Why Government is Inefficient

Empirically it is true that government is one big wasteful program and inefficient at getting stuff done either by wasting a lot of money or being extremely slow at what it does. We should ask ourselves the question "why is government inefficient?". Here are six reasons why government is inefficient. These are ideas that come from economists that I read and learned from, none of these are my own thoughts, I am just organizing of all these ideas into a single post.

Four Ways to Spend Money: In the spirit of the weekly Pirkei Avos, there are four ways to spend money. One who spends his own money on himself, is a normal person. One who spends his own money on someone else, is a charitable person. One who spends someone else's money on himself, is a thief. One who spends someone else's money on someone else, is a politician. These four cases are listed in order of how responsibly the money is being spend. The normal person is very careful with his money, he is spending his own money, so he is careful how much he uses, and he is careful how he uses it because it is on himself. The charitable person is not as careful with his money but still careful, he is careful in how much he spends, but not as careful as he spends that money, because that money is going on someone else, and he does not know somone else's preferences as well as he knows his own. The thief is even less careful. The thief is not careful in how much he spends because it is after all not his own money. However, the thief is careful in how he spends the money because he is spending it on himself. And finally there is the politician. The politician is the least responsible out of all these four. The politician is not careful in how much money he takes because it is not his own money, and he is certainly not careful in how that money is being spend because he is spending it on others. The government is both a thief and a politician. It sometimes spends money on itself and sometimes it spends money on others. The money the government spends on itself is used a little more responsibly than when it spends it on others. But the result is that government, for this reason alone, cannot be responsible in how much money it spends and how it spends it. The government is even more irresponsible in its spending habits than a thief. Which is why the government is inefficient in how it takes and spends money.

Private Property Ownership: No one every looks out after property as well as the owner. The owner feels a need for his property to stay in good shape, it is his after all. Property in a way is the extension of the body, people care for their bodies, and likewise care for their property. Government property has no real owners, it is for the public with an agency that "takes care" of the property. It is not a surprise, then, why private bathrooms are almost always better looking than public bathrooms. The owner of private bathrooms feels bothered when they are in bad shape, just like he would feel bothered if his own clothes were not ironed. The government is not a person and it cannot feel this desire to look out after property. Compare a social security office or the DMV to a Casino in Atlantic City or Las Vegas. Casinos are private property and they look awesome, the government buildings are rather boring in their appearance. Which is why the government has no desire to efficiently look out after their property.

Profit Motive: Private companies run on the profit motive. I know that the word "profit" is a dirty word for a lot of people, and some consider profit as a form of exploitation, but we cannot deny the fact that it is the profit motive that drives innovation and entrepreneurship. Companies want to make as much profit as they can. They can satisfy their profit hunger in two ways. One is by lying, cheating, and stealing. The other is by making their consumers happy. The first method is illegal and it is not sustainable well in the market because the consumers are unhappy. So most companies just have essentially only one way to satisfy their profit hunger, and that is by making their consumers happier. This is precisely way the line moves so fast in Casinos and so slow in the DMV or the post office or the social security office. Casinos do not want to make people angrier because otherwise they get less tourism. Less tourism means less money on gambling, less gambling means less profit. So Casinos, without even giving much care for their consumers, are guided by the invisible hand to make the Casino experience more enjoyable to their consumers. This includes making the lines move fast for hotel registration. The DMV or the social security center is not working for profit, they receive money from taxes, so they have no incentive to improve or innovate. Which is why the government have no incentive to improve efficiency.

Lack of Accountability: I know most people switch it around and say that business is not accountable while government is. But they got the whole thing backwards! Businesses are most certainly accountable. They are accountable to two forces, they are accountable to the government and mainly to the people. A car company that produces garbage cars may get sued by the people for its terrible product. If a car company sells you a car and forgets to put in there the engine you can sue them and win the money back. The company is accountable to the law. Mainly this car company is accountable to the people. The car company is only in existence because the money they get come from the people. If people do not like it, it will not live. The government has a lack of accountable. I will not say it has no accountability, but it has a lack of it, to some degree it is not responsible. Because if the government messes up who is it accountable to? Who will judge the judge? Who will watch the watchers? Throughout history governments have demonstrated that they are willing to violate its own laws when it becomes convenient to them. Furthermore, the government has lack of accountability to the people. If people are not satisfied with the government they cannot stop paying taxes. They must continue to pay. So the government still stays in place. The government does not have the same fear as a car company would have in the market. Which is why the government can be a lot more inefficient without as much worry as a business in the market.

Competition: We all know from basic economics that monopolies (legal) do not operate as efficiently as a competitive market. Competition is a violent destructive process that drives out the less efficient companies from the market, it rewards the ones who are more efficient. But even monopolies are still controlled by basic economics such as supply and demand. They are accountable and they have a profit motive. They are just protected from competition. Government is a monopoly. No one else is allowed to compete for what they do, because if you do, they will kill or imprison you. Government is actually worse than a monopoly, it is a coercive monopoly. And it is therefore protected from competition. It does not have the fear that competition will kill it. It does not have the fear that the people might go somewhere else. Which is why the government can be inefficient without being destroyed by the competitive process in the market.

Stupidity Beyond Stupidity: Let us suppose that there is a government program which is actually efficient. I have no idea how but let us suppose that there is such a program. Take for example public "education". There are various public schools. And let us suppose that one public school is actually a great school to send your kids. If this school is doing very well what will happen is that the government will cut their spending on this school. The government will think that this school is doing well so we can cut the spending. And they will redirect that spending in some failing school. The reasoning process that the government takes is that the good schools can receive less money and the failing schools should receive more money so they stop failing. This is stupidity even beyond those people who brought themselves a ShamWow. In the free market businesses that do well grow in size and businesses that fall back die out from the market. The government does everything backwards. Which is why government can be inefficient by sustaining its inefficiency over efficiency.

The point of all of this is that it is not the Democrats to blame or the Republicans, or even the president. It is the way the system operates as a whole where the problem is. We should stop looking for scapegoats and notice that the problems emerge from the nature of this beast. I can guarantee you that if a private company was able to spend money without any worry, have no profit motive, be protected from competition, have lack of accountability, then this company would be just as inefficient as government programs. It is not that government is bad and business is good. Rather it is that the methods the government operates by are innately inefficient which is why it is so inefficient. Private entities do not operate by these methods which is why they are for the most part much more efficient than government programs. The point is that Republicans or Democrats are not going to make anything better as long as this beast operates the way it does. We need to change our fundamental notions of how government operates if we want to improve efficiency.