Government Can't Innovate and Would You Like That Super-Sized?

Government can't innovate. There certainly must be exceptions but they don't come to mind. The US Post Office faciitated easy, cheap written communication between all Americans. Why weren't they a driver to move to the Internet? The phone company was essentially a government run institution. Where were they for the last three decades when cellular phone technology was becoming mainstream? Welfare benefits have n-tupled an unaccountable number of times since its inception in the sixties. How come we don't remember any example of them actually finding ways to reduce the welfare rolls for able-bodied individuals? With new healthcare legislation, where are the much touted economies of scale? Scale yes. Economy no.

On and on, the list grows for every branch, every corner of government. There's nothing wrong with the workers themselves, they are just as capable as those in the prive sector. Yet it seems the only thing they can do in this structured environment is grow, become less efficient, pass up opportunities to improve and just grow, and then grow more. With the exception of a few national parks and other isolated groups, government institutions can't break even. The government employees don't produce anything. They exist on tax dollars, skimming a little off the top of what you make. That is, each employee skims a little off what you make. The total is not so little.

Unemployment

There are a lot of theories about unemployment. Such as what the natural level is. Is it closer to 50 percent than 100%? And is the natural level what we really want? Most would agree we want somewhere near ninety-plus percent levels of employment and if the market won't provide it naturally (though market forces), then we want to get it through artificial means (the gov).

The trouble with innovation is, every time one hits the market, a shift in workforce takes place that causes upheval. New Jobs are created followed by old jobs becoming obsolete and lost. We're back to where we were, except now we have hovercars or an almost infinite library or something else we didn't have before. But we didn't create more jobs in the long run.

Meanwhile, the government, like some beast stuck in slow-motion time, can barely comprehend the changes going on, let alone take a leading role in determining what direction to take. So could the government raise the employment rolls? Yes, it seems they can, simply by growing. The more they do, the harder they must slave-drive those remaining in the private sector to pay for those additional workers through taxes. Notice that it doesn't particularly matter how hard the public sector employees work. The fact that they are being paid means the others have to pay them, and they can't very well stop working without disaster ensuing.

What we have here is unstable equilibrium. Everything just squeaks by, just breaks even. Everybody lives okay and then something unexpected happens. It could be a bad crop or a new disease or a natural resource becoming scarce. That carefully architected society then crumbles quickly.

And what a dull, drab world that would be. Government can't innovate, we already said that. And the private sector will find itself more and more hemmed in by higher taxes that further discourage innovation by raising the cost of risk taking and breaking even.

So if you can imagine a future with a high employment rate coupled with low innovation, you would get a stable society in which one century looks pretty much like another, only with everybody working harder than ever to keep it that way. You may have doomed the human race to a state of semi-suspended animation, punctuated once in a while by disasters, but you will have tackled the problem of 2010.