Proponents of a bigger, stronger state often claim that the result of their proposed interventions will be an increase in efficiency. Centralized planning will produce a high-quality, standardized product or service. Economies of scale will reduce costs and ease access to services. “Say what you will about Mussolini,” they tell us — “he made the trains run on time.”
In point of fact, Italian trains seem to have been no more or less punctual under fascism than they were in the period immediately prior to Mussolini’s ascent in 1922. The claim of increased efficiency through bigger government, however, is worth examining.
Does the state improve our lives by more efficiently delivering certain goods and services than we could expect from unregulated market? The market’s answer to that question — in areas where the claim can be put to the test, at any rate — is an unqualified “no.”
“Public” (in other words, government) schools in America spend, on average, about half again as much per pupil per year as private schools. Yet somehow private schools manage to deliver — also on average — higher test scores, higher rates of college admission, and higher standardized test scores than their larger, tax-subsidized, state-operated competitors.
Health care? As a percentage of Gross Domestic Product, Americans’ health care costs have tripled since the US government intervened with Medicare, Medicaid, and regulations designed to push “private” health care into the centralized HMO health insurance model. In answer to those who write this off as a cost of improved technology and treatment, I have to ask why, then, have per capita health expenditures increased more for patients enrolled in public sector programs like Medicare than they have in the (now only semi-) private sector?
Well … what about delivering the mail? Surely the government does a better, more efficient, cheaper job of that than its market competitors, right? Well, no.
For one thing, it’s illegal to compete with the US government’s monopoly, the US Postal Service, on delivery of “first class mail” — non-emergency letters. That’s the first clue: Why suppress a competitor if you can simply out-compete him?
The state’s monopoly on mail was put to a test when the American Letter Mail Company went into business, offering delivery along the eastern seaboard for 1/3 the price that the US Postal Service then charged (6.25 cents — or twenty stamps for a dollar!) versus the government’s 18.75 cents).
Between 1844 and 1851, the two services competed on price. By the time Congress finally legislated the American Letter Mail Company out of business and firmly entrenched the US Postal Service as a monopoly, the going rate for delivery of a letter up to a distance of 300 miles was three cents — less than one-sixth of what it had been before the government’s monopoly was challenged!
To this day, only the US Postal Service delivers first class, non-emergency letter mail in the United States — not because they do it better or cheaper than others might, but because they’ve got the market cornered by law.
Lysander Spooner, the entrepreneur who founded the American Letter Mail Company, apparently learned some important lessons from his battle with the government’s monopolistic practices. He went on to become the founding father of America’s movement for a stateless society.
But back to those trains … do they run on time in the current government monopoly environment?
To a large degree, the answer depends on how one defines “on time.” Amtrak, the US government’s passenger train service, liberally defines the term. For runs of less than 300 miles, “on time” means within ten minutes of the scheduled time; for runs of more than 300 miles, they allow half an hour of leeway.
Even so, over the last 12 months (according to Amtrak’s statistics) only one Amtrak run (“The Pennsylvanian,” Pittsburgh to New York) has exceeded 90% “on time,” and at least one run (“Michigan Services,” Chicago, Grand Rapids/Port Huron/Detroit, Pontiac) came in at less than 50% “on time.”
I guess they just don’t make Mussolinis the way they used to.