July 9th, 2008

Inertia vs. Incentive—The Goverment Conundrum


photo credit: Civisi

The Sutherland Institute hosted a blogger breakfast this morning and invited Spanish Fork Mayor Joe Thomas to speak about his experience in government and some of the challenges he has seen during his time in office. Mayor Thomas’ remarks highlighted several struggles he has had in combating inertia in government.

The problems that Thomas described sounded like classic case examples of protectionism, wherein government agents create a security net around their job such that they are guaranteed employment regardless of their efforts. In this situation, government abandons free market principles to introduce monopolistic safeguards for themselves and their successors. When this happens (and it happens in nearly all government entities), Bastiat’s words ring ever more true:

Government is that great fiction, through which everybody endeavors to live at the expense of everybody else. (Frédéric Bastiat, Economic Sophisms, p. 99)

Without competition, government becomes indolent and inertia drives all operations towards a status-quo level of mediocrity. Few incentives exist in such an environment to innovate, take risk, and work hard. With a legislatively guaranteed paycheck, the government worker can rest easy, free from the fear that exists in a free market to create goods and services faster, cheaper, and better than the next guy.

What, then, is the solution? Mayor Thomas proposed that government needs more leaders, instead of managers. He hopes for more people who can think outside of the box, drive new initiatives and propose creative solutions. But the reality of the situation, sadly, is that there are few free market leaders who 1) desire to run for office, 2) stick to their principles after being elected, and 3) proactively seek for positive change. Additionally, government action often requires a majority vote, and principled and proactive leaders can easily be defeated by their protectionist colleagues.

The solution, as always, lies inherently in the people. We can easily boot out of office anybody who is usurping the system and not providing adequate service for the wages we pay them. If we remain at home on voting day or continue to be uninformed about the problems that need to be remedied, we will never be able to contribute to and work towards a solution. We reap what we sow, and that includes lazy, status-quo government employees who live off of our taxes.

There are always two forces at play in determining any given course of action: inertia and incentive. We can either ignore the problem and allow leech-like government workers to grow fat off of our hard work, or we can develop and promote proper incentives that will open up government services to competition, transparency, and accountability. Mayor Thomas is right: electing good leaders is one step. But that step cannot be taken until we do our homework and understand what the problem is, and who can provide a good solution.

14 Responses to “Inertia vs. Incentive—The Goverment Conundrum”

  1. Helaman
    July 9, 2008 at 2:49 pm #

    Let’s start at the top;

    Mayor Thomas is right: electing good leaders is one step

    We see what happens to good leaders, the majority don’t like them – like Ron Paul.

    Let me put my tinfoil hat on for a second, and the puppetmasters don’t like them either.

    But I think your still aiming too high;

    But that step cannot be taken until we do our homework and understand what the problem is, and who can provide a good solution.

    I think it starts with the people, there are those of us who aren’t spoon fed by the MSM, or who don’t spend hours upon hours in front of the boob tube but a majority do. They suck up everything that is spooned in from either side. Look at how they eat it, “Bomb Iran”, “Gun Restrictions”, etc…

    There is no incentive for the government to correct it self, and currently there is no real incentive for the common man to do anything either.

    I read a comment somewhere that explained why only students and the youth protest, because they have nothing to loose. Once the fat of America loose enough then you’ll have you incentive and inertia – of course I’m painting a pretty bleak forcast, but until then only the few will voice concern and the majority will still do nothing.

  2. Cameron
    July 9, 2008 at 3:27 pm #

    It’s not just voting, but voting in primaries and caucuses. It’s being in contact with local officials like Mayor Thomas and council members. That’s where the real decisions are made. Too many people are looking at the two remaining presidential candidates and thinking what’s the point of being involved when this is who my choices are.

  3. Sean
    July 9, 2008 at 4:16 pm #

    The leaders and candidates tend to be a reflection of the people as a whole. The place to start and to focus is on our on lives and homes. Then, working outwardly, each of us has talents that can be used to influence for good our communities and governments.

    I think the protective inertia you wrote of is present in all of us to some degree. We all have the ability to act out of love and faith, or out of fear. Fear leads to inertia and paranoia. Faith leads to learning and growth, even when mistakes are made. I have experienced both of these in my own life.

    But I digress; let me tie this back into your post. Government has the guns, makes the rules, and controls the purse strings (all subject to the approval of the people, of course). Therefore when individuals in government act out of fear and self-protection, they have some backing, and tend to be able to survive and sometimes even thrive in the short-term despite the inertia. Individuals or businesses in society and private enterprise don’t exhibit this phenomenon because they rise and fall, ebb and flow, on their own merits.

    On a side (but related) note, I think one reason the LDS Church leaders have spoken less in recent years about the Constitution and government is because of the heavy need to focus inwardly and change ourselves. I don’t think that changes our duty to uphold liberty and good government, but it may account for some of the general topic shift.

  4. Daniel
    July 10, 2008 at 5:59 am #

    Open question, because I don’t know.

    It seems logical that government jobs would be more secure than jobs in the corporate sector, but does evidence bear this out?

