13 September, 2009

government - big or small

Sorry, this is a rant about politics. I try to not let it bother me anymore, but sometimes I can't help myself. Skip it if you don't care about such stuff...

He. Havoc blogs about the size of government and how various political parties think about it.

He links to a pie chart of the US government spending on Wikipedia and accuses both liberals and democrats of saying one thing and doing the other. Basically, Republicans say they want tho make the government much smaller, Democrats want to increase it's size. The reality is that both balloon the size of the government (see what Republican Bush did with federal spending...). Of course the public prefers decreased taxes and increased spending, showing they're just as nuts as the politicians.

Personally I've often felt irritated when there was talk about problems and solving them. Apparently, the solution is always 'spend more money on it'. Because budget is always limited, we take money from something not currently in the spotlight and move it to an area the public currently cares about. Then, in a few years, that less-important topic becomes news - cuz you know, the budget cuts hurt, and now service in that area sucks. So the money is moved again...

Instead of the whole liberal/socialist discussion, why can't we stop moving money and start focusing on returns? I am not interested in how many billions are spend on health care, I'm interested in good health care for the lowest possible price. In other words, efficiency. If good health care for all dutch citizens costs us 20% of our yearly budget, so be it. As long as I don't have to pay 25% for getting 15%!

Politicians focus too much on how much money is spend on a certain category. Why can't we define what we want from that service and make sure we get it for the least amount of money? I don't hear politicians talk about 'lean six sigma' and improving management. They always want to trow more money at the problem.

And we all know what happens if you double the amount of money spend on something. You might get 10-20% more, but output never doubles. I'm not saying management bull crap like six sigma is going to save our government, but the public sector is on average between 10 and 20 years behind on management innovations used in the private sector. I believe a combination of good management and good management techniques DOES improve efficiency. We can do so much more with our money, and every citizen of every country knows it... I don't get why politicians don't talk about THAT.

A well known dutch politician, shot for his ideas a few years ago, Pim Fortuyn, actually spoke about this. Of course in his typical, rather extreme fashion - the attitude he was shot for. But he said it: decrease bureaucracy. Do 20% more with 10% less. I doubt he, or anyone, could have pulled it off in a 4 year term, but at least he made it a real topic.

Oh, current politicians in NL do work on it - by letting others solve the issue they can't. They are introducing market economics in our health care system, and successfully did the same in the mobile phone and internet connection markets (our rates are now among the lowest in the world). Yes it works. But in many areas it isn't possible. And I think it's not a vote of confidence in yourself if you admit you can't do something reasonably well so let someone else (the market) take care of it... Get of your lazy asses, read a few management books and do something! Local governments won't get of their asses themselves - research has shown the vast majority of government agencies only introduce new management techniques to improve efficiency when the law forces them to. And the few which do experiment and strive to improve are often almost beheaded when something goes wrong - don't ya dare to try something new and better!

Meanwhile, what will be the topic for the election? "wat kost een allochtoon" (what are the costs of an immigrant for society). Sure, important I guess. But I'd rather pay 10% less and get 20% more - a few immigrants won't make a difference if that were to happen...


  1. Heh. Here in Denmark, they are always going on about doing stuff more efficiently. So perhaps that tendency would move towards the south. Don't expect miracles, though, successes are uncommon to say the least, and resistance is high

  2. Actually it is exactly the talk of *efficiency* that most annoys me in politics ATM. Everyone wants to increase efficiency and doing so is difficult but politicians try to make it seem both simple and party political.

    It usually comes down to politicians saying they will cut bureaucrats and increase front-line staff. It's like saying the most efficient way to build a city is to spend all your money on labourers.

    It is inevitable that large organisations have inefficiencies. Trying to impose efficiency though targets and central governance introduces inefficiencies and devolving power to allow everyone to manage their own patch also allows inefficiencies to flourish. What's more with something like a national health service, the aims of the organisations are, and should be, fairly amorphous. It is really quite difficult to say what efficiency is.

    Problems cannot be solved simply, so what is needed is a systems that allows autonomy and innovation at every level, adaptation to local needs etc. but that also has both internal and external review. You cannot just "cut out" inefficiency in a huge organisation but you can put in place systems that prevent bad practice of all kinds from festering.

