Sterling's Truths for Life #15

Explanation

Responsibility with money is a two-dimensional consideration.

1. Does your supply come out of your own effort earning it?
2. Does your consumption go to your own benefit when spending it?

If you earn your money, then when it is spent, there’s a value associated with it. It’s the reason why all games must contain a grind. If you have to work in some tedious way to earn points or items or abilities or whatever, those things feel like they mean something. They attain value. But if you just use a cheat code to get them, there may be a certain amount of fun in that, but it is short-lived. Earned money has more intrinsic value to a person than money that is received as a gift.

Meanwhile, when you go to spend money on yourself, there’s always that pull towards a frugal choice. If you’re going to get something out of it, can you stretch the money a little farther to get more or to leave you some left over to save for a rainy day? But if you’re spending the money without seeing any benefit for yourself, you’re free to spend it freely to achieve a goal without worrying quite so much about making it go further.

This leads to a four quadrant graph of responsibility:

A government official neither earns the money nor receives direct benefit from its expenditure. The money comes to them from a line item in some budget process and must be spent to achieve some stated budgetary requirement. As such, there is very low need to be efficient. This is why so many government accountability systems are aimed at enforcing arbitrary rules of responsibility. For example:

1. When buying, government agencies are frequently required to send out multiple bids, and required to take the lowest or go through some oversight process to ensure that the bid accepted is somehow the best.
2. When throwing equipment or furniture or other valuable items away, government agents are required to try to transfer it to another department, go through long processes to eliminate it, and when it finally goes to a dumpster are forbidden from taking it for themselves or allowing other government agents to benefit from it.
3. Government agencies are encouraged to use specially negotiated contractors or private entities to perform work as these are already negotiated down to a fixed low price.
4. Agencies are often subject to loss of budget if they do not spend their whole budget, which is supposed to be an accountability factor, but often has the opposite effect, encouraging agencies to spend money to fill their budgets to avoid losing money they might need next year.

These systematic, rule-based accountability systems in no way replicate real responsibility and accountability. This is one of the many reasons why government agencies are often inefficient spenders, have top-heavy administrative staffs, generate lots of paper to justify every expense, and are generally slow to act or change.

As such, government is the choice when you want an inefficient or slow organization running something. Justice should be done slowly, to a certain extent, and filled with paperwork to be done well. The more inefficient wars and armies are run, the better for mankind overall. Peacetime treaties and trade organizations are also great for governments because they’re so slow at implementing, enforcing, or changing such things, the market is generally well ahead of them. And taxes and ensuring good interstate commerce, which is just the internal version of treaties and trade organizations.

Much else and you should probably not be giving government money to do that. You really don’t want an inefficient education system or healthcare system or welfare system. These things are better run privately, either not for profit or for profit or both.