A mountain full of donkeys

Fiscal conservatism 102

Here is my second article on fiscal conservatism. The goal of this series is to explain why I believe in fiscal conservatism and some of the thinking behind it. For fellow conservatives, this will seem obvious stuff. But our political opponents don't understand it at all. Maybe this can help. Links to the introduction and first article in this series are below.

Let's say you live next to a mountain that has some cabins on top, and you decide to start a business ferrying up people and their stuff to the cabins for vacations. You don't own the cabins (let's say they are owned by the federal government) but you establish your tour business on your own property near the North Slope of the base and hang out your shingle. You call your service North Slope Donkeys. Your angle is that donkeys will do the work and it will be fun for the kids.

No one is forced to use your service. They are free to vacation elsewhere, or they can walk up the mountain slogging their own gear. But for those who wish your service, it is available. (And that is important. One of the tenets of capitalism is the "willing buyer and seller." That is one of the things that keeps prices in check.)

Your service contributes to the economy. It is classified under tourism, and it increases the enjoyment of life for those who hire you. It turns a good vacation into a great vacation and people on vacation are willing to pay for that.

Now let's contrast this to the operation on the other side of the mountain. Once the federal government sees what you are doing, they decide to set up a competitive business on the South Slope. Everything is the same...hours of operation, number of donkeys, time to get to the top, etc. Their service is called South Slope Donkeys.

As a business owner, this would worry you off quite a bit, not just because someone stole your idea, but because the government is using tax dollars with an unlimited deep pocket to compete with you. The government should not be competing with private business. You invested your resources to start the business and now you are in danger of losing it because of unfair competition.


So you might ask, why should we insist that goods and services be created and sold in the private sector and not the government? As we watch the federal government take over more and more private functions, we hear people talk about inefficiency, waste, mismanagement, and corruption when government does things. How and why does this happen?

In business, the government has some obvious advantages. One is the presumption that you aren't being ripped off. This is one reason why government lotteries are so successful. You wouldn't trust an illegal betting operation to pay you a $10 million Megabucks jackpot.

So John, Mary, three kids and their grandma are driving to the mountain on vacation and they decide it would be fun to take the donkeys up. Their family of six also has a lot of gear. They decide to go to South Slope Donkeys and use the government service, because grandma is a senior citizen and the government's pricing provides it to grandma for free, so the trip would end up being less expensive than using the private service.

Unfortunately for them, there is a problem. Their group exceeds the quota that the government has created for donkeys to work that day.

It seems that one trip up the mountain per day is what a donkey should be doing, and all the donkeys that have returned have already been up and back. There are five staffers and guides in the hut to deliver the news. (It is 4 pm and the office is open until 5.)

John pleads for help, but there is nothing the government employees can do. Rules are rules. If the employees bend the rules and get caught, their livelihood could be affected. They might lose their pension over a "cruelty to animals" charge. It simply isn't worth the risk to help the vacationers out. There is no "upside" and a huge "downside."

"Even if we had the donkeys, we'd have another problem and that is the time. No one is scheduled to work this evening and whoever took you up wouldn't be back before 7 pm. All of our shifts end at 5 or 6."

As far as the potential lost revenue is concerned, no problem. Their quota has been met that day since all the donkeys went up the mountain so everything is fine. But, of course, John and Mary's vacation may be ruined. That's not their concern, although they feel bad.

Maybe the other service is still open, wonders Mary. Do they have time perhaps to drive to the North Slope? One government employee helpfully makes a call and gets the North Slope Donkey owner on the line. "Send them over, we will see what we can do," he says.

So the group drives around the mountain and arrives at 5:15. But the owner has kept the office open because he wants to earn another sale that day, if he can. Putting in extra time is routine for those at North Slope Donkeys.

He looks over the six of them and all the gear piled up on top of the SUV. "It's gonna be tight," he says.

All of his donkeys have also made a trip up the mountain that day, but three of them didn't carry any heavy gear. He knows they can make another trip without harm. He tries not to have them go up more than once per day, but he needs to make an exception in this case, otherwise the family's vacation will be ruined and he will miss a sale.

"We can't carry you all, but we can take the gear and grandma up on the donkeys and if the rest of you can hike up, it shouldn't take more than two hours. The weather is fine, there is plenty of light for another three hours, and we will be with you the entire way so there is no danger.

"I know the kids wanted to ride the donkeys, so here is what I can do. Tomorrow morning, when I take the next group up, we can arrange some free donkey rides at the top for the kids," the owner says.

"The walk up the mountain without gear will be lovely," says Mary.

"And there are hot showers on top when you arrive," says the owner.

"Thanks so much for helping us. We really appreciate it," John and Mary say. They pay for the three donkey rides and include a big tip for the extra effort. "This is the best vacation ever," says one of the kids.

I'm sure you are not surprised at this story. Of course, the capitalist system solved the problem while the government system couldn't. If you are not a fiscal conservative and are not surprised, then you need to rethink your philosophical position.

Even if government employees are being as helpful as they can be, there are rules that must be followed. The private sector will almost always do a better job, create more commerce, and provide a better service when it is allowed to do so. It solves problems so parties can do business, rather than follow bureaucratic rules and regulations which have admirable goals but mostly just increase inefficiency.

And that is why conservatives prefer as much private enterprise as possible.

The reason Republicans are against programs like Obamacare is because having the public sector try to run healthcare is going to lead to inefficiencies and many worse outcomes, including things we can't anticipate. On the other side, we have private enterprise, which uses the profit motive to create services. The profit motive can lead to greed, but that can be held in check through competition.

Our country should be embracing capitalism which creates jobs and grows the economy, rather than having government try to duplicate what the private sector can do much better.

PART FOUR: http://www.actonforum.com/blogs/allenn/you-didnt-build-those-cabins


PART ONE (Introduction): http://www.actonforum.com/blogs/allenn/political-philosophy-fiscal-conse...

PART TWO: http://www.actonforum.com/blogs/allenn/free-100-bills

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