I know that's a commonly repeated idea, especially in this forum, but I don't share that assumption and don't see evidence for it. I believe they are two different tools, each better at different tasks, with some overlap.

> If this wasn't true, then the government wouldn't contract the private sector for various tasks.

Three thoughts: 1) Government doesn't contract out every task; the U.S. federal government has over 1 million employees and a $2 trillion budget, so it does quite a bit in-house. 2) Government does contract out many things; when they do it right, they are contracting where it's most cost-effective without undermining justice. There is much research showing that much privatization loses money but enriches the contractor. 3) Many of the contracting decisions are due to politics: Lobbying, and who has what donor or has which jobs in their district, for example.

Consider that many privatization advocates and those promoting the supremacy of the private sector are lining their pockets: They are the ones who get the lucrative contracts and the politicians who support 'privatization' get the lucrative donations. Also, as government diminishes, the wealthy and powerful grow even more powerful.

It is really a question of how one views the voice vs exit question, and how good a check those are (relative to each other).[1]

[1] http://en.wikipedia.org/wiki/Exit,_Voice,_and_Loyalty

In which universe?

Government projects get stopped for incompetence or wasting money about as much as they do in the private sector.

And it turns out that the private sector is just as capable of firehosing money at bullshit as the government is, otherwise all those repackaged loans wouldn't have screwed the economy.

There is a different limit on money for governments, given they back the money, but to assume that some form of cost/benefit analysis isn't generally practiced in public enterprise is to be working from a purely faith-based model of economics.

I'm not sure even this claim is warranted, from either side. Each has mechanisms for attempting to ensure the link between funding/performance, but from my perspective it seems like those mechanisms fail as often as they work in both sectors.

This cuts both ways - that's exactly why the government can and does shove money into things like infrastructure, basic research and, well, space exploration, while the private sector doesn't. There is no direct short-term profit motive for private sector in such endeavours. I emphasize "short-term", because the private sector is structured to care mostly about that. It takes a company to grow really big to invest in stuff like basic research - but at this point the internal structure of such company is more like that of a government than a free market.

The main difference is the profit motive. When a government department does something more efficiently, it has to use that efficiency to either reduce cost or improve quality.

When a private company does something more efficiently, it can take the spare money and shove it in the pockets of its shareholders.

It's not a guarantee that a particular public sector project or department will be more efficient than an equivalent private sector one; the Peter Principle may well scupper any efficiency improvements.

In addition, corporations which are closely-held have a very strong incentive to be efficient, as the officers/owners are the residual claimants. In larger, public corporations, their checks are shareholders, and their competitors, who (if more efficient) can drive a corporation bankrupt by under-pricing, or out-competing. I cannot recall the last government department driven to bankruptcy by a competitor.

It's not a symptom of public vs private, it's a symptom of lack of oversight, agency problem, and 'too big to manage' problems.

Government offices I've visited are no comparison to lush corporate settings; in fact they tend to be old buildings with old equipment and furniture. Consider what Silicon Valley corporations provide to their employees.

I've heard this story before and I believe it's a myth. I am aware of what goes on in many government offices, local and federal, and never heard of such a thing.

Democratic societies can choose to elect better suited leaders for their governance to do the job better, and vote to improve their models of governance to be more effective and provide better services/efficiency. Ideally - it happens occasionally, though not often.

Voting with dollars works about as well as voting with ballots, though. People are driven by the exact same irrational drives and misinformation whether they're behaving as consumers or voters.

The organisation includes the bit setting the budget, so if they are willing to cut it next year if this year's isn't spent, that looks a lot like the behaviour of an organisation seeking to reduce costs.

Besides, end of financial year budget spends in divisions of large multinationals also look like that.

I even found this convenient little slideshow.[7]

Here is a challenge: find more equivalently-sized government departments shut down for their failures. Examples of such failures would be the two dozen financial market regulators (as well as Freddie Mac and Fannie Mae) who failed to anticipate or mitigate the housing problems of 2006-2007, the various police agencies which regularly shoot innocent civilians (such as the LAPD), the department of Veteran's Affairs which caused untold suffering, or the education departments which have greatly increased spending without any improvement in outcomes.

