So I’m going to preface this by saying it’s mega TLDR and got way away from me. It’s my own personal thinking on when to use the government, when to use private organizations, and why (it’s mostly about minimizing power system wide). I’m sure all of it is stolen from a variety of places that I can only attribute some of. It’s what happens when you go to college for something for a few years and then keep thinking and reading about it for years afterwards and it all starts to blend together. I think it’s fine. There is a TLDR summary at the bottom because lol at reading this shit. Like three people will and two of them will just be looking for the three sentences they can best use to dunk on me. Also this is going to get edited like 6 times because I’m an idiot posting manifestos on the internet. So without any more long winded bullshit I give you Boredsocial’s framework for government vs private control in the economy.
So first we have to break down size and organizations.
First every task out there has a minimum size that you must be to actually execute the task. Many tasks are large projects that require the full time effort and cooperation of hundreds of people from many different lines of work, and there is a size that an organization at an absolute minimum must be for any task you can name.
Second as an organization gets larger they gain economies of scale at a diminishing rate of return. What this means is that for the first x number of expansions above the absolute minimum size (unless the absolute minimum size is extremely large) you’ll create relatively large savings as you buy more of everything, gain more power over your vendors because of your relative importance to their overall business, and consolidate operations to drive down costs. This isn’t controversial, but what is controversial is that I’m 99.5% certain that nearly always the diminishing returns kick in way earlier than people would have you believe and that above a certain size most of the ‘savings’ come from moving expenses from one place to another rather than actual gains to the organization.
Third as organizations get larger they create more and more waste. There are more layers of hierarchy and decisions get made slowly. Opportunities get missed and a good decision for one sector of a large organization can end up being really trash for a different sector. One size fits all really doesn’t work all that well and the larger you get the more individual sizes there are inside the organization. This is why life in big corporations and government is often it’s own special kind of bureaucratic hell filled with endless meetings attempting to thread the very difficult needles that large organizations structurally create constantly. Waste frequently shows up as the organization not changing when things change and doing sometimes wildly incorrect things for long periods before adjusting to the new situation (if it isn’t fatal).
So what we have is a minimum size (which can be quite large if your task is ‘build the Hoover Dam’), economies of scale (which makes size desirable up to a point after which it falls off rapidly), and waste (which grows at some rate dependent on a lot of variables but if you study each org in a vacuum is basically bigger = more).
And it would be pretty simple if we stopped there but there’s one more very important aspect to consider: Power. Power as I’m defining it is the ability to hijack the economic decision making process to create processes that favor something other than society at large. It isn’t always exercised, and it usually comes with rules in how it can be used, but Tolkien’s One Ring was an excellent representation of it. Everyone without any power thinks that if they got control of the levers they’d be benevolent but many people have reached the levers of power and very few have actually been benevolent.
Power is an intoxicating drug that literally changes the way the human brain works. It reduces empathy to the point we can detect it on brain scans. People change when they get power in very real ways… and since power is intoxicating and massively addictive the people who are already on it have HUGE incentives to prioritize getting more of it for themselves. As a result the decision making of almost all large organizations, regardless of where they stand with regard to minimum size, economies of scale, or waste is almost always hugely oriented toward getting bigger… because that will result in more power for the person at the top who will often do nearly anything to chase the high.
Up to this point I haven’t made any distinction between private and government organizations and that’s because that’s its own thing entirely.
Government institutions do not require the end users of the task they are doing to pay them directly. This is a huge deal and automatically makes the government a superior organizational type for all kinds of tasks society needs done. Education, healthcare, disaster prevention and response (including fire departments), law enforcement, and infrastructure.
That advantage does come with a drawback, which is that there isn’t much of a feedback loop to tell a government organization that something they want isn’t doing any good or worse is hurting people. In fact since the people at the top generally have an entire careers worth of power wrapped up in the continued existence of this government organization they’re likely to double-triple-quadruple down on the mission in an attempt to get the results that were promised when the organization was created. A great example of this drawback in action would be police departments and police unions.
Counter balancing that drawback is the fact that government organizations are at least theoretically held accountable by the voters representatives who brought them into the world by funding their mandate and can take them out of this world by defunding that same mandate. I say theoretically because the powerful corporate interests in the US have been colluding with some of the powerful government agency interests to make the people’s representatives increasingly decorative. But that’s something specific that’s happening in the US to a much greater degree than elsewhere.
