates than were paid by their
customers living outside the city limits."

And……

"No efficiency comparisons between private and
public water companies would be meaningful
without analysis of the differences that confront
them in the regulatory environment. Indeed, it will
be shown that the explicit discrimination against the
private companies has been so severe in Utah that it
is a wonder that even one still exists".
http://ucowr.siu.edu/updates/pdf/V117_A6.pdf

More:

"You could also consider how textbooks cost $50 (to well over $150 for some college courses), with the excuse being that quantities are lower than mainstream books. However one-off printing at a professional "lean printer" like iUniverse, owned by Barnes and Noble, would be approximately $30 for the same size book, author royalties included. One at a time, delivered within a week.
Lean efforts in government are starting to yield results, especially in the military. But competition will always have an advantage in creating efficiency. "


http://www.evolvingexcellence.com/blog/200...te-efficie.html

http://www.evolvingexcellence.com/blog/200...sey-on-l-1.html




You lost me Joe. We discussed this in another thread and I pointed out the example of airline deregulation and other evidence to show the differences. You somehow did not consider this a “germane attempt to reply” or you just ignored it out of hand?

Actually that is a real life example. The problem with bureaucracy is competition, which translates to accountability. To give another example is the US Army. In my unit I have a supply sgt. She is the worse supply sgt. that I have ever seen .. ever. If she worked in a private company she would never make it. She orders the wrong thing, even after specifically writing notes of what is the right thing to order, the wrong thing comes in.

Why is she still there? She has no competition. There is no one applying for her job behind her. As long as things "sort of" get done she is ok.

That is how the govt. works, things "sort of" get done, they might get done eventually, it's not about size because Wal-Mart is much larger than many governments. It's about no competition. Government standards tend to be lower than private company standards no matter how large.

OK another example. I worked at a courthouse for the county. The person that was elected was great, she was a good boss and I really liked her. However hundreds of thousands of dollars were wasted because a much older system was still used at the courthouse. She did actually pull for a newer system but a few of the judges though they might be "inconvenienced" (the words they actually used) because of the newer system, because they didn't like reading things on the computer. Now if a company saw this they would immediately implement the newer system, but because the judges are elected no one ever finds out how much waste they really caused so they are re-elected and the cycle continues.

So perhaps you are correct, there are just to many people and not enough of them are closely watching the decision makers. That is how the govt. operates though.

I believe that it could operate extremely efficiently but at this point in time there is no system that can cover the voters to the small details of operating a large or small business that will out perform a profit based system.

Others have come close, but I don't think anyone has quite hit the nail on the head yet. Certainly competition and accountability play a role in why large private bureaucracies are better run than governments, but the main reason is surprisingly more simple.


Yes, governments are significantly less efficient than private bureaucracies. The real reason is that private corporations have a profit incentive to reduce costs as much as possible, whereas governments have no such incentive.

Perhaps the following demonstrates the difference.

Businesses are funded by two sources, investor capital and liabilities (debt). In both, there is an incentive to reduce excess cost, as one entails paying even more money, interest, for extra costs, or paying by ones own money. The government, on the other hand, gets its money from taxes (mostly), and really has no personal incentive to invest it efficiently.

When businesses do well and produce efficiently, they personally benefit from the reduced costs. Government officials rarely see the benefits of becoming more efficient, and thus, have no incentive to reduce excessive spending.

So, very simply, one has a profit motivation, the other does not. Anyone who watches wall street knows that the name of the game is net income (or EPS when divided by shares outstanding), and one excellent way to increase net income is by producing the same amount for less cost. Sure, this has caused corporations to artificially overstate their inventories, thus understating the cost of their goods, but most companies seek legitimate ways to reduce their costs.

We assume that in competitive economies corporations that become more efficient reduce their costs and survive, while inefficient businesses fail. But even in monopolies, there exists a profit incentive to cut the fat.

Its hard to demonstrate this principle directly because most of the time the private market and the government do completely different jobs. As Mrs. Pigpen has stated, its a little disingenuous to use a government funded corporation, for all the reasons she mentioned. I will say that the United States postal service is universally lauded as an inefficient organization. In fact, the USPS in 2001 hired FedEx to carry some of its urgent mail! We assume the USPS could not delivery it with the same speed, and efficiency, as FedEx.
USPS MAIL

The company I am currently working for recently implemented a new system for tracking all of its candidates for contract or employment work. This company has thousands of employees worldwide...

