The always sensible Arnold Kling turns his attention to this question in his latest Substack post.
Businesses respond to profit and loss incentives — not always rapidly, but eventually they can’t evade the fact that they lose money when they do dumb things. Bud Light comes to mind. But the motive of earning profits and avoiding losses is absent in nonprofits and the public sector.
Kling writes,
No business tries to do everything. A corporation is lucky if it can do a few things well. Every business puts a clear boundary on what it will do and what it will not do. Corporations ruthlessly shut down poorly performing units and unsuccessful initiatives. They carefully choose which new initiatives to undertake.
There seems to be no limiting principle on what the government will try to do. And almost never does government back out of an activity once it gets in.
Yes. In the country’s earlier years, government was kept out of doing things it ought not to do because the Constitution put limits on politicians. Too bad we tossed away those limitations when the Supreme Court decided in the 1930s that it was necessary for the feds to have far more authority than the Constitution permitted. So we now have vast bureaucracies meddling in health, energy, education, and so on, making terrible decisions for which they suffer no adverse consequences.