American Elephants

An Enterprise Society Doesn’t Come From State Control. by The Elephant's Child

In 2006, Baroness Margaret Thatcher contributed this essay to The Reason Foundation’s Annual Privatization Report. In it, she had some things to say that are quite pertinent for today’s American politicians:

All too often the state is tempted into activities to which it is either ill-suited or which are beyond its capabilities.

Perhaps the greatest of these temptations is government’s desire to concentrate economic power in its own hands. It begins to believe that it knows how to manage business. But let me tell you, it doesn’t as we discovered in Britain in the 1970s when nationalisation and prices and incomes policy together deprived management of the ability to manage. And when we came to privatise and deregulate in the 1980s it took some time before these skills returned.

A system of state control can’t be made good merely because it is run by “clever” people who make the arrogant assertion that they “know best” and that they are serving the “public interest,” which of course is determined by them. State control is fundamentally bad because it denies people the power to choose and the opportunity to bear responsibility for their own actions.

Conversely, privatisation shrinks the power of the state and free enterprise enlarges the power of the people.

Click here for the rest of the essay.

Why We Need To Reduce the Size of Government: by The Elephant's Child

A much discussed article in the Wall Street Journal on April 1 (not an April Fool story) by Stephen Moore was titled “We’ve Become a Nation of Takers, Not Makers.” The essence of the article was the revelation that today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million).  A  reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?Every state in America today except for two—Indiana and Wisconsin—has more government workers on the payroll than people manufacturing industrial goods. Consider California, which has the highest budget deficit in the history of the states. The not-so Golden State now has an incredible 2.4 million government employees—twice as many as people at work in manufacturing. New Jersey has just under two-and-a-half as many government employees as manufacturers. Florida’s ratio is more than 3 to 1. So is New York’s.

Some states are laying off employees as they try to balance their budgets. ” Iowa and Nebraska,” Stephen Moore says, “are farm states, but in those states there are at least five times more government workers than there are farmers.”

Private industry has become ever more productive, producing more goods and services with fewer people.  Mr. Moore gives the example of education, which is considered a core function of government. There we measure performance backwards.  If quality fails, it is assumed to be because we don’t pay teachers enough, or class sizes are too big, or schools are “crumbling.” If education had developed as private industry has developed, education would employ fewer people, not more, and education would cost less.

Ever smaller numbers of Americans ride trains, yet ever more money is expended to support rail travel. The idea that government is inefficient, unresponsive, and does almost nothing well is ubiquitous. Studies, over and over, have shown that costs of government services could be cut sharply, and efficiency increased through competitive contracting with private providers.  Unions will fight any attempt to introduce competition.

President Obama believes that innovation will come about if government orders it up and provides the start-up funds. Yet that is not how innovation happens. Free people, competing, trying to improve, pursuing their own self-interest are the ones who come up with new ideas, new opportunity, new business, and rewards for their creations.

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