11.20.2006

No Competition

Earlier this month, I had to make two phone calls in the same morning.
One was to a government agency and one was to a manufacturer's
customer service center. The outcomes could not have been different.

The government agency I was calling because I had filled out an
application for a certain document, which they had processed fairly
promptly, but now I needed that processed document to be further
authenticated by the same agency. So I sent in the processed document
with a note to that effect and a self-addressed stamped envelope.
They sent the document back to me, unauthenticated, with a note saying
it would be $20 and a blank application form. Clearly, they assumed I
was asking for the document to be processed, not realizing I had
already processed it and just needed it to be authenticated. So I
sent it back to them with a clearer note and another SASE. Again they
sent it back to me, this time with a note saying, "We've already done
this," as if they couldn't understand why I'd keep sending them a
completed document. So I called the agency and was told their
computers were down and that I should call back again later on in the
morning. Which I did, only to be told "I'll see what I can do," which
always makes me nervous, especially when it comes to government
agencies.

Contrast that to the second call I made that morning. A household
item had broken and, noticing on the manual when I was trying to fix
it that the product had a lifetime warranty, I called the 800 number
and asked to have the part that had broken sent out to me. A chipper
woman apologized profusely for the part having broken, professionally
collected my information, and said she would expedite the part out to
me. Lo and behold, the very next day the part was waiting for me in
the mail.

I think I've ranted about this before, but the fact that this happened
again kind of proves my point. What motivated the second entity to be
some prompt, in comparison with the first entity? Most of it is lack
of competition: if the second entity doesn't take care of me, I can
buy my household item from dozens of other places, but if the first
entity doesn't take care of me, what am I going to do? Hence,
competition stirs everyone to get better, and the consumer wins, in
the form of higher quality products and lower prices and more choice
and faster response.

I'm not saying government shouldn't then do anything; there are, after
all, many functions only government can do, even though it creates a
monopoly for them that might possibly lead to inferior product quality
and poorer customer experiences. But at the very least, for the
things that government doesn't have to do, for which there are dozens
of private sector alternatives for people to use, why would government
bother to be in those businesses?

Privatization guru Stephen Goldsmith, former mayor of Indianapolis,
calls this "the Yellow Pages test." That is, if I can find what I
need in the Yellow Pages, why would I as the government be doing it?

Unions, of course, despise the privatization movement. But if done
right, privatization can be good for unions. Only the vilest of union
leaders would tell you (at least in public) that what they want is to
enable their people to be lazy, second-rate, and overpaid. Instead,
they'll tell you that they just want their fair shot at the work
that's out there.

And good privatization advocates do just that, for their goal isn't
necessarily to convert public functions into private ones, but to
inject competition into functions previously administered as public
monopolies. Far from haphazardly banishing public employees from the
payroll, they give those employees the same chance as private firms to
bid on and win government business. After all, those employees just
might utilize some competitive advantage, whether previous experience
or specialized skills to do a better job than the private sector.

Because sometimes the public sector folks are actually better than the
private sector folks at getting something done. And in the end,
that's what's most important: not that the public or private sector
wins, but that competition allows us citizens to win.

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