from the book: Shadow Dancing on the Grave of Hope:
“As long as they get paid, they’ll keep doin’ what they’re doin’”. This was folk wisdom from the working class about poor snow plowing in the parking lot of a private building. As every powerful rule of human behavior, it applies to all human activity under all circumstances. As a matter of fact, the plower of snow was arrogant enough to state that plowing snow properly “was not his job”, a statement sure to bring about job loss for poor performance in the real economy. The person doing it wrong was fired. After that, the job was done properly by someone else. And that’s free enterprise for you.
None of this is to imply that economic consequences are the only relevant motivators for human beings. Surely some government workers are hard working and efficient. Surely some self-employed people are lazy and inefficient. These people do not last long in their jobs, self-employed or employed by others. Unless there are strong unions (employment insurance for the incompetent.) the non-hard working and inefficient will not last in private industry.
Although Friedman, one of the few economists who knows of what he speaks, uses different language for describing these outcomes, he outlines the contingency sets for spending-consumption. This is the logical set of possibilities which apply to spending money depending on whose money it is and whether the product is to be enjoyed by oneself or someone else.
The production side contingencies would look like this:
1). When a man works for himself, pays his own costs, and the quality of his work has economic consequences, he will concentrate on the costs of production and the quality of his work because both have economic consequences. He needs to produce the highest quality with the lowest cost. He will rarely seek to do the least amount of work because this will have an impact on quality (what his customers value) and quantity (how much money he will make).
2). When a man works for himself and someone else pays the cost, he will concentrate on quality, less on cost and work as hard and efficiently as he needs to.
3). When a man works for someone else, but pays the costs himself, he will concentrate on costs and concentrate on quality to the level required by his employer.
4). When a man works for someone else who pays the cost, and his results have no economic consequences, he will work neither hard nor efficiently. Since quality and cost has no impact on him, attention will be paid to neither and costs will be high with quality low. That’s government for you.
Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies
