While some believe that government is the best provider of services, John Stossel, in the following article, shows us that this is not always the case. In fact, it is rare that government is able to do a better job at lower cost than the private sector.
One motivating factor that private business has that government does not is profit. Liberals view profit as an extra expense that must be paid to private sector businesses. They say that profit is a cost that can be avoided if government — which has no need for profit — provides a service.
But as Stossel explains, profit is a powerful motivating factor. It makes private businesses provide products and services that people want, and efficiently, too: “Because if private companies don’t do things efficiently, they lose money and die. Unlike government, they cannot compel payment through the power to tax.”
We hear, as we do in Wichita now, that government should be operated more like a business. Our city manager speaks of a business model he is developing. But it is folly to speak of operating government like a business. The goal of business is profit — the signal that the business is providing things that customers value.
But government, as Mises and others have shown, has no ability to calculate profit. It can’t be guided by the same signals that guide the private sector.
Even streets and highways could be provided in a better way than government does, as Stossel explains.
Private Enterprise Does It Better
Why freedom and responsibility triumph over regulation and central planning
By John Stossel
In Myths, Lies and Downright Stupidity, I bet my readers $1,000 that they couldn’t name one thing that government does better than the private sector.
I am yet to pay.
Free enterprise does everything better.
Why? Because if private companies don’t do things efficiently, they lose money and die. Unlike government, they cannot compel payment through the power to tax.
Even when a private company operates a public facility under contract to government, it must perform. If it doesn’t, it will be “fired”—its contract won’t be renewed. Government is never fired.