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Comment by davidktr | Hacker News Reader

You obviously have not been around non-profit, government run entities. The waste they create, the inefficiency inherent in such enterprises is terrifying.

Yesterday I looked at a huge box full of perfectly fine laptops and monitors we will scrape because selling them or even giving them away would be inconvenient.

At the same time, I have to pay parts of a business trip out of my own pocket because I chose not to fly but to take the train. The best part: My trip was CHEAPER than flying. But it was out of regulation, so tough luck.

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To be honest - and this applies to every such story I've heard - it's exactly the same in large corporations.

Turns out, it's really not about government vs. free market. It's about size. The larger an org is, the more bureaucracy it has and the more stakeholders are involved. Eventually, you get this weird inversion of priorities that seems to defy common sense. But it's all locally rational - a corporation or a government both can trash a shipping container full of brand new computers, because doing it is cheaper than selling them, or than any other alternative, once the (real or perceived) process costs get accounted for. Or, maybe it's globally optimal to sell them, but since all the gains go to organization as a whole, while all the risk (financial, legal, operational) is concentrated on whoever coordinates the sale, no one is suicidal enough to try.

> You obviously have not been around non-profit, government run entities. The waste they create, the inefficiency inherent in such enterprises is terrifying.

I have been wondering recently about the value of a market-based approach has to exceed the waste and inefficiency of government entities, and whether it's always better to have government do things in those cases.

I don't have a lot of data on this yet other than really high level things (e.g., the cost of healthcare in the US being very high compared to other approaches), but it seems likely to me that having a single entity coordinating things is going to be more efficient under most circumstances - even accounting for the waste - once you remove the market challenges.

e.g. I think about this a lot in our local energy market while prices are sky-rocketing and I'm seeing useless ads everywhere. Simply removing the cost of advertising/marketing/CaC would drop prices significantly in many markets. It's regulated out the ass anyway so there is basically no real competition outside of pricing shenanigans and complexity to confuse consumers, so there is very little advantage to it pretending to be a 'market'.

It's just a huge play to enrich shareholders at the expense of citizens and offers very little benefit. A single entity, even if it was very (almost spectacularly) wasteful seems like it would probably be less expensive.

> whether it's always better to have government do things in those cases.

if there's gonna be waste, i don't want my tax dollars to be wasted. I don't care if private dollars are wasted, since it's not me taking the hit.

> if there's gonna be waste, i don't want my tax dollars to be wasted. I don't care if private dollars are wasted, since it's not me taking the hit.

Well, it depends on what it is - if it's a service that you consume, even indirectly, you /are/ taking the hit, because the price you pay will reflect the costs of the company providing the service.

Using the example of energy again - if you're in a place where the energy production is fully privatised, any waste that happens there might impact shareholders more, but you can absolutely bet some of it will be felt by customers.

I have bad news for you: in a for-profit property market with increasing margins your money are effectively wasted, because the higher the prices, the more employees in the public sector pay. To fill the vacancies government has to pay more and more, effectively redistributing your money to landlords and construction industry. Inefficiency of this spending is much higher than that of any state-owned enterprise.

> because the higher the prices, the more employees in the public sector pay

i dont' quite get the rationale for this claim - are you saying that higher property prices somehow increases public sector pay? And why is public sector job vacancy have anything to do with the price of real estate?

According to the recent data of Berlin government, high property prices and scarcity of affordable apartments are one of the reasons for labor shortage in public sector here. In order to fill the vacancies they need to significantly increase the salaries increasing burden for taxpayers. IMO causal link here is pretty obvious: if a teacher cannot afford living in the city, they won’t work in that city as teachers and either find a different job or leave. The same thing is happening everywhere in the world, where teacher or social salaries aren’t high enough.

have you ever been around a for-profit, privately run entity?

Your experience at a big company in those two scenarios will likely be no different.

If SOE wastes 10% of the budget but still delivers on the market where profit margins are over 20%, it will still be more efficient in reaching the goal of affordable and abundant housing than private investors.

The overhead for public Healthcare in my country is 18 to 23%. Ie each time you pay 100 euros, 83 to 77 are paid to Healthcare providers, and the rest is paid to bureaucrats and administrators.

Each 100 euros I give to Swisslife, 65 are going to Healthcare providers.

I don't mean to invalidate your experience, but we ought to be better when talking about inefficiencies. I really find it odd that each time no numbers are provided.

Whereas at a company, the equipment would be destroyed because it checks a box on some asinine security requirement.

Or because it would be inconvenient.

For a larger company, the bureaucracy may be thick enough that even if you'd find a soul brave enough (read: suicidal) to push for the initiative, by the time it's set up and verified to fulfill every relevant rule, bylaw, as well as the law, organizing the sale costed the company more than it stands to profit from it.

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