Why Do We Need Government?

blog_pew_government_inefficient_wastefulGovernment is inefficient.  Government is bureaucratic.  Government is a parasite.  Government is wasteful.  Government is mindless and autocratic.  Government wastes our tax money.  Government is corrupt and politically immoral.  Government workers are uncreative.  Government workers are lazy.  Government workers are drones.  Government workers don’t care.  Government workers are stupid.  SO WHY DO WE NEED GOVERNMENT? 

My blog this week will be the first of two parts.  Part 1:  Why do we need government and next week Part 2:  Why do we need free enterprise? 

Yesterday, I was sitting in my dentist’s office when another client appeared and took a seat next to my wife.  He immediately started ranting about “Big Government” and how the government was ruining the country.  I listened to him politely for a few minutes and then “counter attacked.”  I said “We wouldn’t need government if the greedy people in business did what they were supposed to do.  We wouldn’t need government if all the citizens in this country treated each other with dignity and respect.  We wouldn’t need government if all the other nations in the world all did the right things and treated everyone everywhere with dignity and respect.”  Later on when leaving the office, Karen told me he was pleased that I agreed with him.  I wondered what “ghost” he was talking to.  I guess people see what they want to see.

“All things are subject to interpretation. Whichever interpretation prevails at a given time is a function of power and not truth.”   ― Friedrich Nietzsche

It is not unusual to hear someone railing about the government today.  Government has become a whipping boy for all the ills that seem to plague modern society.  I have worked in big business.  I have worked in small business in a privately owned construction firm.  I have worked for the past 29 years as a management consultant to corporations, non-profits and government enterprises.  As an Organization Development and Process Improvement consultant, my job is to look at how organizations can become more efficient and effective.  I have had a unique opportunity to witness the disabilities that afflict both government and private business.  Over the years, I have continually observed that the curse or bane of business is effectiveness, “that is doing the right things.”  While, the bane of government is efficiency, “that is doing things right.”  The ideal organization (that perhaps only exists in the abstract) is one that balances efficiency with effectiveness.  To use another metaphor, they are two sides of the same coin.  Herein lays the big dilemma.  How can we get any organization to balance the two when the incentives for accomplishing each are often diametrically opposite?

Businesses see their primary role as making a profit whereas governments see their primary role as protecting the public welfare.  (I will say more about the perils and pitfalls of business next week.)  For now, I would like to explore the reasons why so many people hate government.  Actually, it is one reason, multiplied about a million times per day.  The government is magnificently, awesomely, incredibly, monumentally, epically, colossally, monstrously, inefficient.  I have worked in city, county, region, state and federal government both as a consultant and as an employee.  In most cases, my job was to help improve things.  I was awed and appalled by the waste and inefficiency that I saw surrounding me.  If I had wanted to design a system to be inefficient, it would be difficult to beat the government.  Please understand, this is not to say that the government does not often provide good high quality services.  It often does.  Or that it does not provide good products.  It often does.  Sanitation departments, police departments, fire departments, forest services, park departments, libraries and education departments are run at least as effectively as they would be if in the hands of private business.  The problem is the costs and efficiency of said operations.  The formal definition of efficiency is that a situation can be called economically efficient if:

  1. No one can be made better off without making someone else worse off (commonly referred to as Pareto efficiency).
  2. No additional output can be obtained without increasing the amount of inputs.
  3. Production proceeds at the lowest possible per-unit cost.

Creativity and innovation are the sparkplugs that power productivity increases in the business world.  Unfortunately, governments (which are bureaucracies) are often antithetical to either creative endeavors or more innovative ideas.   This means that numbers 1, 2 and 3 above are generally held at a constant and little or no productivity is gained from the typical government bureaucracy.  Output is not increased for constant costs.  Unit costs are seldom lowered and politics (a disease of government) continually interferes with any optimization of Number 1. Technological changes have helped lower government costs in many areas but such changes are often introduced much later and more slowly than they would be in private industry.

Let’s take one example here to show what I mean.  We will use the education system in the USA to show the poor relationship between increased costs and improved productivity.  Here are the three key findings from a report titled “Return on Educational Investment, 2011.”  It was conducted by the Center for American Progress.  Their three key findings were:

  • Many school districts could boost student achievement without increasing spending if they used their money more productively.
  • Low productivity costs the nation’s school system as much as $175 billion a year
  • Without controls on how additional school dollars are spent, more education spending will not automatically improve student outcomes

From my experience, I would wager that a study on any area of government in the USA would come to the same three conclusions as it applies to employee or worker productivity instead of student productivity.  This is the bane of government.   It is grossly and almost criminally negligent in its inefficiency.

