Democracy is government controlled by the employees, Mike Gibson says:
If governments were controlled by their customers, they would have strong incentives to decrease their operating costs as much as possible.
But governments aren’t controlled by their customers. Certainly not in authoritarian regimes. And not even in democracy. Yes, citizens are able to express their dissatisfaction through non-market institutional channels. They exercise voice. They vote. But the rub is that the citizen is less a customer and instead, as of late, increasingly an employee. Democracy is government controlled by the employees.
What does a business controlled by employees look like? Public schools. Employee-run firms tend to promote policies that ensure job security over productivity. They favor any policy that increases the number of jobs, unproductive or not, and they oppose any measures which reduce the number. Job security and advancement through seniority mean more than how effective you are. To fire any employee is nearly impossible. Costs are ignored in favor of maximizing size. And if the resistance to higher prices or taxes has any strength, they happily spend more than they take in. Customer service is poor, at best.
With each redistributive transfer payment, more citizens are put on the payroll. Why even bother to show up for work? Vote and get your paycheck instead.
What’s more is that, with an employee-run organization, you don’t even have to ask the customer how he wants to spend his money. Instead, ask other employees how to spend it. It’s easier.
“If governments were controlled by their customers, they would have strong incentives to decrease their operating costs as much as possible.”
This almost perfectly 100% wrong.
If governments were controlled by their customers, 50%+1 would take as much wealth as possible from the rest.
Further, control by customers is an impossibility — it simply cannot happen. The People didn’t lose control over our government. The people are incapable of governing — the People doesn’t exist as anything other than a tool to allow someone to take control of society. The People is, at best, an incoherent mass.
No private company has ever been run by its customers. This is not an accident.
I suppose it depends on whether we interpret controlled by their customers to mean controlled by their customers via market mechanisms or controlled by their customers via majority vote.