Not every need can be handled by the free market but those things that cannot are still best managed in a way that mirrors free market mechanisms. That is to say, government systems work best when the reigns of control are closest to those who are being served and, wherever possible, the cost of those services are borne most directly by those who benefit from them. Working as a management consultant for state and local government agencies for roughly ten years, I can confidently say that this is frequently not the case.
The distortion of government’s relationship with citizens is not something new. Frédéric Bastiat wrote The Law in the midst of the Third French Revolution. In this work, he warns of government’s tendency to bloat and engulf large slices of public life. If given the opportunity, government authorities look for ways to serve niche audiences, which in turn quickly becomes a way of serving themselves. Bastiat outlines how the state develops laws to assist special interest groups and in the process creates a system wrought with favoritism. He also touches on the benevolent bureaucrat fallacy that naturally follows (my term, not his). Once legislation is established to protect certain groups over others, the system must be monitored. There is no way for the government to play this role without assuming the position of a holy arbiter that is capable of objectively judging what is “good” for society:
“How comes it to pass that the tendencies of organizers are always good? Do not the legislators and their agents form a part of the human race? Do they consider that they are composed of different materials from the rest of mankind?… They have, therefore, received from heaven, intelligence and virtues that place them beyond and above mankind.”
-The Law, Frédéric Bastiat
Like many of you, I am witness to this phenomenon running rampant across our semi-socialistic society. As a consultant who has worked with public sector clients for nearly ten years, I am also privy to the deep end of bureaucracy in a way that many are not. In my experience, I have started to see a pattern. I will speak in generalities here but all that I say is true, as far as generalities go.
A government agency will receive funding for some purportedly benevolent task. I work most frequently with agencies involved in education, workforce development and economic development but I think the points of emphasis will be pretty similar across different sectors of the government. Pardon me for having you read this bureaucratic puke, but these words are not my own. Some common aims include: “to provide better services,” “to gain understanding of issues facing businesses,” “to facilitate connections among stakeholders”- take your pick. Government employees who have been through such efforts in the past form cliques that include a small number of private sector representatives but a much larger proportion of government employees. Therefore, throughout the project they are talking to other people just like themselves, but with a slightly different shade of responsibilities within another division of the government. And the meetings sound like this:
“Hi, I’m the workforce education coordinator for xyz College.”
“Hi, I’m the director of workforce development for xyz County.”
“Hi, I’m the assistant director or workforce initiatives for the xyz Metro Area”
And so on.
So these people get together and they talk about what they want to accomplish. To their credit, they may beg and plead for involvement from the businesses that they are seeking to serve, but usually to little avail. Now the business people that do get involved usually have an angle for doing so; either they are a small companies that think they are signing up to receive some form of special privilege, or they are major corporations big enough to employ a government affairs person. This is how the special interest crowd gathers steam. Some choose to work closely with the government and in the process their needs become paramount to others.
However, by and large, the people that government agencies are seeking to help are too busy serving their clients and trying to make a living to show up and talk to the government! It’s truly stunning how much of these government funded, which is to say YOU funded, projects boil down to a bunch of mid-level bureaucrats in conference rooms talking to one another. “Jim, that was a great lunch. Now let’s talk about next time we are going to get together.”
The opinion of a single private sector representative is more valuable than that of 16 government workers. It is also about that rare.
In my years, I have organized lots of interviews, focus groups and surveys, and in every project the opinion of a single private sector representative is more valuable than that of 16 government workers, and it is also about that rare. To use an example from a recent project, the company I work for set up a series of focus groups with small businesses. The attendance was paltry in general. At one particular meeting, the one person who showed up was a representative from the US Equal Opportunity Office. His opinions represented the norms of an average business owner about as well as a butcher represents the opinions of a cow.
After crunching all the data, summarizing all the focus groups, and looking up all the best practices the client is left with a report that highlights the opportunities the agency has to really help the public. There is a network of government employees, supported by a small cadre of private sector representatives, who want this initiative to work. In the best of circumstances, those private sector business are willing to pony up some dough to keep the ball rolling. In the worst of circumstances the wheels start churning. “Well, this is going to be expensive. I wonder where we can get some money to fund it…I know. Taxes!”
Once the taxation route is taken, it is not long until those programs become ends unto themselves. They must be protected against any threat of reallocation or downsizing. This is all for the good of the citizens, mind you, because government cannot make a profit and therefore is free from the sinful temptations of the private sector. Remember Bastiat’s words, they possess “intelligence and virtues that place them beyond and above mankind.”
Now I don’t want to overstate my point. I am not an anarcho libertarian. We need government and when government workers are acting as public servants, they have a noble calling. Neither am I opposed to the government seeking to understand the needs of the citizens it serves. Why should market research be limited to the private sector? What I am saying is that if a service is truly needed, it should not be so hard to get people involved to talk about it. Indeed, if it’s so essential we shouldn’t require grants from the Department of Bureaucratic Affairs in order to keep the initiative going?
My least favorite projects to work on are those where there is a large chunk of external money dropped into the coffers of state and local government. In these cases, there is no lever for local citizens to guide (or eliminate) these initiatives. These efforts are most likely to end up self-serving and self-justifying. By contrast, some of the most successful government agencies that I’ve worked with are those that receive voluntary funding directly from the groups that they are serving (think of Chambers of Commerce and workforce training centers that are co-funded by companies). In other words, there is economic proof that they are needed and that they are doing a good job. If they weren’t they would quickly find themselves without a paycheck.
Why, you might ask, if I feel so cynical about government social services projects do I continue to work in this industry? There are two answers to that. One, despite the brokenness of the system, some people do need the services provided by these agencies. In time, I hope Christians will step into these voids to serve the needs of the public but for the time being I’d rather that these things are done inefficiently than not done at all. Second, I am actively working on getting involved in projects that are not so fueled by coercive government funding.