“By contrast, private firms like Wal-Mart, Sam’s Club and Home Depot had trucks on the road immediately after the hurricane. Stores even gave away items like chain saws and boots for rescue workers, sheets and clothes for shelters, and water and ice for the public. Wal-Mart was so efficient that there was talk among some Louisiana officials of letting Wal-Mart take over FEMA’s job and a suggestion that Wal-Mart CEO Lee Scott run FEMA. Freeman editor Sheldon Richman says the latter suggestion misses a very important point. Wal-Mart was effective because it was not a government agency. If Mr. Scott were in charge of FEMA, he wouldn’t do much better than its former director, Michael Brown. Government cannot achieve the efficiencies of a business. Trying to get government to be as efficient as business is as hopeless as trying to teach cats to bark and dogs to meow”. –Walter Williams, Professor of economics
It seems as if all levels of government were incompetent. So if government can’t help people on this level, what is its use?
Here is an interesting note about citizens helping each other after Katrina.
A universal statement like governments are inefficent, companies are efficient are an oversimplification. I have had positive dealings with govts, I get my passport renewed no problem. Now in NY there is a license renewal storefront in mid-town manhattan that takes literally 10 minutes to walk out with a new drivers license in the middle of lunch time.
Some companies are very inefficent. I don’t know about you, but my utility company sucks, all of the phone companies I have used have been inefficient, my cable company sucks. I go to many stores that are repeatedly sold out of what I need. Wal-Mart worked in Louisiana but I can tell you that the K-Mart near me, is a mess.
I agree, company’s and governments can be both efficient and inefficient at times, but company’s tend to be more efficient than governments because they have an added force that governments don’t have: competition.
Hispanic Pundit said:
“…but company’s tend to be more efficient than governments because they have an added force that governments don’t have: competition.”
So what do you think are good alternatives to this? More choice of governments or eliminating the government?
No, not eliminate the government, but certainly trim it down to its ‘bare essentials’.
In this case, Mr. Williams states it in absolutes.
“Trying to get government to be as efficient as business is as hopeless as trying to teach cats to bark and dogs to meow”
The issue is not just competion, it is also, experience, Wal-Mart moves millions of units of inventory everyday, they do it a lot more than FEMA does it.
So in the FEMA case in New Orleans, what reform would you consider?
I personally would not have been opposed to FEMA contracting with Wal-Mart to provide the essentials, food, blankets, sheets, diapers etc. I guess the government hires contractors to do this already, of course in situations like Iraq, you always hear about the fraud and gouging involved in govt contracts
Yeah, contracting out as much as possible would have been better than FEMA. Secondly, you allow prices to rise to their equilibrium level, and lastly you reduce burdensome regulations.
“No, not eliminate the government, but certainly trim it down to its ‘bare essentials’.
”
What are it’s bare essentials?
“Secondly, you allow prices to rise to their equilibrium level, and lastly you reduce burdensome regulations.”
This would probably be tricky. Don’t foget the customers who would most need the essentials would have lost everything. Some of the people would not need so much of the essentials.
For example lets say bottled water. There could be people who lost everything, their homes, jobs all of there money, everything. The water supplies to their neighborhoods are demolished. Others may have had some minor damage, they still have water coming to their house, did not lose everything. The people who did not lose everything could afford close to regular prices for the bottled water, however the people who lost everything can’t pay anything for water. So the supplier could charge slightly below market rates sell out to those who didn’t lose everything, while the people who lost everything will not have water.
What are it’s bare essentials?
Well, this is the current political debate, isn’t it. I would say to me its bare essentials are somewhere between what modern conservatives currently think and what anarcho-capitalist libertarians think. In other words, I am not as big government as modern day conservatives and not as anti-government as anarcho-capitalist libertarians, but certainly more anti-government than modern day liberals. Does that make any sense?
This would probably be tricky. Don’t foget the customers who would most need the essentials would have lost everything. Some of the people would not need so much of the essentials.
But your scenario is a problem in my system and yours. Lets say you ration scarce water by giving it away for free, in the fear that the poor would not get the much needed water if it was priced too heavily, do you think that would make the rich any less likely to hog up as much water as they like? No, in all likelihood, it would make the problem worse, by having more people, including the rich, hog up more water than they would otherwise need.
Rationing goods by price, on the other hand, forces people to do what you want them to do in times of scarcity: buy only enough water that is absolutely necessary. When water is $20/bottle, you are much less likely to hog it up than if it was $5/bottle, or $0/bottle. In addition, when the price of water rises, that increases the supply, by signaling to other people that they can make alot of money selling water, thereby increasing the amount of people willing to sell water to those in desperate need of it. In short, rationing by price both, increases supply and decreases demand, thereby getting more water to more people than in any other rationing scheme.
Good point on the price HP.
However, when there are people with no money, they get no water if it is even at a low price.
I think the laws of supply and demand, may go haywire in a situation like a hurricane, simply for the fact that the supply is very limited due to transportation and infrastructure issues. The supply will not be there to lower prices and may create a period of price gouging during the panic.
I guess I might be too much of a liberal, but I feel that when uncontrollable circumstances, like a hurricane, leaves people unable to get the most basic of needs in order to survive, then it is the governments job to provide those needs until they can get back on their feet.
Alfonso,
Thanks for your thoughts, your blog, and your gentlemanly behavior.
Although I disagree with you on many issues, we may have a point of agreement and that is the size of government and its tendency to grow at the expense of the general population.
As for the size of government, any size would be too big.
Michael,
However, when there are people with no money, they get no water if it is even at a low price.
I agree with this, and I don’t want to give the impression that I think rationing by price is the silver bullet, certainly rationing by price also has its shortcomings. There probably will be some people who still can’t get water, who still can’t get the life saving tools that they need, my only point here is that in times of scarcity, rationing by price is the best method we have. It’s not perfect, it’s only better than all of its alternatives (remember, saying you support the government to distribute water is to change the fundamentals on me, certainly if the government had millions and millions of bottled water to hand out, well than, now we aren’t in a position of scarcity anymore, are we?).
Richard Thomas,
Same with you, you are always welcome at this blog, whether we agree or not.