You know what, the senior managers refuse to use it, because it "inconveniences" them, leading to a tonne of extra work for others.

What does this tell us? That anecdotes are perfectly useless unless they are backed up by some sort of empirical evidence.



Perhaps I was a bit strong in my characterization. However, your airline example only demonstrated that deregulation CAN lead to greater efficiency. Nobody is disputing that...



This is hogwash. Yes, it's true that a manager is shielded from from the people who have an incentive to drive efficiency (elected officials), but the same is true in ANY equally large organization... When you read about a failing corporation handing out a massive bonus to a CEO what do you suppose that it is you are seeing?

The profit motive is no panacea; while it can reduce costs, it can also decrease "efficiency" by creating an overhead for a service which does not otherwise exist.

So wait, its hogwash, even though it does reduce costs?

I'm not precisely sure what you mean by this. A service which does not otherwise exist?

I also do not understand what your trying to convey here either.

I think your agreeing with me that "managers" of public projects do not have an incentive to drive efficiency (and elected officials do? Thats a stretch, reminds me of the infamous bridge to nowhere).

From there, I don't understand precisely what you are comparing "managers" and "elected officials" to. Who are the managers and elected officials of a private corporation?

Example? I assume that if corporations survive to become big, like Dow 30 big, they don't fail that often. And when they do, handing out millions is the exception rather than the rule.

You forget that most of the time, CEO's are compensated with stock and stock options, which are directly tied to the profitably (and thus, efficiency. Profit comes from the maximizing of revenue and the minimizing of costs and expenses) of the business. As the business fails, they personally lose.

You will also notice that paying CEOs in stock gives them a vest interest in maximizing the efficiency of the business, as an increased net income (Revenue- expenses) directly benefits them in the form of capital gains or dividends.

To clarify, you agree with me that if someone has a personal interest to increase efficiency, they are more likely to do so than someone with no such incentive?

I was thinking about the stock options myself. Does the company actually lose anything when it issues stock options rather than cash bonuses? I'm not sure it does. When the company goes public, it receives money for the issued shares and then they are traded. I don't imagine a CEO's options would make much difference (if any) to the bottom line. Curious if anyone knows the answer to that one.

Although when comparing that CEO who makes 20 million a year to a General in the military (for instance) with the same level of responsibility who makes one percent of that it does seem the government saves money on the highest salaries....

Ok and as in my other examples including the Post Office etc. Please show me ONE government bureaucracy that can and has successfully competed in the free market. LOL



This is hogwash. Yes, it's true that a manager is shielded from from the people who have an incentive to drive efficiency (elected officials), but the same is true in ANY equally large organization... When you read about a failing corporation handing out a massive bonus to a CEO what do you suppose that it is you are seeing?

The profit motive is no panacea; while it can reduce costs, it can also decrease "efficiency" by creating an overhead for a service which does not otherwise exist.



Come on please. The big stupid orgs. Like the Post Office would be out of business in a year if they had to compete and you know it.

Sure there are stupid corporations and if they have good competition they are dead in a few years – meanwhile big stupid inefficient government go on and on..........

Your demand is unfounded. A government is to care for its people (and sometimes everyone whatever nationality if you look at the Scandinavian countries), not to "compete in the free market". Compete how? What do you mean? They are to supply the best education they can for all its citizens whatever background, I can mention some nations that do this.

I doubt a "private school" would be able to compete with that, do you know why? Because its only for the privileged (i.e, the ones paying for it). The U.S School System is horrid, we know this, but you also need to understand that your country is not the only ocuntry in the world, and that there are countries with very very good public school systems.

Just because the U.S fails, does not mean the rest of the world also do. Dont forget that Ted.




I can mention atleast a dozen Monopolized businesses in several countries that give superb service only dreamt about in the "free market" cliché. I can also show what happened to the British Railroad when it got privatized, and then use the Scandinavian countries (amazing countries) as an example of how "horrid" the monopolized system is, especially when the train comes exact on time.

I can complain about public healthcare here in New Zealand if I want, but this does not change the fact that its "not always like that".

?


In your country the “government” may not do much. Here it does a lot. And when I say "government” I mean federal, state and local. In the US many states no longer fix their roads and many other services. They find they can do it faster and cheaper by “privatizing” it or contracting it out to private companies that have to compete for the contract.

In the US with have the Postal Service USPS – one of the most inefficient stupid bureaucracies every created by man (except maybe the Registry of Motor Vehicles). This organization has the monopoly on “fist class” mail – otherwise private companies like FEDX and UPS would do to them in this area what they did to them in packages.

Get it now?

There is a place for government monopolies – unfortunately in this country we have far to much of it.




At what cost? Could the “service” be better done by private companies. Before you say “no” realize you have no way to verify that statement.

Then you admit its your country, and not an absolute. Thats all i wanted to know Ted.



Indeed. I never post anything from the U.S using the normal post office. But the strange thing is Ted, why dony you do anything about it? Its your money Ted. Why dont you demand that your tax money goes to a proper high quality Postal Service? Are you not part of the country? Or is the U.S Government space aliens the the actual people (which comprise the country) cant do anything?



So you do admit then, that if there is a proper government (according to you the U.S government is incompetent), it is a very good thing? Perhaps the more selecive things such as Alcohol, Tobacco and Firearms should be in government control to make sure the minimum affect of alcoholics, gun-violence and drug use?



Im curious Ted, why is it on my shoulder to prove a negative? What do you base your belief that a private railroad is better then a state-owned one? There is corruption everywhere Ted, can you imagine a government thats not corrupted instead of talking about the one you live under?

I'll take a shot at answering that one. Whether or not a stock option costs a company money depends entirely on the performance of the company for the duration of the option. If the company's performance is good and the stock price for that company goes up, the option to purchase that stock at a lower price is worth something and it costs the company money. They either have to honor the option and sell their some of their own stock to the person with the option at a below market price, or more often than not, retain the stock and pay the difference between the market price and the option price to the person. If the company has not performed well and it's stock price is at or below the option price, the option is effectively worthless, most likely wouldn't be exercised and the option would cost nothing to the company. It's kind of like the executive version of a commission paid to a salesman based on their performance


Aquilla.

I mentioned this in my first post but no one has run with it--social engineering.

In the US, the govt is often the employer of last resort. It is the first to hire the "oppressed, the downtrodden, the huddled masses yearning to breathe free". In short, the govt is used as a social experiment and as a social welfare delivery device. This creates, as you can imagine, a huge sacrifice in efficiency.

Tax structures and allocation of tax dollars impacts things as well.

I chuckle at our friend from New Zealand and his discussion of Scandanavian railroads. European rail in many nations is quite good. The USA has limited passenger rail, and what it has is often not on time. As a railfan of long standing, I can address this.

In Europe, a conscious decision was made to have govt owned and subsidized passenger rail. The Europeans on average spend nearly twice as much per passenger mile on their rail compared to Amtrak. It runs well, but costs a fortune in tax-susidized cost. Amtrak is subsidized, too, but at a much lower level. We prefer not to hose our taxpayers. Amtrak, then, is in reality much more efficient--cost per mile--than the Europeans, but it is not as good, either. And, by private standards, it is not that efficient. Union Pacific could do it all much, much better, but they make real money on freight and prefer not to lose their shirts competing with government favored air travel and interstate highway auto travel.

Amtrak runs very cheaply per passenger mile; it has no dedicated right of way, but pays a fee to the big private freight carriers to use theirs, and as a result always takes a back seat in schedules to the freight trains. Amtrak is therefore rarely on time, and its consists are not usually as nice as the heavily tax-subsidized European trains.

The US years ago elected to favor air (and auto) travel, at every level of govt, and we had great domestic travel until 9-11. We do not compete in the hi-lux air travel market, as the Europeans and Asians spend much, much more on their state-owned airlines and their taxes prove it. Our private airlines again are much cheaper per passenger mile, which is the American way--efficient. We are the only major nation not to have a state-owned airline.

If we elected to have the insane taxes that the Scandanavians pay, we could certainly upgrade trains and planes. We may get that, of course, as Americans are demanding more and more, ah "free", services from their govts.

.

Well James I cannot speak for your country but we can easily look at the ultimate in government control – Socialism. A totally failed 90 year disaster that along with sister philosophy Communism was reaponsible for the deaths of say – 80 Million people.




Tou are a dreamer James. People HAVE complained about big stupid buracracies for decades and they get squat – and that is the problem – you cannot “vote with your feet” or money and take your business elsewhere – thay is why they are BAD.

As soon as packages were open for other carriers UPS and FEDX took (and still have) over 90% of the business – this tell you anything James?


Alcohol Tobacco and Firearms is a government agency in charge of over seeing the industries and they do a mediocre job – at best.

And no as above I don’t believe any government can necessarily do “better” than a competitive market. They may do as well – maybe. Haven’t seen it yet here.



