EDITOR OF REDSTATE
Why Government Can’t Run a Business
In 1913, for instance, thinking it was being overcharged by the steel companies for armor plate for warships, the federal government decided to build its own plant. It estimated that a plant with a 10,000-ton annual capacity could produce armor plate for only 70% of what the steel companies charged.
When the plant was finally finished, however — three years after World War I had ended — it was millions over budget and able to produce armor plate only at twice what the steel companies charged. It produced one batch and then shut down, never to reopen.
The reasons listed for why government can’t run businesses include:
- Governments are run by politicians, not businessmen.
- Politicians need headlines.
- Government does not tolerate competition.
- Government enterprises are almost always monopolies and thus do not face competition at all.
- Successful corporations are run by benevolent despots.
- Government is regulated by government.