A Good Corporate Citizen

[ksen]

No one claims that free markets achieve any kind of perfection

You mean other than perfect competition, perfect equilibrium and perfect information.

 

[laughing dog]

Why they would suddenly become incompetent when they move into a government job, or suddenly become competent when hired by a multinational corporation, is beyond me.

You need to drink some libertarian kool aid.

 

[Jason Harvestdancer]

No one claims that free markets achieve any kind of perfection

You mean other than perfect competition, perfect equilibrium and perfect information.

Those are not requirements for a free market, although people (who do not support free markets) often say they are.

 

[laughing dog]

You mean other than perfect competition, perfect equilibrium and perfect information.

Those are not requirements for a free market, although people (who do not support free markets) often say they are.

They are not requirements for a free market. They are necessary for free markets to reach economically efficient outcomes.

 

[Canard DuJour]

Here's just one example. Do we have anything similar in large private organizations?

The Project first gained wide attention in the mid-1980s uncovering Pentagon waste and fraud by publishing reports, provided by whistleblowers, exposing $640 toilet seats, $7,600 coffee makers, $436 hammers and other overpriced spare parts used by the military.

http://en.wikipedia.org/wiki/Project_On_Government_Oversight

Whereas Donald Trump's golden toilet furniture is fine and dandy for ideological reasons.

The reason why it becomes different in a government job vs. multinational organization is often relating to the incentive structure - the multinational tends to have better incentives to hire people of better competence in key positions (it can pay them better, and thus attract better talent), and also tends to structure their compensation bonus based on performance, more closely aligned with reality. The large multinationals also tend to replace and get rid of incompetence more quickly than a government organization.

And evolution is a teleological drive to superior organisms.

The same fallible humans work in the public and private sectors. Private ends up better at some things where the market eliminates less efficient players, not because of some superiority inherent in privateness. It only works in fairly limited circumstances - not least of which is that consumers can readily switch or substitute. It doesn't work so well with healthcare, education or anything involving fixed infrastructure like roads, rail and utilities. Most of the important stuff in fact. Then you either need heavy gov't regulation or you're better off with public provision.

There's also the well-known Principal-Agent Problem which means the kinds of efficiency for-profit entities reward don't necessarily benefit consumers. The Aramark thing is an example.

Love em or hate em, US corporations are extraordinarily efficient for such large organizations, which is the main reason why they make up such a significant factor of the US economy and US production.

They are and they bring the world a lot of good stuff. It doesn't necessarily follow that we need more "free market"

 

[RavenSky]

Large corporations have customers, so if a large corporation isn't best meeting the needs of these customers the customers stop paying them money and go elsewhere.

This is much less so when the government is the customer, which is exactly the point.

And even when one large corporation is the customer and another large corporation is the vendor, the customer still has customers of its own it has to satisfy, so if it isn't getting value for the money spent on its vendor, it will be at a disadvantage in terms of its ability to best satisfy its own customers.

No one is talking about perfection in any of this but rather which is the better outcome among the options available?

And with the bolded you have completely negated the claim of the prisoners being the customers. As multiple people have pointed out multiple times, the various prisons are the customers, NOT the prisoners. Dismal's arguments, and your support of them, fail.

 

[SimpleDon]

You mean other than perfect competition, perfect equilibrium and perfect information.

Those are not requirements for a free market, although people (who do not support free markets) often say they are.

They are requirements for the free market to self-regulate. It strains the definition of "free markets" to say that they can't regulate themselves.

 

[dismal]

So, based on your experience the government officials in this case are probably doing a better job of managing their Aramark deal than private industry does with theirs?

If I ate in, say, the IBM's Aramark run cafeteria it would have less food, more rat's scurrying about the kitchen eating stuff, more stuff being fished out of trash cans to be served to IBM employees, etc?

And if IBM found out about it they'd promote the procurement team?

My experience does not include Aramark, so based on that alone, I couldn't say; However if they are providing the level of service reported in the OP case, I would certainly hesitate to contract them for food services at any location.

As far as I am aware, IBM don't provide food to their employees as a company 'perk'; And if you eat at an IBM canteen, you do so by choice, and at your personal expense. While working for IBM may have some similarities to incarceration in a state penitentiary, I believe that one critical difference is the absence of locks on the doors to prevent employees from going elsewhere for their lunches.