Wonderful James – enjoy your government services – this thread I presumed was about the US - amybe I am wrong on that.

Again my point is you have no way to prove (with n competition) that a “service” provided by the government could not be done “better” privately. In the US the government does not often “compete” with the private sector often and when they do they lose as I posted above James.

Well, i have never seen a communist state so far. As there has never been one. There has been some with limited communistic ideals making sure the citizens have what they need, but never Communism.

Socialism is bad? *Confused*. I visited Denmark and Sweden not to long ago Ted. They seemed to have it very nice indeed Ted. Maybe we should ask Moif about the rampant poverty he was in his country. Personally, i saw one bum in central Copenhagen, and none when i visited Sweden. But i guess you know best Ted. Does poor Socialist have it so bad.


We have a pretty mixed system, and we seem to manage quite well if i say so myself. But Scandinavia is without a doubt the perfect example of a socialist society and the glories they managed, it is quite impressive, but maybe you never seen it Ted.



Also, im confused why Communism has anything to do with this topic, as well as the fact that no Comunist State i know of ever existed. Cuba was a very socialistic state, and before the American embargo, Cuba was a very wealthy nation, but you would not know anything about that, would you Ted. (It was the U.S who made Cuba what it is today, before their 'anger' the Cuban people had it quite well thankyouverymuch).

And on that not, What about Canada? The poverty is obviously rampant in that Socialist country to, violence is everywhere, bums trying to steal your car, oh gosh its horrid.

.


What has Socialism to do with Denmark James? Do you know what Socialism is? The Socialistic countries are not “Socialist” they just have social democratic governments – noted for high taxes, unemployment and lower productivity. But many love them and I say – knock yourself out – Denmark and Norway are nice countries.




I have and it is not “Socialist” James unless you are going to tell me the government runs all the private companies which I know is not the fact.



The “embargo” has squat to do with Cuba that trades with the entire world except the US. It is a Socialist hell hole and this is right where Venezuela is heading. You apparently do no know squat about Cuba James.

wonderful James – enjoy your government services – this thread I presumed was about the US - amybe I am wrong on that.

Nothing in the introductory post says (or even implies) that is a discussion of the United States... in fact I even used the word "governments" in plural specifically.

Coming on this late, but good posts. Is there such a thing as on an equally large organization to the government? The US budget is $2.3 trillion annually. I don't know of a company with a tenth of that annual buying power.

UJ - you've posed this question before and I have the same answer now as I did then.

I think that the biggest piece of empirical evidence of the overall value of privitization is the Cold War. Nothing proves the inefficiency of government than the examples of state-run well, everything in the Soviet Union. Now you could argue that it was a function of size and that is partially true. But each department(aside from the military) was not that much larger than your average American company. Who had the better services and goods?

Some of my posts above show that on the smaller scale it can be shown that government is not as effieient as private industry. Clearly those cities and towns and states that “privatize” activities like road repair do it for good reasons.

http://www.americasdebate.com/forums/index...=15669&st=0
Near the bottom of page 1.


Thus the question can be looked at, at different levels and imo the result is nearly always the same – private beats government run every time.

Even “regulated by government” industries take on the inefficiency of government organizations – the airlines are a perfect example. When regulated the airlines would go to government for fare increases (with books open) nearly every year.

A year after deregulation fare prices had dropped an average of over 40%! It is estimated this has has saved consumers over 3 billion/year even since.

No ted- it most certainly DOES NOT beat "goverment every time"- when you are talking size vs size. In fact, I would say, in big business, it is frequently far, far far more inefficient than goverment, and, through corruption, maintains it's inefficiency THROUGH goverment on occasion.

We mentioned the post office- there is not one private organization that does even half as much even close to as efficient as the USPS- I really, really hate having to pay for delivery for Fed Ex, UPS or DHL for ANYTHING to or from Alaska- some companies have a "hand in glove" policy with those companies, and refuse to ship through USPS- which, offeres better service, just as fast, but cheaper! A set of two tires from Arizona costs 83 dollars via Fed Ex, to be here in less than 7 days- USPS charges 40 dollars for the same exact service. But my tire company has a 'deal" with fed ex- and, since the overall price of the tire is so much cheaper- I have to swallow the shipping. The savings would be far more significant if he didn't have a contract with Fed Ex!

Also- I ship to and from Russia- wont even TRY to use a private service there- it stinks. Takes just as much time, less gauruntee, and costs THREE TIMES more.

Okay- let's move along into big business, accountability and transparence.