Apologies for not addressing the second sentence, I wrote this reply before you had added that.

[1] http://en.wikipedia.org/wiki/RCA

[2] http://en.wikipedia.org/wiki/Lockheed_Corporation

[3] http://en.wikipedia.org/wiki/Delta_Air_Lines

[4] http://en.wikipedia.org/wiki/Chrysler

[5] http://en.wikipedia.org/wiki/Enron

[6] http://en.wikipedia.org/wiki/General_Motors

[7] http://www.thestreet.com/gallery/tsc-bankruptcy2-decade/0/ph...

The point is that there are some things which only government can and should do. Shutting down vital services isn't practical nor popular. People wouldn't stand for it. If a the leaders of a city the size of LA decided to shut down the police force and replace it with something different, they would be immediately voted out of office. The government isn't some external actor forcing its will on the people. The government serves the majority, a majority that prefers that not to have basic services shut down because they aren't performing optimally.

However in the private sector this happens all the time; either forcing one company to re-organize or a re-organization happens by a company going out of business and getting replaced with another one.

Voting for a politician (especially when you are stuck with two political parties) hardly constitutes voting for a re-organization.

Maybe there is a way to create competition in some way shape or form by having several different police forces (still government sponsored) that compete for your vote or maybe something else. But there definitely is a problem that there is almost no way to properly restructure a bloated government organization when it is underperforming, and somehow that should be addressed.

The public is unhappy with Thames Water, a private company, but no amount of private sector competition pixie dust is going to make another company start digging up London's streets to provide a re-organization.

It's not a problem with governments, it's a problem with natural monopolies and that's difficult to solve. Saying "government bad" is oversimplifying.

This is not a reasonable position, nor is it consistent with the rest of your comment.

If I pay £10 for something that costs £5. The organisation that just pockets the difference is less efficient from my perspective than the one that either reduces my next bill by £5 or gives me an extra £5 worth of service.

The point is that even if a private sector company operates with perfect efficiency, there is a built-in inefficiency from the consumer's perspective because investors need to make money on the deal.

The caveat is there because a handful of strategically placed idiots or geniues could easily make more of a difference than the fact that all the money stays within the system.

Every government executive's job (including appointees' jobs and to a degree every program), relies on a public vote every 2-6 years.

Democracy isn't nearly perfect, but as we've seen, neither are the markets.

You're right that I didn't; sorry. I have a hard time putting faith in the value or accuracy of Wikipedia, especially for sophisticated analysis.

There are other possibilities: corporate lobbying, the revolving door, regulatory capture, plain old corruption ...

If the private sector model of an economy is worse, then why has every first-world country begun to follow it? Because it's more effective.

You can argue that the private sector is a different tool for a different sort of job, but my point is that regardless of the job, small organizations almost always do it better. (Incidentally, that's the thesis of startup investing.)

The exception is with highly parallelizable tasks, like fighting a war. But space exploration isn't that sort of job.

I feel like I'm in an alternate universe. Strange day. It seems like it should be perfectly obvious that private sector control is more effective than public sector control in almost every area where people need to accomplish things. There is practically a mountain of evidence in support of this viewpoint, and it's hard to find examples that contradict it, unless it's also a highly parallelizable task like constructing a highway system. The most obvious counterexamples that come to mind are the justice system and monetary regulation. But those are two counterexamples in a sea of examples.

How on earth could a small organization do any of these things?

I can understand why you feel like you're living a Strange Day in an alternate universe, because the reality of human social organization is completely opposed to your thesis. If small groups are superior to large organizations in every case and in every way, why in the hell have people been forming large organizations for so long? Are we all just stupid, incapable of seeing the basic truth that you see? Were the Romans, Mongols, British, Mayans and all the others just a bunch of idiots? People have been forming ever larger organizations for the same reason that NASA is a large organization: because it's the best way to to do big things. That's why Google moved out of the garage and hired several thousand people. If small organizations were always better, startups wouldn't require investment at all.