In times of heightened global competition, offshoring and outsourcing of jobs, downsizing of organizations, economic recession, flat or falling incomes, increased unemployment and fears of increased economic turmoil, it is easy to understand why government has become the whipping post for so many citizens.  The government worker who is “here to help” is a longstanding joke and always good for a laugh.  The government worker that wants to increase taxes to pay for things that many of us do not perceive as relevant to our lives becomes at best a pariah and at worse a loathed, despised and hated enemy.  To the latter people, “The government is here to help” is no joke.  Unfortunately, these problems lead many people to ignore both the good that government does and the reasons it is needed in the first place.

“There is nobody in this country who got rich on their own.  Nobody.  You built a factory out there – good for you.  But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea – God bless!  Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.” ― Elizabeth Warren

The role of public goods in the development of the USA is easy to overlook.  We take police departments and fire departments for granted, until we need them.  We scorn welfare and unemployment programs unless we become unemployed or in need of public assistance.  The famous individualist Ayn Rand received Social Security and other public benefits.

“In interview with Evva Pryror, a social worker and consultant to Miss Rand’s law firm of Ernst, Cane, Gitlin and Winick verified that on Miss Rand’s behalf she secured Rand’s Social Security and Medicare payments which Ayn received under the name of Ann O’Connor (husband Frank O’Connor).” Mark Frauenfelder

We ignore the sewer system until our sewer back up. We take our clean water for granted until there is a water shortage.  We take our safe airways and freeways for granted until there is an accident or other disaster.  We trust that our banks are safe and guaranteed secure by the Federal Government.  We rely on billions of dollars of research to fuel technology, industry and healthcare which come from federal taxes.  We trust that our nation will be protected from terrorism by our state and federal military.  We rely on government regulators to protect our food from pathogens and disease.  We expect the government to keep our borders secure.  We demand that government stop our businesses and industries from conducting themselves as monopolies.  Businesses decry government oversight unless it benefits their bottom line.  When all else fails, we all want a government handout.   Student loans, small business loans, and SSI are all deemed entitlement programs.  If you would like to see the entire list of government funded programs click on the hyperlink:  List of US Federal Government Funding ProgramsThere are 1607 programs on this list for a total of nearly 2 trillion dollars.  Some examples:

  • Adoption Assistance, $1,622,700,000 total funding
  • AmeriCorps, $272,752,000 total funding
  • Child and Adult Care Food Program, $1,856,368,000 total funding

If you are in favor of “Free Enterprise” you may wonder why so many private businesses receive vast amounts of public assistance.  Consider the following facts:

  • The Cato Institute estimates that the U.S. federal government spends $100 billion a year on corporate welfare. That’s an average of $870 for each one of America’s  115 million families. Cato  notes that this includes “cash payments to farmers and research funds to high-tech companies, as well as indirect subsidies, such as funding for overseas promotion of specific U.S. products and industries…It does not include tax preferences or trade restrictions.”
  • In addition to the federal subsidies, a New York Times  investigation found that states, counties and cities give up over $80 billion each year to companies, with beneficiaries coming from “virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains.”

http://www.alternet.org/economy/average-american-family-pays-6000-year-subsidies-big-business

Yes, let’s complain about the government unless we are on the receiving end of the benefits and largess.  I laugh when people talk about free enterprise and the American business system.  Scratch just slightly below the surface and you will not find a business small or large in this country which does not somehow benefit from a strong centralized government.  Could the government be more efficient?  Of course the answer is yes.  Could the government be more accountable?  The answer is also yes.

Could the government be run like a business?  The answer is absolutely not.  Never the twain shall meet and that is a good thing.  Business and government have different goals.  Remember the famous saying:  Quis custodiet ipsos custodes?   Translated this means, “Who guards the guardians.”   In a perfect world, we would not need guardians or any other gate keepers.  However, this is not and never will be a perfect world.  Governments exist to protect the public welfare, to insure a level playing field and to help provide and distribute equitably the basic necessities of life for all its members.   Toys R Us, American Airlines, Microsoft and General Motors do not have the same goals or responsibilities as the government.   Even in an ideal world, they would not have the same goals as the government.

“The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations.”   ― Thomas Jefferson

I am no different than the average American.   I am dismayed by our political system and I generally have a well-founded contempt for most politicians.  Unfortunately, just like somebody has to collect the garbage, somebody must run the government.   I have little doubt but that the people/citizens get the government they deserve.  Too lazy to vote!  Too lazy to watch the debates!  Too lazy to be informed about their choices!  Too lazy to actively participate in the political process!   Most Americans would rather tune into the football or basketball game then watch any show dealing with politics.  When was the last time, you went to a political rally or read up on a candidates record?  “Who guards the guardians?”  

