Why not let the government do it?

Fiscal Conservatism 108

I'm sure many people implicitly trust the government. But our founding fathers did not, and neither do I.

Like corporations, the government is made up of people. Most people are not evil. They don't personally seek anyone's harm.

But governments have all sorts of justifications for abuse of power and it is very hard to punish those responsible, which might curb some of the abuses. So we have an IRS which is targeting conservative and religious groups for harassment as just one example.

Corporations produce goods or services which are voluntary to buy. If you don't like a corporation for some reason, don't buy their product. But governments do things that compel our participation through taxation.

We know that power corrupts, and the government has a lot of power. And people who are put into positions of high leadership have even more power. And sometimes that power goes to one's head. So the fact that government has the power to expand its reach does not make it right, and I believe we should oppose over-expansion of government on principle.

In a previous article, I discussed two services offered, one government and one private, and tried to show why the private service would be superior. In this article, I want to discuss the other side of that coin, which is the public's right not to purchase things.

Why would the government expand its power to new areas? Because it can. Evidently that's what legislators do. And, frankly, they have their reasons, however faulty they may be. But we don't need to understand them. The expansion of government should be opposed on philosophical grounds. The only expansion that should be approved is for goods or services that only a government must provide. In other words, government intervention in the free market should be the last resort.

An example of a good government service is issuing passports. It isn't cheap or fast, but it is necessary for national security, which cleary is in the government-function realm.

But let's say the government decided to takeover the private airline industry and make this a government-run service. In my mind, this is a much shorter leap than, say, having the government take over the private health insurance industry.

Running an airline is very risky and expensive, so for the sake of argument, let's assume that the government uses our tax dollars to start their own carrier with subsidized ticket prices. Even if you take into account the inefficiency of government-run services, low-cost travel would probably win out in the short run and all the private carriers would disappear.

So what's wrong with the government providing low-cost travel all around the country? It would be safe (perhaps safer than air travel now is), it would save money for flyers, and it would generate financial efficiencies by eliminating the duplication that now exists in the private market. And the government could argue that people should have a right to be able to move about the country and use that as a justification to take this step.

Costs would increase

As a rule, government-run systems are much more costly than privately run systems. The "savings" that would be seen through "publicization" of the airlines would be elusive. The government is not designed to provide the best service at the lowest cost. It is designed to provide a non-competitive service and motivates its employees through salaries and benefits, not through profit-sharing and equity. Over time, we would see a bloated bureaucracy, lots of underfunded liabilities like pensions and healthcare costs, and high operating costs.

We would also see a poor allocation of resources. The government would not be efficient in deciding which routes to travel, how often, and what to charge. After all, their goal is service, not maximizing profit. And service could including going to Podunk because a Congressman wants an airport in his district.

Since government bureaucrats aren't spending their own money, they won't care about long-term increases in salaries and benefits. Their job is to have a stable and happy workforce, not to keep costs low under threat of their job being eliminated. So over time, the government would overpay and underutilize the workers.

But even if these points are all debatable, what is not debatable is the cost to non-travelers would increase. No one can argue that a non-traveler would be personally better off subsidizing airline travel for others. So even if the government was able to handle the total airline travel less expensively than a bunch of competing airlines, this would not save money for the non-traveler.

Non-travelers have a right not to pay for others' travel. Perhaps this is just as important a "right" as the "right" to free healthcare.

Subsidized airline travel would require an increase in taxes. Therefore it increases everyone's cost, which means inflation will increase because people will need to charge more for their labor in order to pay a higher tax bill, all else being equal.

In addition, the money that is spent by the non-traveller to pay for others' travel means less money would be available to buy the things they want. Perhaps they prefer to travel by bus but no longer can afford the trip. So the benefit to one group (airline travelers) is offset by a detriment to another group (non-airline-travelers.)

So non-travelers should oppose a proposal for the government to takeover the airline industry. Because of eventual higher costs and inefficiency, frequent travelers should also oppose it, even if it provides a short-term benefit.

If consolidation to one carrier (in this case, the government) truly saved money, we would not have laws against monopolies. The greedy monopolist will surely increase costs to maximize profit, just as the inefficient government will surely waste money.

I like this airline example because we know in advance that the private-sector can provide the service better and only users have to pay for it. And now, over the coming years, we will see a clear example of wrongful government intervention in the private market, which is the government takeover of the private health insurance industry.

We've been told about all the upsides of Obamacare, including that our average costs would go way down ($2,000 per family, we were told), our healthcare plans would be better, we could keep our doctor or our plan if we liked it, and service would improve (for example, we'd have shorter waits at the emergency room). Even before the plan has been fully implemented, these promises have been broken. I believe there are more harmful effects around the corner, including longer waits to see a doctor or have surgery, a reduction in the best students going to medical school, and a rationing of healthcare in order to contain costs.

The justification for this eventual takeover of the private-insurance marketplace is that healthcare is a right (unlike say airline travel). Therefore the government has the obligation of providing that service to all who can't afford it (or so say the proponents.)

Some might argue that the freedom to travel is also a right, as is the right to own your own home. What about the right to control your own body? Is that also subject to government intervention? I plan to cover that topic next.

NEXT: http://www.actonforum.com/blogs/allenn/who-controls-your-body

Previous articles in this series:

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

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

PART THREE: http://www.actonforum.com/blogs/allenn/mountain-full-donkeys

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

PART FIVE: http://www.actonforum.com/blogs/allenn/jack-kemp-american-hero

PART SIX: http://www.actonforum.com/blogs/allenn/what-socialism-and-why-it-so-bad

PART SEVEN: http://www.actonforum.com/blogs/allenn/rich-versus-poor

PART EIGHT:: http://www.actonforum.com/blogs/allenn/what-would-jesus-do

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