There’s one additional negative aspect of government, which is that they gain less in terms of economies of scale than private businesses do (another way to say this would be to say that federal employees and vendors are generally paid fair market value or better for their services regardless of how big the organization paying them is… sometimes legislators actively block government entities from even negotiating bulk discounts ffs. Meanwhile large private entities create highly abusive monopsony (like a monopoly but you’re the one who buys everything) setups that allow them to show huge diminishing returns at least on paper. There isn’t really anything in terms of waste that can actually kill them and in fact if they fail their mission dismally it will often be taken as a good reason to raise their budget. Again a good example of this would be law enforcement and the prison industrial complex.
So far I’ve talked a lot about government because it has some special dynamics that don’t apply to private entities. Private entities are accountable to the market instead of to voters. Every action they make has to be justified in the context of ‘was what I spent on this worth what I directly got back’ unless someone with power intentionally bent the decision making process to send the proceeds to themselves. (An example would be a company with a vendor that they grossly overpay owned by CEO’s son).
In my head there are two situations a private business can be in. The first is the normal business which produces a product or service and is forced to both pay and receive market rates for their inputs and outputs. These businesses value is in whatever makes them special and they do some pretty incredible work. To speak ill of this type of business is to speak ill of every good experience you ever had consuming stuff. They tend to follow the standards and practices of their competitors because if they don’t they’ll eventually stop being profitable enough to be worth the trouble (which is an individual calculation made by specific people in their own context). If everyone in their industry pays a specific job really well they tend to pay that specific job really well. If everyone in their industry treats a specific role like bubble gum stuck to the bottom of their shoe they generally do that as well. These people are just existing day to day running the process that converts the inputs they buy into the outputs they sell. These people have very little power in a macro economic sense. If they are tyrants they are extremely petty tyrants. The worst tyranny they are part of is the systemic kind created by the manipulations of people with actual power that they themselves are really just as subject to as anyone else in the process.
The second happens when a business gets big enough to be impossible to avoid in the market. At this size your decisions about what to pay workers in different roles are carefully watched industry wide because if you raise the pay on that role no one will be able to hire it for less and if you lower the pay on that role no one will be able to afford to pay more. You become the policy maker in your industry able to pick winners and losers through the supply chain (only constrained by what people outside your sphere of influence are doing) and that power comes with the ability to set how you yourself get paid. Firms who have a lock on customers frequently stop caring all that much about what their product costs because the customers will pay whatever they charge, and firms with a lock on suppliers frequently stop caring if their suppliers are sustainable or not (which leads to many of the really ugly things you see in capitalism as vendors scramble to figure out how to deliver these contracts at lower and lower prices and cut crazy corners). Powerful private entities generally use their power to take more from both their inputs and their outputs than they would get without that power. The bigger the private organization the worse this effect tends to get. The main business of most big private organizations in the world is simply being big and monetizing the power that comes from being big. These companies aren’t accountable to the market, the market is accountable to them. This is an excellent example of why power is terrible and large so called private institutions are very hard to justify being bigger than the absolute minimum size they need to be to provide whatever it is they provide. Huge conglomerates that provide many different services (and I would classify all of the tech companies this way) should be broken up to minimize the amount of power that exists and maximize competition (which is the only thing that I’ve seen that can consistently tame private individuals into acting even a little bit civilized).
So TLDR conclusions: Because one of my key goals is to reduce the total amount of power in the world and to prevent self dealing in the cases where power actually is necessary I like small to medium sized private organizations handling everything that can be reasonably handled by them (pay as you go good or service that doesn’t have a minimum required size so large it requires them to become a market dominating nightmare factory) and the government gets the rest. I think this usually looks like the government providing healthcare, education, disaster stuff, law enforcement, infrastructure, basic science research, jump starting entirely new industries (the government should be taking significantly more in exchange for the help they give, but we have an awful lot of solar panels to build and solar panel factories are the kind of thing that private orgs do better than the government), running the natural monopolies (think utilities/cable/internet + healthcare), providing competitors for private industries (the post office should also be in the consumer banking space essentially operating a treasury backed credit union… this is just one example) that get too powerful, and providing a basic income to all its citizens to normalize negotiations between the workers in the bottom 60% and their employers.
And set the rules of course. The single most important job government probably has is running the regulatory state that notices specific instances of abuse (especially industry wide abuses which are basically impossible to fix without it being an industry wide blanket with real enforcement) and systematically blows up what makes those abuses make individual sense.