The government is made up of two major parts.  The first of these parts includes the systems of policy, procedures, rules, regulations and administrative processes that comprise the backbone or structure of the government.  The second part includes the employees, managers, staff and politicians who run the government on a daily basis.  The quality of the government is dependent on the quality of these two parts.  Good people in a bad system = bad.  Bad people in a good system = bad.   We must have the best people we can hire in the best system we can create or we will not have a strong viable government.    Bureaucracy  1

Over the past twenty or so years, the quality of the two parts of the government seems to have deteriorated.   I have no doubt that the “public guardians” are responsible for this.  It is easy to blame the government but as POGO said “We have met the enemy and he is us.”  We are the government.  If the government is bad, it is because the public is not doing its job.  It is because the public is not “guarding” the process.  If the public would rather be entertained then when it gets stupid corrupt immoral politicians, it should not be surprised.  If the public will not pay decent salaries for government workers, it should not be surprised.  And if the public expects that it can just leave all the government to others to take care of, it should not be surprised.  It will get the government that it deserves.  Stupid, corrupt, inefficient and immoral!!!

Many people have noted that fundamental institutions in America seem to be under attack or in peril.  Education, public works, criminal justice, drug enforcement, immigration control and regulatory controls in many areas are not meeting the needs of a twenty first century nation.  Times change and systems must change.  We can no longer rely on systems and policies founded in the eighteenth and nineteen century to still be appropriate for the world today.  The Law of Entropy says that all systems will tend towards decline.  The only constant in the world is change.  We must develop the will power and determination to “change the things that need to be changed.”  The quote “Insanity is to keep doing the same things and expect different results” repeatedly comes to my mind.  We foolishly think that simply by throwing more money into outdated systems that they will somehow improve.  The only reality is as Einstein so astutely noted: 

We cannot solve our problems with the same thinking we used when we created them.”  — Albert Einstein   

As a consultant, I could make minor fixes to the systems I interacted with.  Major change is generally beyond any single consultant and requires total system commitment.  Furthermore, as Dr. W. E. Deming always said “Change comes from outside by invitation only.”  We will only be able to make major changes in government by a concerted desire from inside the system that is fueled by the creativity and innovative ideas that will need to come from outside the system by the entire citizenry.  No single person or groups of people can see the system in its entirety.  In order for change to occur, a systems overhaul must be taken according to the principles of systems thinking.  Like the story of the blind men and the elephant, it takes a variety of perspectives to see the truth.  The truth is that government inefficiency, political corruptness, employee laxity and bureaucratic inertia can be fixed.  The sad part is that the public would rather leave it up to the foxes to watch the chickens.  The weekly NFL game or NASCAR race is more important than who is running the government.

“One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors.”  — Plato

Time for Questions:

What do you think of government?  What do you want its role to be?  Are you satisfied with the government today?  Why or why not?  What do you think you could do to help improve government?  Do you stand up for what you believe by voting and taking an active interest in politics?  Or do you just leave governing to others?  Who should make sure government is doing its job?

Life is just beginning. 

 

Advertisements

9 Comments (+add yours?)

  1. Bruce Galbreath
    Mar 05, 2014 @ 13:24:44

    You say that business’ end in view is to make a profit, and government’s purpose is to serve the public interest. That is true on paper, but in practice both claims are false, or at least nearly so. Some few at the top of both structures can see what they are doing as the pursuit of those goals, but for both private and public sector, 99.9% are concerned with keeping their jobs or maybe climbing a little higher in the structure. There is a tremendous bureaucratic drag in both arenas, hobbling innovation and change no matter what the “big thinkers” come up with. I think what distinguishes private enterprise from public enterprise and so-called “public-private partnerships” is that only the first of the three is exposed to the possibility of failure. The first sort of organization must find some activity that makes a profit (or at least generates sufficient cash-flow), that more than pays for the cost of its own production, or it will disappear through bankruptcy or failure. What the people who operate the private enterprise think they are doing is secondary to that objective rule, the discipline of the market. Any other sort of activity, be it purely governmental or by a “private” company that has access to government funding, will know that “success” of a sort is secured and people involved will inevitably slack off (unless they are one of the rare saints that turn up now and then). Ordinary individuals, without the awful chance of failure staring in them in the face, will find their motivation sapped by the prospect of easy access to a safety net. This is what makes public and public-private organizations inefficient and too slow to adopt innovations.

    I read just this morning the claim that the per capita expenditure by the D.C. Public schools system is $29 K per student, with measurable results of all sorts declining as the spending has gone up over the years. I suppose the challenges that kids present to the system nowadays may be so much more severe than they used to be and that justifies these much larger costs. Yet it strikes me as ironic that a system that justifies almost everything as “for the children” implicitly slanders those very same children by holding them to be such dysfunctional monsters that only massive per student expenditures can keep them even close to keeping pace to earlier generations.

