It is well known that private industry is more efficient than government. Even the staunchest socialist will admit this, it is so obvious. The question is why is this so and what are the causes?
It begins with profit motive missing.
In a company, based on good or bad decisions, a person may be promoted or may lose his job. On the other hand a government employee rarely loses his job due to poor performance and promotions are frequently based on loyalty, not competence.
Furthermore, a private company, based on good or bad decisions, will prosper or fade away. Government agencies never fade away even when the original purpose of the agency ceases to exist.
What happens in government organization if they run out of money? Simple, they just ask for and receive additional funds from, you guessed it, the taxpayer.
Too often the head of a government agency is a political appointee. He often does not have relevant knowledge for the task at hand nor has he ever had any real life business experience.
Largely because of this there prevails a pervasive “don’t rock the boat” situation. He is generally intelligent enough to know that he doesn’t know and that the safest path is for him to carefully maintain the status quo. Thus he shuns change. Innovative suggestions are not rejected out of hand.
Rather they are sent to “committee for further study” to eventually die a slow but sure death, a familiar and basic government tactic.
At this point I am quite sure that the reader feels that I am being much too critical. The following interaction I personally had with the Post Office (a quasi-government agency that raises stamp prices as needed to try to balance the books).
The management consulting firm for whom I worked received a request from the Post Office to review their uniform clothing situation. The result of our thorough study was that we could reduce their costs by $500 million annually (in today’s dollars) and greatly improve the quality of many of the clothing items.
It was obvious that they were being ripped off by suppliers (but then who cares, don’t rock the boat).
I assume that our report was “sent to committee.” We never heard from them again. My father, Dr. Theodorsen, explained it thus.
Every so often Congress does get upset and conducts a hearing. The Post Office comes prepared to show them a report and say that they are preparing to implement it.
As the report goes stale the Post Office gets another company to submit a report. The plan is to keep an up to date proposal on hand for one of those rare occasions when Congress gets upset.
What I remember most vividly was that my father predicted this outcome even before we had submitted the report. I just could not believe that the Post Office would turn down such a huge saving.
But they did.
Theodore Theodorsen
Manhasset
