(The first episode of this little drama is here:

• Thoughts on motivation

Here’s the quick summary: industries are motivated by profit, and governments are motivated by power.  Neither motivation necessarily — let alone consistently — favours anything even glancingly approaching “what’s best”.)

A few days ago, a friend of mine gave me what may be a permanent case of the giggles by proclaiming that “the whole point of having things publicly managed is to introduce accountability” in one of our periodic (and impressively civil) “which is worse: government or industry?” debates.  Now, it seemed facepalmingly obvious to me at the time that industry is far more “accountable” (notice how we haven’t defined that yet?) than government, but my friend put forth some fairly impressive counterexamples.  One of them: the American telcos that are presently trying to weasel out of any blame for bending over to the Bush 43 administration’s (thoroughly unconstitutional) domestic espionage programme.

Not so obvious any more.

Let’s talk about accountability.  According to (heheheh) the Government of Canada:

Accountability is the obligation to demonstrate and take responsibility for performance in light of commitments and expected outcomes.

Vague, nebulous, and not what we’re after at all.  To parse this definition, we’d have to define “responsibility”, and we all know where that goes.  Fortunately, we can simplify the problem: what we’re really after is this:

What motivates government (and industry) to perform competently, or to not do harm?

Now we’re back to motivation.

Let’s start with industry.  In a reasonably densely-populated and largely unregulated free market, profit motivates corporate behaviour (or rather, the desire to cash in on the corporation’s profits motivates the individuals who control the corporation).  Feedback on corporate profit is instant and incremental: if your company’s being run in an incompetent or malign manner, I can take my business across the street to your competitor; however, it takes a lot of people switching suppliers before you’ll notice.  You’re rewarded for being less of an asshole than your competition by slowly (or rapidly) accumulating loyal customers.

Of course, if every company in your market segment is an asshole, you lose.  However, if any of those companies reduces its asshole factor by even a tiny amount, it stands to gain a great deal of new customers.  For example, when Toyota introduced the Prius, it instantly became all that and a bag of chips to much of the “eco-conscious” crowd.  (We won’t ask about the environmental impact of manufacturing all those nickel-hydride batteries.)   This is what we call “enlightened self-interest”.

Compare the instant-feedback model of business “accountability” to what goes on in a representative democracy.  Elected officials are motivated by power: namely, getting (re)elected every four or five years.  This is a big chunk of feedback, but it doesn’t come around that often.  Most voters don’t remember what their representatives did five weeks ago, let alone five years ago.  Elected officials are only ever held accountable for actions that the voters remember with enough intensity to punish by voting the other way.  (Witness, for example, the Iraq war and the 2006 mid-term elections in the United States.)

Still, if you don’t like your representative, you can vote for someone else in the next election.  If enough of your fellow voters agree, you get results: a new representative.  This doesn’t help you if every (viable) candidate is an asshole, of course (witness, again, the 2006 mid-term elections).  The stakes are higher for a politician than for a business: for the politician, it’s all or nothing, win or lose; for the business, it’s a slice of market share.  Hell, even IBM and Atari are still in business.

This is where comparing government and business gets interesting.  In a free market, every dollar you spend at one company improves its standing relative to its competitors.  It’s a finely granular system.  A democracy with proportional representation is less granular: a party needs a minimum number of votes for each seat.  A first-past-the-post democracy is less granular still.  Thus, politicians aren’t motivated by the asshole factor of small-party candidates.

I’ve ignored (’til now) one rather important fact: this feedback is motivated by perception of assholes, and both businesses and politicians lie (“advertise” and “campaign”, respectively) to look better than they are.  This is another interesting point of comparison: feedback to corporations is instant and incremental, whereas elected officials only get feedback every election.  Thus, if a corporation behaves incompetently or maliciously and wants to look good, it has to lie about it all the time.  As soon as the veneer slips, you’re free to switch to a competitor.

Politicians, on the other hand, only have to lie to you while they’re campaigning.  They don’t even have to do what they promised: as soon as the votes are counted, they’re off the hook ’til the next election.  (Witness, yet again, the 2006 mid-term elections.  Remember how Pelosi &c vowed to get American troops out of Iraq?)  Even better, those campaign-trail promises are broken right at the start of the representative’s term, maximizing the amount of time s/h/its voters have to forget that they’d been suckered.

I have to give the edge here, ever so slightly, to businesses over politicians.  As with the first article, it’s not so much a matter of “business is good, government is bad” as it is that, as poorly accountable as even idealized businesses are, elected officials manage to be even worse.

Note that in all of the Communist countries we’ve ever seen, you don’t get either form of accountability, limited though they are.  A command economy is insensitive to market pressures, and an authoritarian government doesn’t give a shit about what the electorate thinks.

But wait!  We’re not done yet.  There are two more power centres — one private, one public — which I haven’t included in the above discussion.  I’m thinking of monopolies and government bureaucracies.

Your ability to make a business suffer for being run by assholes depends upon competition — you have to be able to take your money elsewhere.  If one business holds a monopoly on a market — the Coast Mountain bus company, for example, which holds a monopoly on bus service in greater Vancouver — you have nowhere else to go.

This makes an astounding difference.  For example, Telus has an effective monopoly on copper-wire telephone communication in most of Canada.  I’ve dealt with them before, and found their representatives surly, unhelpful, small-minded, vindictive, and only glancingly competent.  This doesn’t bother them, as they have no competition for the service they offer.  On the other hand, Telus Mobility must compete with any number of other cell phone providers.  Their representatives — remember, this is a different branch of the same company — have been uniformly polite, respectful, reasonably competent, and even willing to admit that I might know more about cellular telephony than they do.  I actually enjoy dealing with them.  (I no longer have a land-line.)

About the only way to deal with a monopolistic business is to find a way to make it irrelevant.  I’ve made Telus’s land-line monopoly irrelevant to me by switching to a cell phone.  If I owned a house, I could make the local power company’s power-grid monopoly irrelevant by installing a solar-and-wind power system.

I can’t, however, make the tax-man’s monopoly on legally-sanctioned armed robbery irrelevant, no matter how much I’d like to.

(For those of you keeping score at home, we’re now into the “government bureaucracy” section of this rant.)

Businesses are motivated to play nice (to even a limited extent) by the risks of competition; politicians are so motivated by the prospect of losing an election.  Government bureaucrats face neither risk, particularly bureaucrats with a degree of seniority who don’t hold appointed posts.  Those institutions are the tools that give elected officials the power after which they lust; no elected government is going to curtail or dispose of them.

Here’s another example.  I criticized my riding’s Member of Parliament once — here, if you’re interested — and within a day someone left a conciliatory comment in her name underneath the post.  (Note that the readership of my blog is something around ten visitors a day after the impromptu vacation I took back in November.)  I’ve bitched out Revenue Canada pretty much from the beginning, and haven’t heard a peep from them.  (Not that I mind!)

Funny how people seem to keep their shit wired tight when being an asshole has immediate consequences.