    You list a number of important things that we rely upon the government to provide or secure. These are important things, so important that we are foolish to rely on such an inefficient means to them. When times get tough, we turn to the supposed safety net that government has waiting for us. I worked in the Unemployment Insurance program of a very small, very caring, liberal state for about 30 years (Vermont). As a former insider to that system, I was shocked to see how many people failed to get help in their time of need. There are a lot of quirky rules and regulations, and the result is that only about 30-40% of people who experience job loss actually get to collect UI benefits. Welfare is a similar thicket of pitfalls, where cases that look very similar to the casual observer get completely different treatment. The justice system is similar in that having a good case and being in the right does not reliably determine the outcome. People who can turn to non-public alternatives: private schools, personal savings for times of trouble, private mediators rather than public courts. Privatization has its own pitfalls, of course. Nothing is perfect. But government sometimes functions as an inescapable monopoly that gives you unsatisfactory services, that you must pay for whether it serves you well or not, and which can raise its fees whenever it wants and as high as it wants and seize your property and even put you in jail if you try to avoid it. Private enterprises (ideally at least) try to differentiate themselves from competitors and to give you a better choice than their rivals. Most of government operates on a “take it or leave it” basis.

    I agree that almost every supposedly private business depends on government, not just for infrastructure and rule of law, but for actual subsidies and preferences of one sort or another. I think this, in general, is bad for both government and business. You say they should be separate, that “never the twain should meet”, and I agree. In fact, I think we need something strong, like the principle of the separation of church and state. Government should not favor one religion over the others, and it should not favor one corporation or business sector over the others. It should act as a neutral, disinterested umpire, and not join one of the teams competing against the others.

    You call upon “the people” to exercise their function of guarding the guardians, and criticize us for preferring entertainment such as sports instead. You are right, but imagine that a lot of us did try to take our responsibilities seriously. There is still the problem that, in a conflict of interests, a more compact yet motivated party can outweigh a much larger but less resolutely focused party. Government today is a vast resource of special benefits to narrow segments of our society, and the lobbyists, activists, and theoreticians who are devoted to preserving and expanding those benefits will always win out against concerned citizens who have lives that include other things to do. The sharks will eat the minnows every time. The minnows can chip in and hire their own sharks, I suppose, but the odds are that those sharks will pursue their own interests rather than those of their patrons if it comes to a conflict. The only answer that occurs to me is to somehow cut the size and reach of government to the point where it no longer is a cornucopia of opportunities to those who seek special privileges. How, concretely to do that, I have no idea. What I expect will happen is that we will blunder along with massively excessive government commitments to a thousand causes, each arguably good in its own terms, until the money runs out and we can no longer find lenders to finance our spending. Then we will have a disorderly downsizing of government across the board. We will have to set priorities, and I hope we will choose wisely and focus on the things that we need government to do that only it can do. But short of that wrenching catastrophe, I don’t see any smoother way out.

    Reply

    • johnpersico
      Mar 05, 2014 @ 23:30:09

      Great comments Bruce, I think there are two ways in which we disagree. Having worked in both the private sector and public sector as well as having consulted extensively in both, I find that I would not trust either to do their jobs. Both need controls, meaning both need each other. I also believe optimistically in the ability of people to exert control over both sectors if they can get the desire. I think the TEA Party and Occupy Movement both show that people have the desire but they need more than desire, they need to truly be informed and they seem to ignore this critical element. A democracy of idiots is an oxymoron. Nevertheless, you may be right. Perhaps, I am too optimistic but optimists tend to be happier than pessimists, of course, pessimists live longer. Thanks again for the great comments and insights.

      Reply

  2. Greg Gorman
    Mar 05, 2014 @ 16:35:13

    Bravo! I am completely enthralled by your ability to deconstruct this complex and troubling environment.

    Reply

  3. johnpersico
    Mar 09, 2014 @ 23:06:41

    Boetcker’s “Seven National Crimes”:
    I don’t think.
    I don’t know.
    I don’t care.
    I am too busy.
    I leave well enough alone.
    I have no time to read and find out.
    I am not interested.

    Reply

  4. open home registry
    Apr 14, 2014 @ 19:38:29

    Marvelous, what a website it is! This weblog presents useful data
    to us, keep it up.

    Reply

  5. days home
    Apr 15, 2014 @ 16:14:21

    This piece of writing will assist the internet
    users for creating new webpage or even a blog from start to end.

    Reply

  6. a
    Jun 21, 2014 @ 11:42:18

    If some one needs expert view concerning blogging and site-building then i suggest him/her to pay a
    quick visit this weblog, Keep up the fastidious job.

    Reply

  7. www.amazon.com
    Nov 05, 2014 @ 07:40:00

    Hi there, You’ve performed an incredible job. I’ll definitely digg it and individually suggest to my friends. I’m confident they will be benefited from this web site.

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: