Darrell Berkheimer: A myth about government socialism
I frequently hear myths about what government can or can’t do.
As one example, perhaps you have heard the comment that government couldn’t even run a candy store right.
That statement is made as part of a claim that the free market can provide better services cheaper, more efficiently than the government.
If you believe that myth, I have some ocean front property in Arizona to sell you.
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And I can already hear the next statement coming:
“Oh, so you want socialism? Socialism is bad!”
Well, if socialism is so bad, why do we have so much of it?
Someone I know wrote a column on socialism several years ago. He wrote:
“So, we have socialized retirement, socialized education, socialized mail, socialized trains, socialized highways, and in some places even socialized trash pickup.
“We have socialized money, socialized police, socialized military with its own socialized health care, socialized health care for the elderly, and some tender strands of socialized health care for children. …
“As far as bogeymen go, this one is awfully familiar. We get along just fine with ‘socialism,’ actually.”
So your next comment might be:
“Yeah, but businesses and the free market probably can provide those services better and cheaper.”
Could they really? I doubt that.
For instance, let’s consider all those contracts that governments award for construction projects. How often do those projects over-run the corporate cost estimates – and by enormous amounts? And take a look at the massive corporate over-runs on some military projects.
Now let’s consider a few other aspects of corporate operations that government critics ignore. Corporations have some immense expenses that governments don’t have.
Number one: Governments do not need to operate at a profit. They do not need to pay exhorbitant or outrageous salaries and bonuses to CEOs and CFOs. Nor do they need to pay stockholder dividends and members of a board of directors.
Number two: Governments do not need to pay income taxes.
Number three: Governments do not need to pay millions or billions of dollars on advertising and marketing, or commisions to sales agents. Think about the billions spent by insurance and drug companies as examples.
Number four: Governments do not need to pay lobbyists.
And number five: Governments can borrow money at cheaper rates than businesses.
So how is it that corporations and businesses can absorb all those additional expenses and still provide equivalent services for cheaper?
The real answer is: They can’t.
When they try, they cut corners. And some people, or agencies, who should qualify for services are either denied service, or are not provided all that they should receive.
Doesn’t it make sense that if monies must go to a CEO, directors, stockholders, agents, taxes, marketing and lobbyists, then those amounts can’t go to providing services?
And finally, I don’t want to overlook the claim that government provides more opportunities for fraud and waste.
Does anyone really believe that big corporations don’t have fraud and waste?
Of course they do. But people don’t hear about it as much – partly because it’s kept private; and partly because the news media is much more engaged in serving as a watchdog over the use of taxpayers’ monies.
Yes, it’s true that government agencies will spend almost all the money in their budgets each year – even if they don’t need it all – just so they can request as much or more for the next budget year.
That’s what bureaucracies tend to do.
And why should anyone think that corporation bureaucracies don’t do the same thing?
Finally, I must admit that many small businesses do operate more efficiently than government. And small businesses are more deserving of lower tax rates, and much more deserving of tax incentives than the big corporations who outsource major portions of their production.
But to compare governments with small businesses is like comparing watermelons with cherries.
So when it comes to needed social services – such as retirement, education, transportation, health care, the military, police and fire fighting – it’s just as incorrect to compare government with corporations, like comparing apples with oranges.
Looking to the other side of the coin, however, I think corporations and businesses usually will be better at manufacturing products and spawning innovative technology.
So I guess it’s appropriate to say government should not be operating a candy store.
The bottom line, then, is this: Businesses will shine at what they can do best, but governments are the better provider for our social needs. And we are long overdue to add universal health care to that list.
Darrell Berkheimer, who lives in Grass Valley, writes a biweekly column published Saturdays by The Union. Contact him at email@example.com.
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