Classic example is GM- if elected politicians were as incompetant as the board of directors of GM, we would have voted the bums out YEARS ago.

There is far, far, far more accountablity of an elected official- which has to explain his job, how well he did, and how much better he makes things every 2-4-6 years, depending on the office terms. Waggoner of GM writes his own ticket, answers to nobody, and has lost billions at this point- but is still in charge!

This is because the corrupt system of publicly held companies is completely corrupt in the American business structure.

Mrs P- BTW- the company often does lose millions, if not billions, of dollars to 'golden parachutes" that the CEO writes for himself- another analogy to congress, could you imagine the outrage if congress voted themselves 400% raises, every year, until the most senior congressman were making over 100 million dollars a year, PLUS all the "perks" that go along with it? What would happen to th congressman that voted to give every single member a corporate jet of thier own- to pay for thier "brilliant performance" (a performance review they write themselves, BTW-pure propaganda) -

so anyway- these CEOs often write into thier stock option "golden parachutes" SET AT A FIXED MINIMUM PRICE- for instance- if Waggoner was fired tomorow, and he had, for sake of argument and easy math- 100 stock options valued on the open market for 10 bucks each- they will frequently have a clause that forces the company to pay 12 bucks each for THIER shares, as a minimum.

When your corporation has the resources of all but the G-11 in size, when your corporate earnings are more than most countries in the world- you can afford to be corrupt from top to bottom, completely inefficient, and still survive. In fact, it, if anything, looks more and more like goverment than it does business on many levels.

As yourself- who, exactly, is Waggoner beholden to, - can or will he ever be voted out by a rank and file vote? nope, who is his boss? The "stockholders" you say? Sounds pretty on paper- but it is only true in theory- the CEO of a company GMs size is really shielded from any accountability, with the exception of the possible hostile takeover, which is very, very rare in a company that size.

And those that think that just because the stock price is going down, there will be a stockholder revolt is very, very mislead- anyone here ever heard of "selling short"?

There is a HUGE difference between a small to medium business, and a giant mega-corp-

hands down, a small or medium private company, not typically traded publically, or, if they do, it is non-voting stock, is very, very much more efficient than mega-corps.

When you are talking something the size of Walmart- you can do bad business, even break the law, kill poeple, do anything you want, and have no repurcussions at all, compared to goverment.

Union Carbide has basically murdered thousands and thousands of poeple- and not one board member ever even went to jail.

None of the crap that big business execs get away with can you get away with in public office, and even better- we don't pay elected officials anywhere NEAR as much as we do the Ken Lay's and Michael Milkens- who are actually REWARDED for thier criminal behavior- for instance- Micheal Milken came out of jail a billionare still- proving, crime, of course, does pay.

When you talk of a goverment the size of ours, that maintains the infrastructure and day to day running of goverment, of over 300 million poeple and a giant country geographically- I am quite confident no private enterprise in the world can do even near as good as a job.

I would agree, yes, some companies do better than goverment, when you compare apples to apples- but, I don't think it is inherently more efficient either-

because, quite frankly- big business can afford to be bad business for a long time, equally as long as goverment, before there is a revolution.

Are governments significantly less efficient than private bureaucracies?
Not that I've noticed. Of course in many cases that is because it's hard to determine where the private sector ends and the public sector begins. It seems in my area that for a long time there was a nice mix between the private and public with regard to our utility, PGE. Then some bright fellows in the government decided to implement a more thorough going free market privatization approach in our energy delivery system. Outfits like Enron came into the picture, squeezed us white and we suddenly had huge costs and rolling blackouts. So much for the efficiencies of the market. I think they have things more back into balance now.

The bureaucracy is expanding to meet the needs of the expanding bureaucracy?
Well a buddy of mine was doing some time in state prison and got to know some of the guards. He found out when there was extra money left over from their state allocation they always were able to find a creative way to soak it up. That doesn't necessarily make it less efficient than the private sector. I just figure folks like money and if you provide them an avenue for getting it whether its conning folks into buying insurance they don't need or whatever, people will work an angle. I think at least 1/2 the money devoted to advertising is pure con and mainly a waste of folks time.

I'm sort of bored with the public-private argument. They're pretty much intertwined, with one having a more generally personal emphasis and the other devoted to a more collective purpose. Distortions aside both reflect natural human tendencies, whether in a modern society or a simple paleolithic one. That's because we all have both a private and public identity. The effort should be to find the proper quality balance, not artificially have Yin at war with Yang.