It seems like your reasoning is based on the Homer Simpson quote, "Because they're stupid, that's why. That's why everybody does everything." But I can assure you, we aren't all stupid. Organizations get big because big wins.

The exception is with highly parallelizable tasks, like fighting a war. But space exploration isn't that sort of job.

So, here's your list:

D-Day. Federal Highways. The National Park System.

Those are highly parallelizable tasks.

The internet and the Manhattan project are better examples, but it's debatable whether those things would be invented regardless of governments. They were a matter of time.

Now, about the Apollo project: Congratulations, we spent a Metric Boatload of money, and it got us what? A flag on the moon. Whoopie. The US also got to thumb their nose at Russia for a bit. That is not space exploration. That is the ability to convert a large quantity of money into a really expensive, one-time-use space car that was designed to stick a pole in the ground.

More upsettingly, the Apollo project undermined real space exploration for decades. There were some viable ideas about how this could be achieved. You may be as interested and as surprised as I was when I first realized this was true: http://www.spacedaily.com/news/nuclearspace-03h.html

Or you can dismiss this as readily as the rest of my comments. Either way, my new years resolution is going to be to swear off any kind of politics on any kind of online forum.

Your point about startup investing is rather off the mark. Most startups fail - which is not something you can do if you're providing the water supply or sanitation services for a country (or county). Governments might be less lean but redundancy also means resilience.

Your comment about an alternative universe resonates with me. As a non American, it's how I often feel when I read comments from people like you who assert that "It's just true by definition" that the private sector is more effective at everything.

Is that really mistaken? Since I'm getting so much pushback, I should probably think about changing my view. But I don't understand how this could be true: "The public sector is better than the private sector at most jobs." It seems like the vast majority of the time, it's the other way around.

Don't get me wrong, there are numerous flaws in the public sector that I would like to see changed, but its also saddled with constraints that are at least as burdensome as regulatory overhead the private sector deals with, if not more so.

Only it turns out that a hell of a lot of the companies that bought stuff like the utilities and railways are actually the public enterprises of other countries.

So 20 of the UK rail lines are still publicly owned and run, just by another countries public sector, while our own is banned by law from bidding.

http://www.independent.co.uk/news/business/news/revealed-how...

So, with impeccable logic, the government has privatised it.

I wouldn't be at all surprised if some of our services eventually get renationalised through a legal challenge based on competition law opening up the bidding again, as the whole logic breaks down rather completely at the point at which you try and fix it by banning any foreign publicly owned industry from bidding, then realise that you have knocked out most of the best qualified bids.

But it has been returning money to its "shareholder", the government, which is kind of analogous.

Anyway, your argument is really weird. It implies that all existing regimes are optimally fit since they exist. But that's clearly not true.

IMO, this is a troll comment. If you are making a grand point, I don't see it.

EDIT: I'm not replying to your point because I can't understand your point. Apparently it's obvious to you, but it is far from obvious to me what you are saying.

Why did this devolve into a number comparison contest, rather than addressing my main points?

EDIT: Oh, here we go. Now I'm looked down on with so much scorn that you won't even reply to me. Really? Edit wars?

My point was this: The average comment is becoming shorter, meaner, and less logical. Additionally, the value of the voting system is becoming diluted over time, as more people participate. Mainly I'd like algorithmic protection from people who downvote all of your comments regardless of how well-reasoned your followup replies are. Limiting people to one downvote per person per thread seems reasonable.

My thesis in the main discussion is that if you hand a job to the public sector and to the private sector, the private sector will accomplish it with fewer resources and more quickly than the public sector. The exception is with highly parallelizable tasks, like fighting a war. The counterexamples are the justice system and financial regulation, yet those are only two counterexamples compared to a huge body of examples.