Why A Government Run Market Can’t Work

First we have to accept that there is no perfect system possible. People are people, for good and ill. All we have to work with are incentives.

People who gravitate towards working for, with, or through government almost all have an urge to power, to control what people do. Whatever area of power a government is authorised to operate upon, the boundaries of that area will do nothing but grow ... and grow and grow.

People who do not pay for what they get almost always abuse and/or overuse it, no matter how vital or trivial. Anytime you give something to people for "free," they will never say they've got enough of it. There will always be a demand for more.

Everyone as a buyer wants to get the most they can for the lowest cost. Everyone as a seller wants to get the most money they can for what they sell.

People also tend to be caring, to be generous when they can afford to be, to think they are doing good, not only for themselves, but for the people they care about and even people in general. But people think they know more and are more competent than they really are. They tend to oversimplify the complex and make the simple complicated. Either that or abdicate the authority to choose for themselves to those they deem smarter, more powerful, and better informed than they are. However, no one can know more or can be more concerned about any individual's needs, wants, and desires and how much they value what things, in what proportion, than that person themselves.

While there are always exceptions for every rule about human nature, these are pretty near universally true.

Anything that you try to set up that doesn't take *all* of these into account is going to fail to achieve its stated ends. It will do too much or too little. It will result in the wrong things being done at the wrong times done by the wrong people with wrong information. No one will be happy with the results.

Top down, command and control, never works in the long run. Even in the military, which comes closest, the best structure delegates detailed decision making to the lowest level possible, to the ones with the most knowledge about the actual situation at that specific place and time in the context of the operational goals.

Micromanagers at the top in the military get a lot of people killed. Micromanagers in any large organization waste assets and misdirect efforts, whether it's in a government bureaucracy or a company. They simply *cannot* know enough to make the best decisions for others. No one, even with the most powerful computer and big data, can. It's hubris to think otherwise.

The best system to get the most good for the greatest number is no system at all. To let those who know their own situation best make the decisions. Who know what they value and how much and what their own personal goals are.

Then use the general benevolence of people help those who cannot help themselves. Their desire to maximize their gains, even in the emotional sense, is tempered by wanting to get the most for their time and money and so weed out the grifters. To decide for themselves which charity is doing the most good in the particular area they care about with what they are given, which means low overhead and minimal waste.

Government, by its very nature, cannot be efficient. It cannot take individual situations into account. It cannot change directions swiftly under changing conditions. It cannot operate under anything but bureaucratic structures with all the power grabbing fiefdoms and resource wasting procedures that it inevitably results in.

To try to put something important under the control of a system that ostensibly tries, but simply cannot be, all things to all people, while wasting valuable and scarce resources in people, facilities, and money is an incredibly bad choice.

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Posted in Economics, Public Choice.