Consider the Veteran’s Administration scandal. Over the past few weeks, we’ve found out that some veterans had to wait months for medical attention and to see doctors, that some had died while waiting, that whistleblowers were ignored, fired or transferred, and that bureaucrats and administrators fabricated records in order to cover up the unacceptably long wait times and to demonstrate that they were being responsive to complaints.
Apart from the tragedy and outrage regarding such shoddy treatment of those who volunteered to put themselves in harm’s way for the benefit of the nation, a very important lesson to take away from this is that a monopolized government service, no matter how nobly intended, is only as good and functional as the people who are in charge are competent, attentive and active in its management. Of all those adjectives, “active” is the most important. Laziness, distraction, dishonesty, apathy and incompetence must not only be detected by supervisors, but those supervisors must both act upon them and honestly report to their supervisors of failings. They must do so in the face of conflicting pressures, pressures that may include putting themselves at risk for the failures of their subordinates and having to narc out long-time friends, colleagues and loyal underlings, pressures that derive from self-interest. Higher-level supervisors and managers who recognize these conflicts will need alternate avenues of assessment and information gathering, which might include audits, data analysis, whistle-blower mechanisms, and so forth. In such organizations, someone’s got to be paying attention all the time in the face of others whose self-interest means they have everything to gain by hiding from that attention.
Contrast this with a free and competitive market for a service. If a service provider doesn’t do a good job, the consumer can simply move on to someone else. If that provider drops the ball, the consumer can move on again. If there isn’t sufficient quality service to satisfy consumers’ demands, some will figure that out and provide that service. All the players act in their own self-interests, and while each player is by definition active in either seeking or providing a service, there’s no one outside or above the market who needs to be active to ensure the market functions. The market itself is passive in that fashion, with results arising spontaneously. There no need for a wise, attentive and competent boss running the show. There’s no need for someone at the tiller.
Does this passive pressure on the market players generate perfect results? Certainly not – there are no utopias, there will always be failures, and consumers who have the bad fortune to seek services from sub-standard producers won’t fare as well as consumers who connect with the best. But, over time, overall quality will improve, without outside guidance, simply because market players will act in their own best interests.
The solution offered up for the VA scandal is pretty simple – provide vouchers to veterans so they can seek medical care from hospitals and doctors outside the VA system. It’s certainly not a perfect market solution, but it does introduce market forces where none existed before. It reduces the need for active oversight of the overall system and replaces it with the passive pressure generated by many consumers and many providers acting in their own self interests.
The lesson drawn from this scandal is applicable to all sorts of government services, including public education (school choice, vouchers, charter schools, backpack funding, etc), Medicare/Medicaid (e.g. block grants to the states), heck, even first class mail and the USPS. The quality of the goods and services provided by government monopolies is entirely dependent on the competence, energy, focus and good will of those who run and work for them. Someone has to constantly pay attention and constantly fight conflicting and counterproductive forces from within. By contrast, any competitive marketplace fights those conflicting and counterproductive elements passively – no one needs to pay attention.
Keep that in mind when ObamaCare finally implodes and some demand it be replaced with government-provided health care.
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