That said, perhaps an investigation of the suspicious similarity between 'Aramark' and 'Armonk' warrants investigation

The point was not to single out IBM it was to raise the question of why you are so confident that governments are better at managing procurement contracts than businesses.

If we were to break it down a level or two why do you think government procurement people are better?

Does the Michigan Department of Corrections attract a higher quality employee than a company like IBM can? Does it pay better? Does it motivate employees better with appropriate rewards and punishments?

And if you eat at an IBM canteen, you do so by choice, and at your personal expense.

So are you saying the fact that these people are captive prisoners whose meals are contracted for and paid for by others mutes the market signals that require Aramark to provide better service that an IBM cafeteria would have?

Shocking. I wonder why no one pointed that out before.

 

[ksen]

Those are not requirements for a free market, although people (who do not support free markets) often say they are.

They are not requirements for a free market. They are necessary for free markets to reach economically efficient outcomes.

Axulus wasn't asking what was required for a free market to exist. He was saying that free markets, once established, are not claimed to achieve any sort of perfection. When in actuality neoclassical, and maybe even austrian, economics does claim that truly free markets will achieve these sorts of perfections.

Whoops, I forget perfect efficiency and perfect distribution resources.

 

[dismal]

They are not requirements for a free market. They are necessary for free markets to reach economically efficient outcomes.

Axulus wasn't asking what was required for a free market to exist. He was saying that free markets, once established, are not claimed to achieve any sort of perfection. When in actuality neoclassical, and maybe even austrian, economics does claim that truly free markets will achieve these sorts of perfections.

Whoops, I forget perfect efficiency and perfect distribution resources.

Cite?

 

[bilby]

My experience does not include Aramark, so based on that alone, I couldn't say; However if they are providing the level of service reported in the OP case, I would certainly hesitate to contract them for food services at any location.

As far as I am aware, IBM don't provide food to their employees as a company 'perk'; And if you eat at an IBM canteen, you do so by choice, and at your personal expense. While working for IBM may have some similarities to incarceration in a state penitentiary, I believe that one critical difference is the absence of locks on the doors to prevent employees from going elsewhere for their lunches.

That said, perhaps an investigation of the suspicious similarity between 'Aramark' and 'Armonk' warrants investigation

The point was not to single out IBM it was to raise the question of why you are so confident that governments are better at managing procurement contracts than businesses.

If we were to break it down a level or two why do you think government procurement people are better?

Axulus already answered this - the government has oversight projects and whistleblower protections.

 

[SimpleDon]

I seem to be caught between the government haters and the corporation haters.

I think that in general this is a discussion about the failures that can occur in any large organization whether it is a government or a large corporation.

To me, it doesn't seem to matter if you are talking about big government verses small government or big business verses small business, the advantages and the disadvantages are pretty much the same.

Small business and local government are less efficient, more responsive - closer to their customers or constituents, less financially secure, less able to risk innovation, less bureaucratic.

Large business and big government are more efficient, less responsive, more financially secure, more innovative, more bureaucratic.

The important question is whether all of the advantages of having large organizations outweigh the disadvantages.

As far as the free choice of the markets are concerned the answer is that the economic efficiency and financial strength of big business and big government win. Because that is what we have. That is what has evolved by natural selection over three thousand years of civilization.

And no, you can't have big business without big government, nor can you have big government doing everything. You have to counterbalance power with power.

Because the corrective mechanisms of small organizations, informed customers not buying your goods or voters throwing the bums out are too weak to completely regulate big organizations.

 

[dismal]

The point was not to single out IBM it was to raise the question of why you are so confident that governments are better at managing procurement contracts than businesses.

If we were to break it down a level or two why do you think government procurement people are better?

Axulus already answered this - the government has oversight projects and whistleblower protections.

And a corporation just lets people do whatever they want? No one in a corporation has any particular reason to seek a better contract or enforce an existing one?

Evil greedy corporations who sign contracts are just helpless victims because, um, evil greedy corporations like Aramark are incredibly motivated to squeeze the last dollar of profit from a contract?

 

[bilby]

Axulus already answered this - the government has oversight projects and whistleblower protections.

And a corporation just lets people do whatever they want? No one in a corporation has any particular reason to seek a better contract or enforce an existing one?

Evil greedy corporations who sign contracts are just helpless victims because, um, evil greedy corporations like Aramark are incredibly motivated to squeeze the last dollar of profit from a contract?

