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.
Tax funding means that payment is not linked to quality or quantity of service, which is why government or “public” service is such an oxymoron. The power of the purse is constitutionally in the hands of the House of Representatives where the reelection rate over the past six decades has been 95 percent. The system is so rigged and gerrymandered that no member of Congress really has to be very concerned at all about “serving” his or her constituents for purposes of reelection. They are free to serve whatever special interests promise to lavish them with the most “campaign contributions,” the constituents be damned.
In government, bureaucrats do not invest in skills directed at serving customers but in political conniving, game playing, and manipulation of the public with lies and deceptions. As Murray Rothbard once said, a “master politician” is a masterful liar, conniver, and manipulator.
Since there are no profits and losses in an accounting sense in government, only budgets, profit sharing does not occur and is illegal. Government bureaucrats cannot bring home a share of the “profits,” but they can and do spend some percentage of their budgets on perquisites, especially a large staff. The top requirement for advancing to a bigger and better-paying job in government is having a “large” number of people working under you. The bigger the staff, the better is your case for getting that “bigger” job “managing” an even bigger horde of fellow bureaucrats – and at a higher pay grade. Thus, everything government does is overly labor intensive and costly. Government is a cost maximizer, not a cost minimizer as successful competitive businesses strive to be, with cost minimizing being the mirror image of profit maximization.
Because of civil service rules it is almost impossible to fire a poorly-performing – or catastrophically bumbling — government bureaucrat. Doing so is sure to lead to lawsuits by public employee unions with government agency managers being dragged into court for months or years. Instead, the biggest bumblers are bribed to leave by being offered bigger and better-paying jobs elsewhere. It is typical of urban public schools, for example, to take dysfunctional “teachers” out of the classroom and place them at higher salaries in the central administrative offices where they supposedly help to “administer” the entire school system!
At the end of every budget year every government bureaucracy goes on a spending binge with the objective of spending every last dime – on anything and everything. This occurs because every bureaucracy wants a bigger budget in the next budget year, and when it competes with other agencies for budget dollars its case before the appropriations committee will be impaired if it performed its functions this year with money left over. The Washington Post once published a long article about how there is probably enough office furniture stored in warehouses in the D.C. area to furnish all the rest of the offices in America because of decades of this spending-binge-at-the-end-of-every-budget-year game by every single federal agency – and there are hundreds, if not thousands of them.
Ludwig von Mises wrote in Bureaucracy that no one wants to be called a “bureaucrat” or his methods “bureaucratic.” Government bureaucrats understand this as much as anyone since they, after all, live it day in and day out. They, more than anyone else, understand what a scam and a farce it is to talk of “government efficiency.” Government efficiency commissions are therefore worse than useless: They present the public with a false pretense that government can be reformed in a way that would make it more “efficient.” But as Murray Rothbard once tellingly said, if “business-like government” is desirable, why go through all the rigamarole of commissions and “reforms” at all? Why not just privatize government bureaucracies and make them genuine private businesses? And then abolish all the rest. That is the only way to make government more efficient. An efficiency commission or a Department of Government Efficiency would just be another dodge.
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