One Salient Oversight on the Government versus the Private Industry

Here is something I’ve stated before – but never this well – by One Salient Oversight:

Even when faced with inefficiency and clear evidence that a certain way of doing things may result in bad outcomes, adherents to these extreme ideologies will nevertheless argue that the price that must be paid for being ideologically pure is worth it.

This was the problem in the Soviet Union when it became clear that a centrally planned industrial sector did not provide a high enough quality of life for Soviet citizens. One of the debates that ensued in the late 1970s and early 1980s within the Soviet Communist party was whether it was better to, say, relax some communist rules and allow some private property or private businesses, or to keep the entire system ideologically pure. After all, if you allow the formation of a profit-making class, wouldn’t that reverse the worker’s revolution that they had fought for so long ago?

This is also the problem amongst “drown the government” types. One of the debates in the US at the moment is the state of the health care system which is dominated by the profit-making private sector, which gobbles up around 15% of GDP and results in health outcomes inferior to nations with universal health care. Would it be appropriate to, say, nationalise hospitals and health care in order to provide a taxpayer-funded universal health care system, or would it be better to have these inferior outcomes while remaining ideologically pure? After all, if you allowed universal health care, surely you are allowing the government more power, which is one step away from a descent into fascism and an Orwellian state?

Fortunately in a modern society such ideological purists are small in number, both on the left and on the right. My political position is simply one of pragmatism – whichever is the most efficient variation for a particular economic sector, that should be the variation chosen.

The reason why I italicised “for a particular economic sector” is that ideologues – even centrists – tend to lump the entire economy into one of the variations I have listed. Communists would argue for variation i) in everything, government drowners would argue for variation v) for everything, while ill-informed centrists might argue for variation ix) in everything.

[note from cactus… the variations of which he speaks are mentioned earlier in his post but left out of this excerpt for brevity]

The reality is that there are sectors of the economy which are best left alone by government, and there are sectors that are best left alone by private industry, and there are sectors of the economy which exist in between.

Rather than engaging in ideological battles, governments must seriously consider adjusting every single part of the economy to find out which variation is the most efficient and is the best for the majority of people.