46. Contrary to the statement's premise, my view is that businesses are less likely . U; o% k5 f0 p, n
than government to establish large bureaucracies, because businesses know that they are 9 x% I2 s2 A! J" i
more vulnerable than government to damage resulting from bureaucratic inefficiencies.
1 b! Y, q$ a8 C8 e8 L$ Q! \3 o# sMy position is well supported by common sense and by observation.( Z# V% H% x/ q
First, public istrators lack the financial incentives to avoid bureaucratic / |& r. x- p5 a2 j7 |
waste. In contrast, inefficiencies in a private corporation will reduce profits, inflicting : d* [% T( i Q
damage in the form of job cuts, diminishing common-stock value, and reducing / k1 a" H- j- \4 A
employee compensation. These are ample incentives for the private firm to minimize + U: u5 g1 P4 C
bureaucratic waste. N% c( c* G" w- ^: S E
Second, there is almost no accountability among government bureaucrats. The 3 U6 }/ a% ?8 c
electorate's voting power is too indirect to motivate mid-level istrators, whose " j+ M3 C0 d* L+ H0 N+ k& D
salaries and jobs rarely depend on political elections. In contrast, private corporations
+ W g# x% K! M! e5 Umust pay strict attention to efficiency, since their shareholders hold an immediate power
4 V {$ J+ U: v2 a1 tto sell their stock, thereby driving down the company's market value.) T6 @ I9 {2 u* x/ f& O: l
Third, government is inherently monopolistic, large, and unwieldy; these features
}) p' q- ?2 w' w3 ybreed bureaucracy. Admittedly some corporations rival state governments in size. Yet
' K) H7 U: o/ w+ R$ @even among the largest companies, the profit motive breeds a natural concern for 0 n, d5 ?4 t9 ?8 P0 I; z& O
trimming waste, cutting costs, and streamlining operations. Even virtual monopolies 4 R. |' G" m7 z
strive to remain lean and nimble in order to maintain a distance from upstart
+ l5 H2 ? Z5 ~3 S% |) mcompetitors. When government pays lip service to efficiency, shrewd listeners recognize $ g1 c; y1 }* x7 {) I
this as political rhetoric designed only to pander to the electorate.
5 `* K7 M4 `1 I9 Z* Z C In the final analysis, financial incentives, accountability, and competition all
* N* }8 r6 u: R' }. k% u# pdistinguish private business from government, both in teems of their likelihood of 9 g" Y3 B9 t# F9 q
establishing large bureaucracies and in terms of the damage that these bureaucracies can
/ P* q0 _- G. H6 Minflict on the organization. |