There is a common assumption that government is inefficient at providing anything. A comment on an earlier post included a link to a paper arguing that a completely privatized road system would be better than the system we currently have and would even lower the rate of automobile related deaths. It is rare that the argument goes that far, but there we are.
I would argue that for many areas of life, government is not only the logical but also the better provider of services. Let's look at a specific example, privatized fire protection. It might be cheaper (although we won't address the ways that is accomplished). A community has two companies providing fire departments. Taxes dropped significantly when the public department was abolished. Property owners purchase subscriptions for their service. Both companies do what they do well and the price is competitive between them and lower than the attendant taxes were. They truly are competitors in all of the best and worst senses of the term. A fire breaks out at a house with nobody home. The neighbors call a fire company and the dispatcher looks up the address, only to tell the caller that the homeowner does not have a subscription with them. Then the dispatcher tells the caller that the next door neighbor does have a subscription and they will be there to keep the fire from spreading. They arrive quickly, set up, and begin hosing down the neighbors home to keep the fire from spreading... while watching the first house burn. In the meantime, the caller has contacted the second company who send a truck. When they arrive, the first company is in their way and they cannot get close enough to efficiently address the fire. Plus, the additional call cost them abut 5-10 minutes, during which time the fire got a lot worse. And it is discovered that the neighbor on the other side, trying to save money, has neglected to purchase a subscription from either company. That house catches fire and the entire neighborhood is threatened. A third house, also without a subscription, begins to catch and the second company, which has a lot of subscriptions in the area, decides to address that house to keep things from spreading further. After the incident, they send a bill to the final home and the owner responds, "I didn't ask you to put out the fire." Those who have purchased subscriptions wonder whether they should drop theirs... look at the results - one house with a subscription is gone and one without was saved.
Would it not have been more efficient had there been one department, paid for by public funds, with the responsibility of keeping the entire community safe?
Here's the basic issue for me. A for profit company has as its primary responsibility, making a profit. Indeed, it has a legal and fiduciary responsibility to make money. If a given service cannot be done profitably, it will not be done. Decisions are made based on the bottom line, and usually with short term goals in mind. Many companies provide excellent services or products and rightly pride themselves on excellence but they must be able to make a profit or they do not provide that service or product. Government, on the other hand, has as its primary responsibility, the welfare of the citizenry. There are times when that welfare will not easily translate to a dollars and cents bottom line and other times when it clearly will not be profitable, especially in the short term.
Let's look at another example - medical care (which I believe should be provided by the government). When the Obama plan (which I'm not happy with) was being discussed two big scary terms thrown out by the opponents were "death panels" and "rationing" as if either was a new thing. There already are both. Panels decide what care will be provided. I have an insurance policy with scores of exclusions. Somebody sat down and said, "we will not cover this. no exceptions." About 5 years ago, we paid nearly $60K for a surgery that our daughter needed because our company never paid for that surgery. Without it, she would have gone deaf in one ear, had difficulty chewing, and likely would have had her jaw lock periodically, requiring visits to the emergency room to have it broken. "Sorry. Not covered. Ever." As for rationing, we were able to come up with the money. It really hit our finances hard but we did it. Had we not been able to, rationing would have come into play... no money = no surgery and she would likely be deaf now and facing the other issues. For those without insurance, every medical decision is a similar one. Questions are not always asked regarding the value of a procedure, the prognosis for the patient, or even if it is good science. Long term questions are not asked regarding the way that decision will impact the larger society. Instead, a bean counter asks who will pay and how much? I would much rather have a panel of scientists asking whether the procedure is likely to be successful than a panel of bean counters asking whether it will be profitable.
And finally, if a service is being provided for profit, every dollar that is shunted off into profits is a dollar not spent on meeting the need.
There is no question that government is not always efficient and that the services it provides could be improved. Often those with the loudest voices get their needs addressed while those with less power are ignored. Often government responds to misinformation and acts in ways that clearly go against the common good... that is what we have elections for. It is the responsibility of the whole of the citizenry to stand up and change those in power. Still, that basic difference of primary goal is critical. For profit businesses are there to make money. Meeting needs is only the way they make money. Government is there to meet needs.