Paver Joe plans to work overtime and bust his tail on the job, not for profits, but to grow his business. The cost to taxpayers is very low, but the certainty that he will complete it on schedule and as specified is a little iffy. He puts in a dirt-cheap bid that he wrote up himself with the help of his estate attorney. * Bidder 1 is "Paver Joe", a local guy with a driveway-paving company and three trucks who sees this as a big opportunity to expand his business and get the city to pay for five new trucks. Let's say that there are three credible bidders for that street-paving contract:
And neither the schoolteacher nor the real-estate broker has any clue how to write or evaluate a road-paving contract.
so-called "market discipline" is a lot more diffuse when you have a former-schoolteacher-or-real-estate-broker-turned city councilman whose job it is to disburse a multi-million-dollar street-paving contract or whatever. Without going ideological, the private sector in a free-ish market has a more immediate system of checks and balances if only because you have to actually persuade the end users to keep buying your stuff for the price you're charging: if it's no good, or if you are grossly over-charging, your customers will tend to catch on sooner or later.īut in the public sector, the "consumer" often has little choice. And while that can be pretty far by normal standards, at some point sunlight does shine through any crack, and outright robbery or complete incompetence is difficult to sustain indefinitely.īut there is an awful lot of low-level waste, patronage, and corruption that happens both in the private and in the public sector. None of which is purely democratic, nor even purely meritocratic, but there is a certain dose of both kind of baked into the cake: stuff like wealth or family connections only gets you so far in modern, developed, and relatively open and transparent societies such as the US. Those who have acquired a lot of power tend to be good at accomplishing things that lots of people want to see happen. Those who rise to high levels of influence usually have some pretty good insight and talent in their area of expertise. And that might not always be a bad thing: those who have risen to high levels of wealth are often pretty smart, and surprisingly often exceptionally honest. For starters, all the above three are always and have always been inter-related, and probably always will be. While I have always been honest in my own dealings on a case-by-case basis, I have refrained from many opportunities to be a "whistleblower".Ī lot of stuff on reddit misunderstands the relationships between wealth, power, and influence. I've never ripped anyone off personally, but I have seen and occasionally been an incidental beneficiary of quite a bit of patronage, insider dealing, nepotism, misuse of taxpayer money, and outright corruption. I'm a mid-career guy in a business that does a lot of work with governmental and quasi-governmental agencies. r/economics might not be the correct place to put this, but it was the best I could think of. This is a throwaway account (I'm a longtime redditor under another login). “Trying to hire high-skilled workers at rock-bottom rates, is not a skills gap.”
Probably my favourite economics image of the year. Am I the only one who cringes when I see this?