Here’s three posts from Instapundit this morning:
ENVIRONMENTAL SOLUTION becomes environmental problem. D’oh! – Chemicals used to replace CFCs due to CFCs’ theoretical degradation of the ozone layer now seen as a significant greenhouse gas.
IF THIS HAPPENED IN THE PRIVATE SECTOR, WE’D BE HEARING ABOUT “GREED:” DC subway crash: Regulators had warned to replace aging fleet. — The DC Metro system fails to take unsafe cars out of service.
SACRAMENTO BEE: Dan Walters: Pension hike of a decade ago backfires. – Government-managed pension investment implodes.
What do these stories all have in common? They all demonstrate that government organizations do not systematically make better decisions in the same circumstance than do private organizations.
Leftists like to argue that, by some magical mechanism, real-world politicians make better decisions, especially better economic decisions, than do private actors in the free market. They usually make this argument after either the free market corrects itself naturally or the government interferes. They then simply assert, without any possibility of empirical verification, that the magic government unicorns could have prevented the problem if only they had been given enough power to do as they wished.
Such arguments are clearly ex post facto. Leftists cannot predict market correction any better than anyone else, so clearly they don’t have a predictive model of the relationship between any particular regulation and any particular market correction. More importantly, when they do have the power, they often do nothing to address the causes of the correction. Last year’s financial collapse demonstrates this clearly.
The three stories above are just a small sample of the legions of stories about government mismanagement in areas in which government tries to carry out the same task as the free market and fails miserably.
In the case of the CFC replacement, the claim was that the free market could not properly assess the harm caused by ozone degradation. Yet, government could not predict the harm caused by the replacement chemicals any better than the free market could. (It is also possible that we overestimated the impact of CFCs and that ozone depletion in the last 30 years is linked to this period’s short, intense sunspot cycles.)
In the case of the DC subway system, the Metro government organization behaved just a badly as a reckless private company might, and arguably worse. The Metro might plead poverty, yet leftists habitually refuse to believe that companies cannot afford any safety standards that leftists deem necessary. Leftists hold companies to such an arbitrary high standard even though private companies cannot raise money on demand. They cannot compel investors to lend them money and they cannot raise prices higher than consumers will pay. Government organizations like the Metro have no competition and can fund themselves from compulsory taxation. What excuse does the Metro have for not funding improvements that would also not excuse a private company? Even worse, as a government organization, the Metro has sovereign immunity. It cannot be sued for harm caused by its own recklessness.
In the Metro safety failure we see a government organization behaving like a ruthless private monopoly with immunity to lawsuits. The magical government unicorns clearly make the same bad decisions as private companies when faced with the same financial pressures.
In the case of the widespread public-pension failure, we see that politically managed investments are no more sound than are private investments. The magical government unicorns made the same risky investments as did the most irresponsible private investors. They based their decisions on the same overly optimistic estimations of perpetual market growth.
The damage caused by government investment failures hurts more people than does private failure. Private investors cannot make up their losses by resorting to compulsory taxation. Private investors cannot rewrite the laws to eliminate their contractual obligations.
These three examples demonstrate how government organizations make the same bad decisions in the same circumstance as do private organizations. There is no magic that causes people in government organizations to make different decisions than private actors would in the same circumstances.
We can’t rely on the unicorns.