The Government and the Private Sector

[Nym90]

I think you make excellent points Nick.

One thing I've always found interesting is how people view government and business as fundamentally different. They really aren't actually in some ways. I think one could view government as merely business on a larger scale; one that has 300 million shareholders. It has the ability to do things that no business would do, since no business would ever be able to raise the funds that government can, and also because business needs to make a short term profit usually and is less likely to be willing to take a short term loss for possible but unknown long term gain (think of the construction of the interstate highways, or the space program as things that would fit this).

I think that one is not really fundamentally better or more efficient than the other. Both have strengths and weaknesses, and the best economy is one that combines the two, and isn't too reliant on one or the other. I think that the physical process of actually doing something is usually going to be better done by private enterprise. Once we know what we want to do, private business will usually do it better than government will. However, I would argue that the process of deciding what we should do is better left to government. That enables the decision to be made by everyone and not just dominated by the wealthy or elite.

I think that overall the best economic system is one where the framework of decision making about the economy is in the hands of government, which then contracts out for the actual work to private businesses. Government steers the boat, but business rows it, so to speak. There are obviously exceptions to this, but I think that for most things this model works best.

You do make very good points about the fact that government as a whole does a far worse job of self-promotion. I think government in general needs to do a much better job of explaining why it does what it does, and focus more attention on PR (in a sense it's unfortunate that this is necessary, but it is).