Paul Krugman doesn’t understand why people think government is bad:

Why, exactly, are these public functions unquestioned bywords for “something bad”?

Maybe I’m living a sheltered life here in central New Jersey, but I don’t find the Post Office a terrible experience — no worse than Fedex or UPS. (Full disclosure: I worked as a temp mailman when in college.) And nobody likes going to the DMV, but the one on Rt. 1 I go to always seems fairly well managed.

And in general: is dealing with these government agencies any worse than, say, dealing with the cable company?

The prejudice against government seems to have become free-floating, unattached to any actual experience.

From my perspective, that’s the most eyebrow-raising post I’ve ever seen Krugman write. It’s so at variance with my own personal experience as to leave me almost speechless. Yes, dealing with the cable company can be a bit frustrating, but you can argue with them over the phone without the employee losing their temper. If you so much as raise an eyebrow to a TSA agent, they can and will make you miss your flight (I speak from personal experience.) There is simply no comparison. I thought about Krugman’s column the other day when I took my daughter in for her learner permit test. She asked why the lines were so long, even before the DMV office had opened (BTW, at 10am–what’s that about?)

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(The line was even longer; I cropped out people looking at the camera, for privacy reasons.)
I told my daughter that government offices don’t have to compete for customers as private companies do, so they don’t care very much about customer relations. Of course some private monopolies suffer from the same problem.

After she passed her written exam, she said she noticed that government employees were really mean. This is a sixteen-year-old girl who 1 hour earlier barely understood the difference between the private and public sector, a difference that some Nobel Prize winners still have not noticed. Or maybe it’s just her “free-floating prejudice.” What do you think? In my view most people find their jobs frustrating, and will take it out on strangers unless competition forces them to be polite.

In places like Russia and China, where government dominated all sectors of the economy for generations, people became naturally suspicious. You approached a counter expecting someone on the other side to be your enemy, to do whatever they could to frustrate your day. The US is much better, but we still see this in the government sector.

Earlier this month my wife got a ticket for parking on a street where you could only park on weekends and holidays. July 3 was a day when my wife didn’t have to work, the Federal government was closed, the stock market was closed, and even our town government was closed. But even though Newton Town Hall considered it a holiday and was closed, Newton Parking Enforcement did not, as their meter maids had to work that day. Just imagine if you are a meter maid forced to work on what everyone else thinks is a holiday. How would you “show them” your anger? Obviously enforce the letter of the law, not the spirit.

I told my wife to call the Newton Parking Clerk; any reasonable person would have viewed July 3rd as a holiday. Unfortunately, the Newton Parking Clerk is apparently not a reasonable person. Of course I’m half-joking here, public employees are just as reasonable as anyone else. It’s the incentive structure that makes them behave the way they do. Meter maids and parking clerks don’t have to worry about angering their customers.

Here’s the obvious solution. Privatize the DMV by letting competing companies provide this service, and compensate them per customer at the current spending level of the government service. Since the private sector is far more efficient than the public sector, they can do this at far lower cost, and will compete for customers with better service, by getting rid of the long lines. The same idea has been shown to work with school vouchers, where private voucher schools can consistently produce the same crappy low achievement scores as the public schools, at a far lower cost per pupil.

In this fashion we could get rid of most of the government, and make America a far more polite country. Are there any core activities that the government must do? Probably, but I’m not sure which ones. In San Francisco a private police department has operated side by side with the city police for more than a century. (Behind Reason magazine paywall.) It does a better job at lower cost. Their police officers are more polite. And police work is one of those activities that even some libertarians regard as a core government function. Obviously the vast majority of things like schools, Post Office, TSA, FAA, toll roads, DMV, Amtrak, subways, etc., etc., would be even easier to privatize. There is very little that only government can do.

At the University of Chicago we were taught all sorts of mathematical proofs for the efficiency of the free market equilibrium. For me, the strongest argument for markets (which of course goes back to Adam Smith, and even earlier) is simple human decency. Government brings out the worst in us, and competition brings out the best in us.

PS. The Paul Krugman post was published before he moved from Princeton NJ, to New York City. It would be interesting to hear his view of government efficiency in a place that doesn’t have as many competing suburbs nearby as Princeton.