Tag Archives: World War 1

Government-Run Business, Epic Fail

As I’ve said before, several times, government involvement and control of business is a recipe for failure, disaster, loss, pain, hurt, evilness, etc.

In the Wall Street Journal, John Steele Gordon:

In 1913, for instance, thinking it was being overcharged by the steel companies for armor plate for warships, the federal government decided to build its own plant. It estimated that a plant with a 10,000-ton annual capacity could produce armor plate for only 70% of what the steel companies charged.

When the plant was finally finished, however — three years after World War I had ended — it was millions over budget and able to produce armor plate only at twice what the steel companies charged. It produced one batch and then shut down, never to reopen.

But epic failures on the Government’s part aren’t relegated to such ancient history.

Medicare is a prime example of government-run medical care:

Last year the Government Accountability Office estimated that no less than one-third of all Medicare disbursements for durable medical equipment, such as wheelchairs and hospital beds, were improper or fraudulent. Medicare was so lax in its oversight that it was approving orthopedic shoes for amputees.

And such failures through the history of government are not aberrations, they’re inherent to the system. John Gordon argues there are at least seven reasons government failure is the rule and not the exception when it comes to running things:

  1. Governments are run by politicians, not businessmen
  2. Politicians need headlines
  3. Governments use other people’s money
  4. Government does not tolerate competition
  5. Government enterprises are almost always monopolies
  6. Government is regulated by government

John Gordon ends his argument admitting that Capitalism isn’t necessarily pretty or perfect:

Indeed, to paraphrase Winston Churchill’s famous description of democracy, it’s the worst economic system except for all the others. But the inescapable fact is that only the profit motive and competition keep enterprises lean, efficient, innovative and customer-oriented.

In other words, Government hurts and harms. Damage and destruction are in it’s nature. Why else is government the best at war?

And private enterprise is the best there is at alleviating suffering and maximizing wealth to the most people most effectively and efficiently.

Read John Gordon’s whole article.