Government is the problem, not the solution


Many people criticise the failings of government and, as a solution, propose more government. This is like trying to treat heart disease by making people eat more processed and sugary foods.

The fact is, the inefficiencies of government are features, not bugsie, they are built into the system. Yet one former government minister writes, ‘Many commentators distinguish between management in the private and public sectors. The distinction is false.’

This reveals his ignorance of over six decades of research in public choice theory (starting with James Buchanan and Gordon Tullock, who in 1986 received the Sveriges Riksbank Nobel Prize in Economics).

Put simply, the incentives in the public sector and the private sector are quite opposed. Public-service employees have no incentive to be productive, let alone innovative, since they receive their salaries no matter what, are almost impossible to fire, and are often even punished by not being promoted for trying to be more efficient.

Add to this the politicians’ perverse incentives to waste or even steal, and it becomes clear why government is the problem, not the solution.

The argument for more government also rests on the false premise that only government can supply certain goods and services (security, education, health, water, and electricity being the usual suspects).

Yet there is really no cogent argument why these cannot be supplied for a price by the private sector. In fact, the first three are also supplied, more efficiently and at less cost, by the private sector (less cost when one factors in cost per guard, student or patient in the public sector).

This is why calls to ‘fix’ government are both ignorant and futile. The only real solution for our country is to reduce the size and power of government as much as possible.

Elton Singh