46. Contrary to the statement's premise, my view is that businesses are less likely ) Q! J9 W' B( b, y& E4 G8 @
than government to establish large bureaucracies, because businesses know that they are 0 H7 S) ]7 F0 e1 Y
more vulnerable than government to damage resulting from bureaucratic inefficiencies.
, W9 S, e; x7 | tMy position is well supported by common sense and by observation.2 k. T- H$ `; `" H
First, public istrators lack the financial incentives to avoid bureaucratic
' n3 B) l7 V1 D" O4 Y3 s. x1 ywaste. In contrast, inefficiencies in a private corporation will reduce profits, inflicting + y$ [! e; k: O
damage in the form of job cuts, diminishing common-stock value, and reducing
, `# F# E3 H) v8 }7 Z% G% femployee compensation. These are ample incentives for the private firm to minimize
! m! g/ | P5 N( I4 f0 T8 H( Y4 o8 |bureaucratic waste.
# Y, }* l, W/ h/ ^* c: x5 P* C Second, there is almost no accountability among government bureaucrats. The ) A4 U# o# ?) ~9 W( y. ?$ ? h/ G" L
electorate's voting power is too indirect to motivate mid-level istrators, whose & j8 Q2 |8 _0 z& d; n, ]9 |
salaries and jobs rarely depend on political elections. In contrast, private corporations " Y7 Y3 {+ @* _/ Z) @
must pay strict attention to efficiency, since their shareholders hold an immediate power % b" l) Q$ z. [6 T4 }/ N
to sell their stock, thereby driving down the company's market value.
+ X" M2 W0 @1 @+ E& B; G7 n Third, government is inherently monopolistic, large, and unwieldy; these features # b1 I+ X3 V: @4 V3 `
breed bureaucracy. Admittedly some corporations rival state governments in size. Yet
) k* K/ X5 M) M& g R( E% }7 p. t" keven among the largest companies, the profit motive breeds a natural concern for
) Y ?" M) r3 d6 ~trimming waste, cutting costs, and streamlining operations. Even virtual monopolies
. y3 i3 v& k9 v* ]8 l h9 ostrive to remain lean and nimble in order to maintain a distance from upstart
1 Z. G3 c; e% k4 Z& ncompetitors. When government pays lip service to efficiency, shrewd listeners recognize 0 {6 s3 G5 [) r) N
this as political rhetoric designed only to pander to the electorate.
) Q( a6 k S& Y; Y/ A) f8 Z- D4 N In the final analysis, financial incentives, accountability, and competition all ) M* z8 n' ]2 n! o; Y
distinguish private business from government, both in teems of their likelihood of
+ d Y7 r% a+ [1 K8 ~establishing large bureaucracies and in terms of the damage that these bureaucracies can
v7 Y0 ^( Q3 j7 ~" Ainflict on the organization. |