  3. Whatch this video for some history on the subject, http://www.youtube.com/watch?v=eumbzcG7qgU

  4. Funny thing is I had a long chat about how doing things efficiently is kind of impossible, and I know governments do spend time on that. Still, politicians prove to be very bad managers most of the time, and most government agencies I know really suck at efficiency... At least compared to modern, western companies. Of course, the fact they're 10 years behind on the private sector means they ARE more efficient than eg in the '60s, it is getting better. But I'd love to get em in line with (or closer to) the private sector in that area...

  5. I would like to advice you to read on austrian economics:

    They have a common sense explanation of how efficiently constantly increases in a free market.

  6. as a follow up, it also explains why an individual, no matter how good of a manager he is, is unable to optimally allocate resources for an efficient economy as a whole.

  7. Healthcare and Internet/mobile communications are two quite different matters from the perspective of most political parties. Claiming that the introduction of market economics into mobile communications (for example) must lead to similar success in the provision of healthcare is to ignore both the regulatory environment in the former and the essential social nature of the latter.

    You only need to look at Britain, as few in other countries who advocate widespread privatisation manage to do, to see where favouring private sector involvement can lead to the opposite effect of success. Consider fixed-line communications (still largely stifled under the legacy of the BT monopoly), rail services, the health services (improved at great cost and now overburdened with consultants), utilities (short term profiteering at the expense of acceptable service and, in the case of energy, acceptable provisioning for future service).

    Many of the failings of British privatisation came about because the Thatcher government didn't want the state to be in the business of managing public services any more, nor to have to raise and spend money on such services (which also explained the dilapidation of many of them). Yet the activities of management and funding are not magically improved by private sector involvement - it is possible to competently manage services in the public sector if the culture to actually do something is present (as opposed to the culture of pretending the problem isn't there if you throw it over the fence).

    If you want better services, then, the very first question should be about how those services are managed and delivered and how this can be improved in practice, not on whether the private sector offers a magic wand to possibly (or possibly not) deal with the "problem".

    Oh, and the American punditry on "socialism" and "liberalism" is reminiscent of that person who shows up in some Internet forum and after only five minutes soaking up the conversation lays it all out for everyone else, despite having vastly less experience than everyone else on the topic in question.

  8. As I see it, Fortuyn was not shot for the way he voiced his opinion, but for the actual implications of his ideas. He challenged the notion that an elite should decide what is best for the people, he was adamant in his opinion that freedom should extend equally to all persons (modernity vs. fundamentalist islam) and he challenged the welfare industry built around immigration (left church).

    Sadly, we missed the opportunity to make drastic changes to cut costs and make improvements. Merely moving around money does not help at all. Removing money from education and still proclaiming to build the no.1 knowledge economy, really suggests an cynical sense of humor.

  9. > Merely moving around money does not help at all. Removing money from education and still proclaiming to build the no.1 knowledge economy, really suggests an cynical sense of humor.

    Well said. The examples I've seen were going downwards w.r.t. the quality of education. Or money being spent on upper layers of the organization. #1 knowledge economy my ass. :p

  10. Can't we just get rid of politicians already and move to an open source society? Come on people - get with the program! :)

  11. One irony of the current debate in the US is that conservatives and supposed moderates are against the public option, liberals are for it. However the public option is projected to save a couple hundred billion dollars.

    Its one of those time where liberals are the fiscal conservatives. When thats the case the liberals are freakin' right. :)

    The debate over the public option going on in the US right now is pretty dang irrational.

    As far as companies being more efficient... I guess you must work with some great companies. I see at lot of waste in any large institution I've ever worked with. :)

  12. @Paul with the health care debate, the benefits of the free market are purely theoretical since (in the US) a free market in health care doesn't exist. In some states one insurance company has 99% of the non-Medicare market. That means that more or less the prices are dedicated to hospitals by that company and the government.

    The most you can hope for is a government-sponsored free market sandbox, with competition over a subset of health services.

  13. "what are the costs of an immigrant for society"


    Immigrants generally benefit societies, especially Western European and North American ones with low birth rates. Ah Europe - the grass and gardens look green, but it's all a walled garden.


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