By John Conlin
In the flow of this 3.8 billion-year-old river of life it is death, not life, that drives evolution. Death is that which sculpts the flow of life. In the marketplace of business it is failure, not success, that shapes, sculpts and hones that which survives.
Whether it is an inability to survive in ever-changing physical conditions or an inability to convince enough people to purchase your goods or services at the price you require, demise of the entity controls and shapes what remains.
Death and failure are the invisible hands that ensure these systems remain somewhat in balance. They put a brake on a natural tendency for expansion since growth is only allowed via success. There is simply no other way. They also put a brake on poor management by sooner or later severely punishing unproductive behavior.
Death and failure also create a dynamism that infuses the entire system and thus guarantees a flow of experimentation, change, improvement, adaptation. This occurs regardless of any individual entity’s desires. As the great business guru W. Edwards Deming noted, “It is not necessary to change. Survival is not mandatory.” This is true whether life or business.
There is one exception to this, and it puts the entire planet at risk. These entities are the nonprofit organizations we call government. Unlike the for-profit world, these entities seldom have the mighty chisel of market failure to shape and sculpt them.
In addition, governments do not have to create at least one dollar of value for every dollar consumed, a feat they seldom if ever achieve. Thus the more government takes, the poorer the rest becomes. And unlike the living world, demise of the entity only rarely occurs.
Thus the naturally controlling forces that bring both dynamism and environment-driven adaptation are absent in these entities we call government. If they are not contained by some outside force, they will have the strong tendency to accept and even propagate poor management and decision-making while also being guaranteed to grow until catastrophic failure.
This is not driven by the people employed. It is not driven by those in control. It is simply the nature of these organizations. They are artificial in a way of no other organization. There is no moral aspect to this; it is not good or bad, it simply is.
A 2000 report from The Tax Foundation notes, “Government expenditures as a percentage of GDP have growth exponentially since the beginning of the century. In 1900 total government expenditures equaled 5.5 percent of GDP. By 1992 this figure had increased more than six fold to 33.1 percent. This year government expenditures will have dipped to 28.9 percent of GDP.” In 2018 it is estimated to be up to 35.6%.
Although government does not have death or the marketplace to confine it and drive it to improvement, it does learn and expand. For the first 141 years of this country’s existence, until 1917, the federal government raised most of its money from customs duties and excise taxes. With the creation of the federal income tax this all changed.
“Adjusting for inflation, in the 81 years between the enactment of the income tax in 1913 to 1994, government spending increased 13,592 percent!” And that march hasn’t slowed, regardless of which political party is in power.
Also from this same 2000 report, “The composition of government expenditures has also changed dramatically over time. At the turn of the [20th] century most government spending was used to pay for education and training, national defense, and interest payments. Today much government activity involves transferring income from one group to another. This year transfer programs are expected to account for 41.6 percent of government expenditures, a figure that was just 3 percent in 1900.” In 2014 transfer payments made up 70 percent of all government spending!
This too shows the entity of government learning for ways to survive and prosper. Placing the entity as both the enforcer and middleman of these transfers guarantees itself even more permanence and power, as does effectively capturing a major political party.
So we are left with a reality of these entities constantly striving to expand, and showing significant success over the past hundred years, while at the same time lacking an effective outside source that will contain and carve them toward constant improvement and excellence.
This isn’t a moral or even political issue; it is a physical reality and one we ignore at our own peril.
John Conlin is an expert in organizational design and change. He also holds a B.S. in Earth Sciences and an MBA and is the founder and president of E.I.C. Enterprises, a 501(c)3 nonprofit dedicated to spreading the truth here and around the world, primarily through K-12 education. E.I.C. Enterprise’s GoFundMe page can be found at https://www.gofundme.com/so-you-believe-in-science-eh.