    I’ve had corporate jobs that were on the safe side (as long as you did a reasonably good job), and I’ve had government sector jobs (uni) that weren’t all that safe (because governments are always under pressure to cut the education budget).

    I’m wondering what information you’re working off of. Unless this post is intended to be a ‘rile-em-up’. Leech rhetoric and all.

  5. Connor
    July 10, 2008 at 9:26 am #

    Daniel,

    Here you go.

    Also note this statement on the website federaljobsearch.com:

    “Recession Proof” your career. Government employees enjoy unparalleled job security and career stability.

    Thought that was pretty funny. Or how about from workforamerica.com:

    United States Government jobs have long been considered among the most secure jobs available. Government employees’ jobs are protected by strict protocols, which means greater job security. So, once you get in, and if you do your job well, you’re pretty much there to stay.

    Or from the general manager of careerbuilder.com’s government services group:

    While today’s corporate jobs are more subject to downsizing, job security is one of the most noteworthy advantages of government employment. Though the government is known for its strict hierarchal structure and strict guidelines/procedures, these protocols protect your job from elimination. Thus, government jobs offer the luxury of planning for the future.

  6. Helaman
    July 10, 2008 at 9:45 am #

    Terrorism == job security

  7. July 10, 2008 at 11:07 am #

    I work for the local utility, which is basically a state-regulated monopoly. No major market pressure or stiff competition to deal with. I see laziness and lackluster effort all around…which makes me scared to death to imagine how some of the local government offices must run.

  8. Daniel
    July 10, 2008 at 8:18 pm #

    Thanks for the links, Connor.

    I noticed that these articles just tell us that people think government jobs are more secure. (I already knew that.) But I wonder if that’s really so, or if they’re just operating off the same perception we already have.

    I wonder how we could find out, beyond anecdotal evidence.

  9. Sean
    July 10, 2008 at 10:19 pm #

    Daniel,

    I think that would be pretty tough to measure. You’d have to control for job performance, job mobility, and other things that would be very difficult to measure across companies and the private/public spectrum.

  10. Daniel
    July 11, 2008 at 12:48 am #

    I know. I’ve been trying to think about a way to measure this, but it’s a tough one.

    Yet, despite the difficulty, people claim to know that it’s true.

    I guess things would be easier for me if I could not think about it too much and just claim with utter conviction that it’s so. But what can I say — I’m an empiricist.

  11. Sean
    July 11, 2008 at 8:08 am #

    You might check the Freakonomics blog. The writers like to examine and measure things that aren’t traditionally measured.

    I just finished the book Freakonomics yesterday. I like the thinking process the authors use, but I’m more cautious accepting all of their conclusions.

  12. July 11, 2008 at 10:31 pm #

    I thought that protectionism pretty much falls under the
    definition of “Bureaucracy.”

    Protectionism is endemic to corporate governments as well. For example, consider the fact that pay and compensation for corporate executives, in general has no
    correlation
    to the company’s performance.

    …..There are few free market leaders who 1) desire to run for office, 2) stick to their principles after being elected, and 3) proactively seek for positive change.

    This is because most normal, rational people realize that that power and authority come with an equal helping of responsibility, obligation, and especially risk.

    Effective leaders aren’t interested in power, as much as bringing to pass common goals.

    Whereas, In my opinion, those that actively seek power as an end in itself, have a self-reinforcing belief that power can somehow mitigate personal risk and responsibility. How ironic that avoiding personal risk is one of the reasons they want power in the first place.

    Without competition, government becomes indolent and inertia drives all operations towards a status-quo level……

    Actually, competition is is a very important force in a bureaucracy. Competition for jobs, moneys, promotions, the time and attention of superiors, etc. However, in a bureaucracy it’s possible to eliminate competition simply by signing a document, filling out a form, or making a few phone calls. (Yet another fiction of government: that pen and ink trumps real economic forces, e.g. the Drug Enforcement Agency.) Thus, useful work, innovation, and excellence don’t pay off, exploiting the system does.

  13. July 12, 2008 at 7:05 pm #

    I’m in city government (on the city council) and I add an AMEN to this post. The rest of the council has been in place for decades and talk about inertia. If I hear one more time, “Well, we’ve always done it this way.” I will SCREAM. But I am convinced that one person — just one person– can make a huge difference. I’ve been able to do so much even without council support. We got the meetings televised (“Oh, no one will watch.” Wrong answer – many, many do and it’s freaked them out.) I got the website revamped and interactive (And when the polling showed that over 2/3rd of the city got their information about the city from the net, they were floored.) Have held many town hall meetings with the rest of the council kicking and screaming and on and on.
    And it’s not just me. I’ve seen a 12-year old speak about about a tattoo business and get the project killed. I’ve seen an 8 year old speak and get a building project saved. I could go on and on.
    One person HAS A HUGE IMPACT. And it’s about time that WE are that one person. And it all starts at the local level and works its way up . . . .

  14. Helaman
    July 13, 2008 at 5:29 pm #

    How encouraging MOM!

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