Equifax vs Cassini

Carson Chow Economics, government

The tired trope from free market exponents is that private enterprise is agile, efficient, and competent, while government is prodding, incompetent, and wasteful. The argument is that because companies must survive in a competitive environment they are always striving to improve and gain an edge against their competitors. Yet history and recent events seem to indicate otherwise. The best strategy in capitalism seems to be to gain monopoly power and extract rent. While Equifax was busy covering up their malfeasance instead of trying to fix things for everyone they harmed, Cassini ended a brilliantly successful mission to explore Saturn. The contrast couldn’t have been greater if it was staged. The so-called incompetent government has given us moon landings, the internet, and built two Voyager spacecraft that have lasted 40 years and have now exited the Solar system into interstellar space. There is no better run organization than JPL. Each day at NIH, a government facility, I get to interact with effective and competent people who are trying to do good in the world. I think it’s time to update the government is the problem meme.

8 thoughts on “Equifax vs Cassini”

  1. I think the prefection of the free market has been proven many times. (eg see SMD theorem or sonnenchein -mantel-debrue). (sonnenchein was presdient of U chicago too. Malliaris of UC with Shelah recently got a prize for some result p=t in PNAS about infinity. Kadanoff, Wilson, and Jack Cowan were also at UC and may still be).
    i had a relative there in music wrote a book ‘meanng and information theory in music’.

    Prominent economists —eg David Friedman (son of milton–the writer), with a PhD in physics, Bryan Caplan at GMU , mercatus center—show it would be better if government were replaced by anarcho-capitalism (if you want a country, military, police, or roads or science don’t ask someone to give you ‘free stuff’ (welfare) just DIY. )
    The whole econ and law depts at GMU and Mercatus ctr show why free markets are best—the people who are in those depts otherwise couldnt have a job so instead we have a govt supported market failure.

    I guess one could say Tyler Cowan of GMU writes good restaurant guides if you can afford them. (i’m doing a PhD in writing restaruant guides—i do it from first principles. start with a stochastic lagrangian.).

    Most reasonable people don’t believe there was any cassini or moon landings. The night sky is created in observatories using technology. Friedman (static) universe Thats just superstition . https://arxiv.org/abs/1309.1019 Rush Limbaugh— a competent news source— also pointed out there was no hurricanes in florida—thats just fake news. (If there was one then mostly likely it was an ‘inside job’ –probably geoengineered by NOAA.)

    perhaps the most succesful govt programs were Trump, Robert Mcnmara and vietnam war.

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  2. https://arxiv.org/abs/1308.1019 arxiv shows why NSF funded science is innneficient. they can’t even put in the correct urls. in a free market every url or web site you type in is correct. and watches always have exact if only 2 times a day.
    and because watches like markets are continuous and adjusting –no frictions–adibiatic processes–(none of those ‘quantum jumps’–see schrodinger ‘what is life’) you can adjust them to make sure you are never late.a dollar is always a dollar (robert lucas, rational expectations noble prize from UC) and there’s never involuntary or other unemployment –can’t exist—and you can’t devalue the dollar compared to the euro or yen or reverse and you’ll never find one on the ground.

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  3. Us free marketers don’t argue perfection of the free markets just relative performance to the government. We would only argue that the if the government was running Equifax then the problems would be worse than they are now and that if the private sector ran space exploration than the successes would be greater than are now.

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  4. It is obvious to any of us who have spent time in government and spent time in the private sector that government runs far more smoothly and efficiently than the vast majority of private-sector organizations. This fact is in spite of the incompetence of the political people at the top (the most incompetent ones come from “successful” businesses). Criticism of government comes from two places: 1) ignorance 2) pathological self-interest.

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  5. @kevin Well, I was affected by the OPM breech a few years ago and they immediately addressed the problem and set about rectifying the situation. I still can’t get the link Equifax sent me to work.

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  6. Do your examples show efficiency of government in allocating goods and services, or are your examples in the areas that are not mandatory for a functioning economy?

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  7. It seems to me that the example involving free enterprise vs govt enterprise omits consideration of crucial differences. First, scientific achievements in space do not have to earn a profit to persist; businesses do. Second, the former usually has little or no competition; the latter usually does, and that affects longevity too. Third, the former, while often bold and having to overcome as yet unsolved problems, depends on good theory (scientific theory); the latter, when concerned with human problems often lacks good theory. Fourth, when govt ventures into areas lacking good theory, if often performs poorly; thus, govt policy during the early days of the civil rights era was often characterized as throwing money at problems even by those who were doing the throwing. Fifth, govt is often handicapped by political considerations (as private enterprise can be too), and so will compromise on or avoid a theory very likely to work, in favor of a theory unlikely to work but more acceptable politically. There are no end of examples here, for those who know the science, in the field of trying to close gaps in educational achievement, many of which can be characterized as a form of cheating (say by overlooking self-selection of subjects by IQ instead of using the gold standard of random assignment to treatments). The entire Lysenko episode in the old USSR would be an example from the natural sciences; the great Nikolai Vavilov was sentenced to death for not following the party line in genetics, and died in prison of starvation in 1943. Private enterprise is less monolithic about taking chances and enforcing pet theories. Sixth, for truly heroic large-scale undertakings with lots of unknowns, govt, especially in a rich nation such as the US, has the advantage of deeper pockets–consider the Manhattan Project during World War II. Admiral Leahy, a powerful advisor to FDR and then Truman, assured Truman, based on the Admiral’s vast experience with explosives, that the atomic bomb would never work. Truman, a layman, but one who had been an artillery officer during World War I, ignored him. Had Leahy been president, we may have had to invade Japan, which would have become a large scale version of Iwo Jima and Okinawa. Finally, but probably not exhaustively, capitalist economics has long recognized the advantage of govt in providing public services such as a postal system, fire fighters, police, and military protection, needs which would not be met well or generally enough by private enterprise. Some scientific achievements, such as reaching the moon, conform more to the public service model than to models handled better by private enterprise. It would be nice if natural scientists considered some of these points before declaring for govt over free enterprise.

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