Elon Musk has announced that he would like to serve in a Trump administration as the head of a newly-created Department of Government Efficiency which he labeled the D.O.G.E. Just what we need: A new federal bureaucracy. Former President Trump did convene such a “commission” during his presidency that turned out to be useless, but nevertheless responded that Musk’s suggestion was a great idea.
In reality, the phrase “government efficiency” is as much a contradiction in terms as say, “jumbo shrimp,” “double extra-large slim fit,” or “military intelligence.” It reminded me of how my friend and coauthor, Professor James Bennett of George Mason University and an adjunct scholar of the Heritage Foundation, was asked to be on the Reagan administration’s “government efficiency commission.” (Every administration has one). After many months of useless bureaucratic meetings Jim received in the mail a framed certificate of appreciation from the federal government and all the glass had been smashed to smithereens. “Typical of government efficiency,” I recall him saying.
Businessmen like Trump and Musk are always talking about making government more “business-like,” and an “efficiency commission” is always the first step. Put us in charge, they say, and government will become a smooth-running machine. (God help us if that were to be true). Efficient government is about as likely as making a cat bark like a dog or a dog meow like a cat. Government is inherently inefficient because of its very nature.
In the 1980s there were hundreds of academic studies comparing government and private provision of various services (Almost everything state and local governments do, for example, is also done by private, competitive businesses). One book of essays, Budgets and Bureaucrats, edited by Thomas Borcherding, concluded that whenever government took over a service from the private sector the costs immediately doubled, on average, while quality of service declined. In some cases the studies showed that costs increased more than tenfold.
There are myriad reasons for this. For one thing, since government “services” fool the public into thinking they are “free,” demand for them (if they are actually useful, which many are not) explodes while supply remains constant or declines. The result is shortages, always blamed on the stingy taxpaying public, not the state, accompanied by demands for higher taxes and bigger government budgets.
Even when governments do charge for “services,” the prices are arbitrary and not based on market reality but on the whims of bureaucrats. The result is the same: economic chaos, shortages, demands for more taxes.
Since governments – especially the imperious federal government – do not operate in a genuinely competitive market, consumers’ preferences are ignored and the whims and wishes of politicians and bureaucrats prevail instead. Every federal bureaucrat is a central planner, by definition, and there is no reason to believe that American central planners are any better at it than the Soviets were.
The notion of “business-like government” is especially nonsensical when one considers that government, unlike any business, can essentially obtain unlimited financial resources through taxation – forcing the public to pay rather than relying on pleasing its customers or convincing investors to invest. Organized crime is the only other institution that raises funds in that way. Unlike private businesses, even start-up costs are paid for by taxpayers.
With government, failure is success from a financial perspective. The worst services become, or if they disappear altogether, the answer is always more taxation and more funding, just the opposite of private, competitive businesses. With private competition poor customer service is penalized with losses or bankruptcy. With government it is financially rewarded with budget increases. After NASA blew up a space shuttle its budget was increased by 50 percent in the next budget year. In government, failure is success.
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From LRC, here.