Meh, I am not interested in playing the side you cast me in in the false dichotomy game.

Governments have flaws that are generally due to their size. Similarly sized businesses have the same flaws.

Insofar as a difference exists, it is very small; and it tends to be the opposite of what you appear to expect, largely because most people share that expectation, and so slightly more steps have been taken to rein in government than have been taken to rein in business.

 

[SimpleDon]

Axulus wasn't asking what was required for a free market to exist. He was saying that free markets, once established, are not claimed to achieve any sort of perfection. When in actuality neoclassical, and maybe even austrian, economics does claim that truly free markets will achieve these sorts of perfections.

Whoops, I forget perfect efficiency and perfect distribution resources.

Cite?

Once again, these things and more are required for a self-regulating free market to exist. If you define a free market as one that requires external regulation, then you are correct, but as I told Jason, you are straining the understanding of the phrase "free market."

I think that most people who use the term aren't Austrian/Libertarian anarchists like Jason is or you might or might not be if you ever decide.

Most people who use the term simply mean that the markets should operate with as much freedom as possible, which arguably is where we are today in the US. But the widespread use of the term confuses the anarchists into believing that their position of eliminating the government, ETEC's, is a valid one with widespread support, neither of which is true.

We have to discourage this by not using the term except to mean it in the sense that the anarchists use it.

 

[ksen]

Axulus wasn't asking what was required for a free market to exist. He was saying that free markets, once established, are not claimed to achieve any sort of perfection. When in actuality neoclassical, and maybe even austrian, economics does claim that truly free markets will achieve these sorts of perfections.

Whoops, I forget perfect efficiency and perfect distribution resources.

Cite?

http://www.economicsonline.co.uk/Business_economics/Perfect_competition.html

http://wiki.mises.org/wiki/Perfect_competition

Looks like I was wrong that Austrian economics shares the neoclassical view . . . but I did say "maybe" about that one.

 

[dismal]

And a corporation just lets people do whatever they want? No one in a corporation has any particular reason to seek a better contract or enforce an existing one?

Evil greedy corporations who sign contracts are just helpless victims because, um, evil greedy corporations like Aramark are incredibly motivated to squeeze the last dollar of profit from a contract?

Meh, I am not interested in playing the side you cast me in in the false dichotomy game.

Governments have flaws that are generally due to their size. Similarly sized businesses have the same flaws.

Insofar as a difference exists, it is very small; and it tends to be the opposite of what you appear to expect, largely because most people share that expectation, and so slightly more steps have been taken to rein in government than have been taken to rein in business.

But you do see the internal inconsistency in a discussion that starts with the premise that Aramark is an evil greedy corporation that ruthlessly seeks to maximize profits under a contract and ends with the conclusion that corporations are lax about attempting to maximize profits under a contract?

 

[SimpleDon]

Axulus already answered this - the government has oversight projects and whistleblower protections.

And a corporation just lets people do whatever they want? No one in a corporation has any particular reason to seek a better contract or enforce an existing one?

Evil greedy corporations who sign contracts are just helpless victims because, um, evil greedy corporations like Aramark are incredibly motivated to squeeze the last dollar of profit from a contract?

No, big corporations and big governments share more characteristics than they have ones that differentiates them. See my post 132.

 

[dismal]

Cite?

http://www.economicsonline.co.uk/Business_economics/Perfect_competition.html

http://wiki.mises.org/wiki/Perfect_competition

Looks like I was wrong that Austrian economics shares the neoclassical view . . . but I did say "maybe" about that one.

You were also wrong about the neo-classical view if you were implying anyone thinks the idealized conditions would exist in reality. For those keeping score at home.

 

[ksen]

Meh, I am not interested in playing the side you cast me in in the false dichotomy game.

Governments have flaws that are generally due to their size. Similarly sized businesses have the same flaws.

Insofar as a difference exists, it is very small; and it tends to be the opposite of what you appear to expect, largely because most people share that expectation, and so slightly more steps have been taken to rein in government than have been taken to rein in business.

But you do see the internal inconsistency in a discussion that starts with the premise that Aramark is an evil greedy corporation that ruthlessly seeks to maximize profits under a contract and ends with the conclusion that corporations are lax about attempting to maximize profits under a contract?

Actually it was about how you can't really rely on free market forces to fix corporate misbehavior.

But carry on.