Corporations and governments: can’t have one without the other

Considering some of the shouting, one might think that politics has divided into two camps: government is bad and corporations are for the common good, or corporations are greedy and government is for the common good.

As too often is the case, the truth lies somewhere in the middle.

First, let’s look at the similarities.

Corporations and governments are organized by people for a large number of reasons.  The people who organize these entities do so to provide goods and services, to make money, to be famous, or to push certain views, both altruistic and selfish.  Neither type of organization is any better than the people who run the organization.  Success depends more on the leadership and the resources available than on the form.  Success also depends on the circumstances of the time.  If a large segment of the population is not interested in an idea, it will take a lot of effort to promote the idea, whether a new product or a new law.  On the other hand, if a very large segment of the population is interested in an idea, somebody in corporations or government will be working overtime to fulfill the population’s wishes.

The big difference is that the corporations are run by the few and governments are run by the many, if the many show up and vote.

As many misinterpret Adam Smith’s “invisible hand”, many misinterpret Milton Friedman’s the only purpose of a corporation is to “increase profits”.

“[t]here is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."  - Milton Friedman, “The Social Responsibility of Business is to Increase its Profits”, The New York Times Magazine, September 13, 1970

Many interpret this as the only purpose of a corporation is to increase shareholder value.  Unfortunately, they ignore “rules of the game” and “without deception or fraud”.  But what is shareholder value?  Is it a continued gain in stock price?  Is it a continuous stream of increasing dividends?  Or could it be the long-term provision of a good or service?  For example, do investors want to create a product that could take years to bring to market?  Do investors want to insure that medical services can be provided to a community for decades rather than maximize profits for the short-term and destroy the community long-term?

Many point to the problems of MNSure and ObamaCare as examples of government inefficiency.  But guess who provided the computers and software for these health insurance programs?  Private companies!

And private companies have not been known for efficient, trouble-free rollouts of new products.  How many auto recalls are there every year?  Has every computer program or system you purchased or downloaded been free of bugs?  It seems every time I get a notice of an app update, the description includes “bug fixes”.

In the “bad old days” of mainframes, it was really a major milestone when a computer ran a whole day without a crash.  Now things are much better.  My laptop, which is more powerful than any mainframe I worked on, might go a whole week without some kind of frustrating error, including freezes.

MNSure and Obamacare are massive systems requiring massive co-ordination of many pieces.  As we don’t give up on our computers, we shouldn’t give up on massive projects that don’t work perfectly on the first day.

"I'm as confident of this as I would be that when the first cars didn't work well, it wasn't time to return to horses and buggies; it was time to improve the cars. This is the new technology; there are kinks to it and it's going to take some time to work them out.”
Joel Ario, quoted in “Contractor’s report slams MNsure weaknesses, readiness”, Elizabeth Stawicki, MPRNews, 2014-06-18

Are you collecting Social Security?  Is your check posted to your bank account on the promised day every month?  But it was not always so.  Like getting computers to not crash, the rollout of Social Security was not without glitches or without critics who claimed dire consequences.  Like “nationalization of wheat fields would soon follow” and Americans would be reduced to passive servility.  It would take forty years of tinkering to have ninety percent of Americans covered by Social Security.

See “What about Social Security’s rollout?” Bruce J. Schulman, 2013-10-29, Reuters

An interesting contrast to the call for less regulation and taxes is the call by some of the same people for government subsidy.  How many stadiums for billionaires have been built without government subsidies?  How many companies have chased after the best subsidies and tax breaks to determine the location of a new office or factory?  Are these the same people who say government shouldn’t be picking winners and losers?

Consider the big howl from Congress when Solyndra collapsed.  But nothing was said about the success of Tesla.  Both received start-up subsidies from the Federal government.  Tesla paid its loans back!  Also among those who received subsidies were Compaq, Intel, and Apple.  Now Apple is the largest company in the world in capitalization!  And looking for ways to avoid paying back its benefactor through taxes.

For a lot more on how government has fostered many other successful innovations, see “The Innovative State: Governments Should Make Markets, Not Just Fix Them”, Mariana Mazzucato, Foreign Affairs, January/February 2015.

- Mel wishes a few far-sighted Republicans and Democrats would start a Pragmatic Party.

This was also published in the Duluth Reader, 2015-03-26 at 2015/03/26/5005_corporations_and_governments_cant_have_one_without

Excessive Corporate Inefficiency

This afternoon I got a call from the Essentia Health Fitness Center that I have not made the annual payment for use of the facility.  We never received any notice that this was due.  Last year we were told at the reception desk, and we were able to pay there.

This year, the phone call was my first notice from anyone, Essentia, Medica, or Silver&Fit.  The administrator said we had to pay Silver&Fit directly.

Now the fun begins.

I called the 800 number for Silver&Fit.  I was told by the pleasant recorded voice that there was a very long wait.  Have you seen anything in the papers about this like you’ve seen about MNSure’s wait times?

I went to the Silver&Fit website.  When I began the registration process, it knew my address and phone number just from my name, but then efficiency disappeared.

I had to enter my birthdate in a specific format; the format was not described next to the box. I was asked to select a security question and give the answer.  I clicked “Next” and then I was told how to enter my birthdate.  But then it would not go any further until I selected a security question again.  It showed my answer, but it wouldn’t show the drop-down list again.  It said I needed to select a security question??

I gave up and started a new session.  I ran into similar problems again.  On the third try I found the form for paying by money order.  No form for check or page for using a credit card.

I gave up on that and sent an email of dissatisfaction.  At least there was a link to do so.

I went to the Medica website and managed to find a form for paying by check.

So we each filled out a form, wrote our checks, and put them in a single envelope.  That will probably screw things up at Silver&Fit.  One of us will be credited with another year’s membership and the other not.

With Congress screwing up the Postal Service, it will probably take more than three days to arrive at Silver&Fit, two more days to get to a clerk to open the envelopes, and two more days for Silver&Fit to notify Essentia Health.

It is not the form of an organization, it’s the personnel and management.  Good and bad of these are found in both government and corporations.

BTW I went to St. Louis County Auditor’s License office last week to renew my driver’s license.  The longest part was filling out the form.  Somebody waited on me right away, had me sign the form, took my money, gave me a copy, and asked me to step over to the eye exam device and the camera.  It took me longer to take off my coat than to have my picture taken.  And all this was done with cheer and courtesy.

Software glitch gives ambiguous headline

The following is from the Olive edition of the Duluth News Tribune, 2014-12-19:

leaderskilledinairstrikes Three top Islamic State

This is the headline given when one asks for an expanded view of an article.

Just what does is mean?

“Leader skilled in air strikes”

or

“Three top Islamic State leaders killed in airstrikes”

This kind of headline frequently appears in the Olive Editions of both the Duluth News Tribune and the Star Tribune.  The Olive Edition is the newspaper as printed with the user benefit of expanding a page or a given article.  Really neat when it works.  But too often, a page is blank for several minutes.

The irony is that both the Duluth News Tribune and Star Tribune frequently have front page stories about problems that MNSure may be having.  Granted, this garbled headline problem is a minor nuisance compared to delays in accessing MNSure, but...