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All of these are decisions that need to be made by government bureaucrats, but they do not have the necessary knowledge, imparted to them by profit and loss signals, to make that decision to achieve the most efficient outcome. All of these decisions are made arbitrarily, in the sense that they may think they need to do things this or that way but they will never truly know since they will never receive the profit and loss feedback I explained.

See today’s other (loss feedback) post regarding East Palestine.

by Owen Ashworth

https://libertarianinstitute.org/articles/public-vs-private-performance-standards

There is an interesting paradigm in political culture where we seem to hold differing standards for private versus public entities. If you were to ask your average person walking down the street whether we should bail out a random, private company that is not performing well and will likely go out of business I think you’d be met with a resounding no. I agree with this; if a private company is failing it’s because they are failing to run their business properly and whatever the reason may be, they are failing to provide the necessary value creation to stay afloat. However, if I were to ask the same people, “Should we solve the myriad issues with public institutions like education, social care, healthcare etc?” I would most likely be told that we should intervene and, in some form, throw money at the problem.

You can see the inconsistency here. Why does it come naturally to intervene and chuck money at failing public institutions but when it comes to private firms, we balk at the thought of saving them?

Let’s take the National Health Service. It consistently underperforms in healthcare outcomes when compared to other European countries, even before 2010. In healthcare outcomes, the metric I think everyone would agree is heads and shoulders above the rest in importance, the NHS performs horrifically.

The British state school system has been failing for years, with attainment falling repeatedly even before the Labour Party—not exactly known for being fans of cutting spending—was kicked out of power in 2010.

These are two huge parts of political discourse where there is a clear inconsistency in the logic that higher spending equals better outcomes. If state run schools and hospitals were private firms, they would have gone out of business years ago for not being able to educate children and keep people alive. Some may be sympathetic to the idea that if money was thrown at a lot of failing businesses, that it’s reasonable to conclude that those businesses would be saved. However, that idea assumes that public and private entities operate under the same framework. That couldn’t be further from the truth, but it’s why we keep seeing a general stagnation or downward trend in the quality of services provided by public entities.

See the rest here

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