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Comment by vonnik | Hacker News Reader

Rent-seeking regulatory capture shouldn't be called entrepreneurship at all. America's mania for privatizing government work does indeed encourage that form of rent-seeking, as does any other system in which a government awards contracts to private enterprise to get work done. One thing many businesspeople and founders (outside of Palantir) are unaware of is that a single government contract can be several orders of magnitude larger than their wildest revenue projections.

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This is true, but difficult to avoid in some form or another.

The Queen does not personally take away my rubbish, or lay the city water pipes. The government pays people to do that, and private contracting is one way of organising that. State-owned corporations (or whatever you want to call them) are other.

Sure there are opportunities for rent-extraction by contractors. But the same opportunities exist for bureaucratic empire builders and public-sector unions.

I'm fine with having public and private companies compete for services.

I'm pretty sure a government internet service would beat Comcast, and likely force all ISPs to up their game quickly.

Monopoly on contracts is my issue with purely a state-owned approach. Some well-run countries do seem to make it work though.

> I'm pretty sure a government internet service would beat Comcast, and likely force all ISPs to up their game quickly.

the point is that if it were only a gov't service, that ISP would be just as bad as comcast. The problem is not due to it being gov't or not, but due to lack of competition!

I'm not sure that this is absolutely true - in the American experience it has been a consistent experience; but in other countries there have been state owned monopolies that blow Comcast out of the water.

so what's the difference? is it the same reason as why healthcare sucks in america?

Regulatory capture and ineffectual politicians. If politicians pay no heed to the civil service, the civil service has no impetus to improve.

There are some successful state-owned corporations, but it's definitely an exception to the rule.

Competition is not the only feedback loop. With public companies, they're also subject to the usual democratic channels - sometimes less directly, but still. With private companies, you only get that as a shareholder, and even then in practice you have a few people holding the controlling stock.

Have there been any private but cooperatively-owned ISPs, like a credit union? That seems like another possible solution.

Government would beat Comcast? I would really have to see some data before I’d be convinced of that. You must have some really strong faith in government but there is nothing in my experience that would suggest a government entity would have any incentive to actually be good at anything.

I understand the US military is considered good, and not just because it's huge and has a lot of money to spend. I'm told the competence of the individuals involved tends to be higher than many other militaries.

Sure, it's just one data point.

Comparing to other national militaries isn't meaningful. How does their effectiveness compare to private companies that do the same kind of thing, e.g. Blackwater or whatever they're called now?

Well, there is a reason Blackwater changed its name.

Most mercenaries are usually formally trained by an elite government military.

US government military is so much better. Skill fade is brutal. The US military spends a fortune training and exercising and refreshing and retraining, over and over. Mercenary companies simply don't have the funding or facilities to do the same.

Typically, the employees are contractors. Some of them might still be in date for some of their professional qualifications, some of them might be years or even decades from their last professional military refresher. I'm sure they can get by swapping tips and visiting gunranges, but it can't compare to spending nine months of the year on exercise or deployment.

I hate Comcast as much as the next guy, but I would never choose a government service over them. There is only a few things the government is competent at and one of those is war. But even that is being hugely supported by private companies like Lockheed and Boeing.

How many wars has the government won lately?

Yes but in this case the government's own estimation on doing the work itself sets a bar. Also sufficiently bidding out work drives prices down by competition if the contractors aren't conspiring against the public. Big if.

I think it would be a better like a dutch auction with a twist.

Regulation should determine the minimum number of competitors a market should have (N).

Say there are 5 companies bidding for service (each targeting 1/N of the market).

* 100 for 1/N

* 120 for 1/N

* 125 for 1/N

* 150 for 1/N

* 200 for 1/N

The lowest N bids win, the less expensive winners receive some percentage of the difference between the highest rate and their rate as a bonus. (Which could be 100%, could be 0%, I feel 1/N % is fair)

I also think that N should be targeted based on the type of work. Things which require /many/ bodies, like utilities, construction/repair, etc should favor far more successful businesses within a market. Things that require more substantial investment of resources should be more tightly regulated; vertical and horizontal integration (but not public feedback loops such as 'it would be really beneficial if your processes were nicer for this type of target') should be broken up where-ever possible.

Most crucially the regulating bodies should be thin. They should have extremely clear mission statements. They should also be directly accountable to, and elected by, the public. That process should not have the defects of today's elections, no artificial sub-regional representation and no pre-election filtering of choices (other than, perhaps, a minimum signature requirement to get /on/ the ballot).

Every person I've know who has been involved in government contracting has basically said it's a giant scam, and a giveway to certain corporate interests.

Basically we all know the government is not as efficient as the private sector at performing lots of tasks. It turns out the government is especially bad at contracting out large government services.

She does however, protect the swans. Not sure where I'm going with this #beer

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