There are in fact private militaries by mattsteinglass
August 15, 2008, 10:20 am
Filed under: Economics, Health

Megan responds to Yglesias on the desirability of getting government out of health care by reasserting that private enterprise can always do things better:

The US military is indisputably the most effective military in the world. But militaries are not very effective. At any of the tasks the military does which are comparable to a private organization, it performs worse than top-notch private organizations; it is not as good at logistics as Wal-Mart, as good at food service as McDonalds, etc.

People used to say this about 10-15 years ago, but as it turns out it’s not true. First of all, there’s no need for a strained comparison to McDonald’s or Wal-Mart: there are lots of private military organizations, and it turns out they’re neither better at their jobs nor most cost-effective than government militaries. Blackwater has cost the US military vast amounts of money in Iraq and Kuwait, has relied to a large extent on infrastructure put in place by the US military, and yet has been involved in a disproportionate share of screw-ups and war crimes. There’s no evidence it has done its job (mostly escorts for diplomats and protection of limited areas) better than regular military has, even though the jobs it’s assigned are much easier than the military’s missions because they’re so much more limited. As a general rule, mall security guards are worse than police officers, irregular militias are worse than regular armies, and mercenaries are worse than the Marines. That’s why the term “rent-a-cop” is a term of disdain, not of admiration. One of the reasons why private companies can’t do the security job as well is that discipline and motivation are interrelated, and the motivation of rising in the corporate ranks and making lots of money does not inspire the kinds of effectiveness that are useful in creating disciplined fighting forces and peace officers. Another reason is institutional memory: almost no private company has the long-term institutional memory and connection to experience of a regular military, and none can hope to retain career officers the way the military can (though the loss of crops of junior officers during experiences like Vietnam and Iraq is worrisome). Note the comparison here to health care. The profit motive is not a sufficient, or even a very good, incentive for driving good health care. The doc who is primarily trying to make the most money is not under any circumstances the doc you want.

But even beyond the comparison of public to private militaries, it’s not really clear that the private companies the US now hires for food services etc. at FOBs in Iraq are doing the job more efficiently than it used to be done by Beetle Bailey peeling spuds. The problem here is that the job of delivering food to a war zone is not like the job of delivering food to a mall: you have a captive audience, which creates perverse price incentives. So it’s more like delivering food inside a movie theater. The perverse incentives are exacerbated by the fact that the government is paying. Hence $10 Cokes. It’s not self-evident that the profit motive leads to greater efficiency, in a situation where your choosing-customer is a guy stuck on a base in the desert with no other options, and your paying-customer is the US Government which guarantees you cost-plus and orders you to keep the Coke machine stocked no matter what.

In general, though, there’s not much point in my getting into a health care discussion with Megan, because in an earlier post she appears to agree with this sentiment of Arnold Kling’s:

From my perspective, the health care cost issue is a bit of a red herring. If you had government out of the health care financing business, you would not worry about what health care costs are doing. If my fellow citizens choose to spend more of their money on their health care, that’s not my concern. It’s the prospect of my fellow citizens spending more of my money on their health care that has me worried.

…and I can’t see how this isn’t tantamount to saying sick poor people should just go die already. Libertarians are often unjustly accused of thinking that, but in this particular quote I can’t see how the accusation would be unjust. This isn’t Megan’s quote, she was talking about Medicare specifically not Medicaid, but the quote itself is really problematic and it’s hard to know where to start discussing something like that.

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