Debunking Free Market Myth #3

Government run things are bad. Somewhere along the line, we got into the mode of thinking that the government cannot run anything efficiently. Well, this is true; anyone who works for (or has worked for) a corporation that is larger than 200 employees knows bureaucracy inevitably becomes irrational as it gets larger and more complex. So, yes...the government cannot run things efficiently and will likely be wasteful in many respects.

Does this mean government run things are bad? Sometimes yes, and sometimes no. The post office, for example, is a government run service. It is neither a good or bad service. My mail tends to make it out and arrive nearly every time; the mailman never misses a pickup since I can remember; the cost is relatively low considering the alternatives; and most importantly, this large cheap service has not put the kibosh on capitalist competition: FedEx and UPS are quite strong, and there are a million little companies like DHL that specialize in delivery. So, it is really difficult to use this line of argument.

Here is why government run operations become bad. Reason 1: they hire out. The Republicans, trying to implement a market model for war, decided to hire contractors at the beginning of the Iraq war for driving, security, etc. Of course, not following the market model, they avoided a true bidding system and essentially gave sweetheart deals to their close friends (Halliburton anyone?). The result was (a) corruption and a serious loss of government money, (b) no oversight in a foreign country, and (c) the same inefficiencies with even less accountability.

Reason 2: lobbyists. Its one thing to decide to lower costs for senior citizens on their prescription drugs; its a whole other thing to pass legislation meant to provide this lower cost by having a government agency buy the drugs at a high price, with no bidding, from select pharmaceutical companies. You cannot have a government run program that lacks autonomy from economic influences at that level and expect it to do what it is supposed to do.

Reason 3: lack of vision. The health care bill, albeit an important bill that can be amended in the future, is going to watered down so much that it might not even do what it was originally meant to do: lower costs. A true public option is the key, says the CBO (the non-partisan accounting agency that analyzes bills), to promoting competition, ensuring low prices, and keeping insurance companies in check. We will likely get a kicker in the final bill that triggers a public option in five years if the nothing changes, but why wait? No one, except those getting money from the insurance or health industry, likes insurance companies...ask yourself, do you like the way you have been paying absurd prices for car, health, or any other insurance? Or, if you've made a claim, the company treats you terribly as they attempt to not pay you a sliver of what you have paid them? Of course not! So, why don't we just get the punishment over with and move on?

Why are government services good? First, they are not about profit. Health and education, especially, should never be "for profit" services. I am fine with private options (e.g., personal doctors, private schools), but I am  not fine with public schools having to secure funding when the state decides the money we are spending on stupid wars is more important than educating our youth. Second, despite the bogeyman conspiracy theorists and the Rush's of the world, most government services are well intentioned. Medicare, social security, and welfare all are meant to provide a safety net to people in society; a society that could not exist without all of its members contributing. Why should a person work 40 years for a shitty company who reaps profits from his blood and sweat, and then retire and have no protection from the society he just served for so long? Why should a child be born into poverty -- not choosing this life -- and not have equal opportunities to succeed as those born into affluence? These programs are meant to help people out (60% of Americans will use government money in welfare or unemployment benefits once in the lives...so, it isn't just crack whores trying to be free riders on the system). Third, the alternatives are terrible. California deregulated its energy years ago and started buying from random people (thanks Enron!). What we got out of that was this: rolling brown outs meant to threaten the population and government into higher costs, higher costs from corporations trying to squeeze us, and a basic need (heat, electricity) turned into a commodity whose cost affected people's budgets. The market is not always a free market; monopolies exist (Microsoft; insurance; airlines; gasoline; media), not in the purest sense of a single dominant company, but in the sense of oligarchies. Governments should and do force companies to play fairly. In the gilded age (the 1880's-early 1900's), the people we called the Captains of Industry were simply monopolists who made so much money off the sweat of non-union labor at a fraction of the cost of wages. They were ruthless, cruel, and have become revered because they donated a proportion of their money (Carnegie anyone) making them seem good. Let's face it: free market is code for exploitation, unregulated business ethics, and making shitloads of money and running. How many examples do people need before we realize that a pure economic theory doesn't work in the real world, much like gravity doesn't act the same in practice as it does in a vacuum (hey, throw a cannonball and a feather out of a window, they should both land at the same time). Here are some reminders: the Savings and Loan disaster in the late 80s; Bernie Madoff; Enron and Tyco; the Captains of Industry; the Great Depression; the railroads; the money it costs to put your bag on an airplane combined with the decline of service on every airline; carpetbaggers during the early 1800s; slavery.

All "isms" are what they are: ideologies which orient our attitudes and actions in ways that make sense of the world, events, behavior, etc. They are rarely true in an objective empirical sense, but they do guide us. Socialism, in its purest form, is good; when humans implement it, it has the potential to be very bad (Nazism); Capitalism in its purest form is good; when humans implement it, it often goes awry. The government, for better or for worse, is the corporation "for the people," and should try to at least speak for those of us who cannot do much against the large machinary of capitalist bureaucracy. I prefer no "isms." Take what works and integrate it; isms produce dogma, self-righteousness, and resistance to compromise. Orthodoxy is rigid, and often collapses in the face of environmental changes.