Over time through public policy our leaders have effectively stated that certain entities such as banks and automobile companies are too big to fail. Both have been bailed out through enormous amounts which the taxpayers had to front. Labor unions have lobbied state governments and congress for decades for minimum wage increases to protect their workers. Furthermore, they have lobbied for union scale wages to ensure they get government contracts and tariffs to protect industries they represent from foreign competition. We also see various industries such as the beautician lobby push for stricter occupational licensing requirements to secure their positions and to advance their pay all in the name of ‘safety’.
These examples mentioned above involve protection measures which shield entities from loss. Protection measures preclude an entity or company from the profit and loss mechanism. The profit and loss mechanism gives companies reason to reduce waste and take concerted efforts to profit as they are operating without a safety net. Reduced waste translates into more efficient operations for companies leading to better product offerings and higher profits.
This brings to mind two societal functions that government has chosen to take on, education and philanthropy. I estimate that the government controls roughly 90% of the education market. With that said, 90% of the education market is not subject to profit and loss or put another way, 90% of the market is being protected by the government. The typical private school is subjected to profit and loss and therefore does not have a guaranteed revenue stream while the government schools do through receipt of tax dollars. Private schools answer to the parents who pay tuition to send their kids to the schools while voices of public-school parents are more often crowded out by heavy power brokers including teachers’ unions and school board members engulfed in their own deep state.
As we progressed into the 20th Century the government, especially the Federal Government made great strides in entering the philanthropic market with the New Deal in the 1930s in which welfare was initiated then in the 1960s with the implementation of the Great Society. Prior to the 20th century, the United States was the most benevolent country in the world. At this time giving was done in a completely free manner through free exchange.
When government entered the philanthropic market giving became a protected activity. First consider private giving. When someone has given to a private charity or has been involved in running one, they know the challenges. From the giver’s standpoint, they first come to the realization they want to give and from there they choose a cause that is meaningful to them. Then it is up to a charity to convince givers that its mission aligns with their desired cause. To facilitate this process charities and non-profits hire development directors to ensure that their organizations are adequately funded. In fact, I recently attended a banquet for an organization I support and at one point in the evening myself and others in attendance were addressed by the development director and thanked for our support.
However, circumstances are quite different for government agencies that aim to assist the needy. Like the governmental schools they are not subject to the profit and loss mechanism. Consequently, both fail to minimize waste and over the years their operations have become increasingly costly which heavily impacts the taxpayer. As a result, their effectiveness significantly falls short of private outfits.
Accountability is also worth addressing. As mentioned, with non-profits development directors and the charities they represent take the time to address and thank their donors. However, in all my years as a taxpayer I have never received a thank you and appreciation from the department of social services or any government agency as a gesture of gratitude for all my years of contribution.
In a society free of government protection measures, accountability would be much higher along with a greater amount of incentive to improve one’s lot which serves the best interest of society. In this environment, those in need will receive more effective care as solutions would be a collaborated effort with community members who can operate in a free manner rather than being tangled up in a bureaucratic web.
In His Image 