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Comment by stanfordkid | Hacker News Reader

The problem is that the metrics are wrong... government organizations should be run like businesses, but the ways in which people are measured and rewarded should not be profitability, but impact. Businesses that are run to maximize revenue seldom do it... instead they make bad short term decisions. Businesses that use metrics like engagement and satisfaction as maximization criterion, inevitably maximize revenue as a side-effect. The same should be applied to government -- even more so.

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This makes sense in some cases, but there are several functions of government that are fundamentally money-losing prospects that wouldn't change when optimizing for impact. I agree that the metrics around government efficacy can be improved, but arguing that increasing impact will always or almost always lead to profitability isn't feasible in many government cases. The fear I have with such an approach is that if governments indirectly promise profitability via maximizing impact and they fail, then you still have the same problem you started with.

A perfect example of a project that will only ever lose money but is very important to the public is the Hanford Nuclear site[0]. The US government discovered recently that the nuclear waste site was leaking radioactive chemicals and threatening to taint the Columbia River water supply, which millions depend on. Cleaning up the radioactive waste will cost tens to hundreds of billions, and the best possible outcome is that everyone still gets clean drinking water. That should be the most desirable outcome, but even if successful, the government won't generate a profit from it, nor should they. Utilities shouldn't be priced to be profitable, they should be priced to be sustaining and accessible to those who need them.

0: https://en.wikipedia.org/wiki/Hanford_Site

Yes. There should be metrics around how effectively such a disaster is cleaned up. Profitability is not the only thing that is a metric -- as I stated in my original post.

> government organizations should be run like businesses, but the ways in which people are measured and rewarded should not be profitability, but impact.

"Impact" can't be tied too strongly to number of people affected because one of the things governments do is take on jobs which must be done but which are unprofitable because too few people need them done to make it into a market. This should be obvious, but it's also obvious that "number of people" is a really easy thing to measure, so, like the drunk looking for her car keys under the streetlight because the light is better, all organizations tend to build metrics on top of the data that's easiest to get at.

Impact of what metric though? If one of the metrics they are trying to maximize is something like "Number of fugitives making their court date" then they are still going to make private data available for bounty hunters and their affiliates.

Preach.

Peter Drucker, in the 90s, encouraged businesses to emulate non-profit organizations. He was popularizing case studies which showed some of the most effective, efficient orgs in the world were non-profits.

From wiki:

"The importance of the nonprofit sector,[35] which he calls the third sector (private sector and the Government sector being the first two). Non-Government Organizations (NGOs) play crucial roles in the economies of countries around the world."

https://en.wikipedia.org/wiki/Peter_Drucker#Key_ideas

I like your use of "metrics". I usually frame market design in terms of "incentives", but I might adopt your frame.

Price discovery and surplus (profit) are not the only possible metrics. Markets can, and have been, designed to optimize pretty much every other conceivable goal as well.

But the thrall of corporatism (aka Freedom Markets™) keeps those alternatives out of public discourse. Anything not optimized for surplus (profit) is dismissed with pejoratives like socialism.

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