Monday, December 8, 2008

Evil Walmart vs. benevolent government in helping Katrina’s victims
(liberal propaganda of WalMart’s effect on communities)

Another proof to immortal truth: anything that can be done privately is better done privately. Including philanthropy.

A study of evil Walmart’s help to Katrina victims, compared to that of FEMA. (“The top causes of a Black man’s death in the USA include AIDS, chicken wings, guns, and FEMA.” — Boondocks.)
Wal-Mart produced desirable outcomes in the Katrina event because it had both the right knowledge and the right incentives in place, compared with those of government agencies [the U.S. Coast Guard is not included], declares economist Steven Horwitz. “Whether organizations are able to acquire such knowledge and have the appropriate incentives depends on the institutional environments in which they operate and the way in which the organizations are structured,” he continues.

“In general, the environment of market competition is superior to that of the political process in providing both the knowledge necessary to respond to people’s needs and the profit incentive to act on that knowledge in ways that create value. Within the political process, agencies face different incentives, as they do not operate by profit and loss. Instead, government agencies are more often concerned with pleasing other political actors and finding ways to expand their budgets and power. This often makes them less sensitive to the direct needs of the people who rely on them to get specific tasks accomplished.” On the market’s superiority at providing both the knowledge and incentives for efficient resource use and greater value creation, Horwitz directs interested readers to the essays in F. A. Hayek, Individualism and Economic Order, Chicago: University of Chicago Press, 1948.

“In addition, the absence of a competitive market for their product means that, in general, government agencies face knowledge problems in determining what their output should be and how best to produce it. However, government agencies with a more decentralized structure that puts them in more direct contact with the people they serve may be able to overcome these knowledge problems. Larger, more centralized government agencies will lack the incentives of firms in competitive markets as well as the knowledge provided by true market prices, but more decentralized ones may do better along the latter dimension. [...]”
Who could have thought that evil WalMart that cares only about its pockets, kicks small cute businesses out of local area, trades with China and hates labor unions would be more effective in helping poor people than the government? Hmm… Maybe somebody with the right idea of what the government’s role is supposed to be?..

No comments: