The Privatization of Public Services

Privatization is the only hope for renewal of once proud cities, writes John Chapman. In his 1944 book entitled Bureaucracy, Mises distinguished between “bureaucratic management” and “profit management.” He explained that neither incentives nor exploitation of useful information are optimal under bureaucratic management, and by definition there could be no rational calculation via profit and loss. Hence, coordination of resources will never be optimally efficient. That is to say, it is in the very nature of government management (bureaucracy) that it will be inefficient, and prone to corruption. Conversely, after privatization, operations and cost efficiencies improve because once incentives are in place and aligned, and people are empowered and incited (by the lure of profit) to utilize “particular knowledge” of markets, methods, competitive conditions, et al., performance improves.

Government Property Is Not Really “Public” Property

If you want to expose the absurdity of the state, think governmental accounting. Really, there is no better way to show the impossibility of a government solution to scarcity than by reading the annual audit of any governmental entity.

Goethe considered double-entry bookkeeping — the essence of accounting — to be “one of the finest inventions of the human mind.” For without accounting, we lose the ability to calculate, and without the ability to calculate, modern civilization is impossible.

Those Garrett Novels

Regular readers know how nuts I am for the novels of Garet Garrett. I can’t even chose among them, they are all so great. To my mind they should be NYT bestsellers. They constitute a major discovery in a hugely important genre: capitalist fiction. I say capitalist but they are not self-consciously so. They are just good stories that put a love of commercial life at the very core of the plot. So they make the reader come to appreciate the great contribution that enterprise makes to civilization.

Tax Rebates: Old Wine in Old Skins

Some 70 percent of economic growth over the past years was a result of consumption. Now that consumption is slowing down -- with lower retail expenditure during the Christmas season and dropping charges to credit cards -- a tax rebate will again fan consumption. It will not do a thing to increase savings, from which future investments can be made, writes Wolfgag Grassl.
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