Thursday, November 25, 2004

And restricting candidate contributions will make election campaigns cleaner...

Recall at the health summit, when the premiers proposed that the feds take over prescription drugs, everyone scoffed. No pundit with anything resembling a brain and/or BS-detector took it seriously. But at the same time, most media devoted a bit of time to examining the concept, and tended to conclude, approximately: "This proposal has a lot of problems, constitutional and financial, and it's not going to happen. The savings and efficiency from a single buyer would be nice, but whatever."

Well, file that conclusion under "Things That Seem Correct Intuitively, But Have Now Been Disproven In Practice So Many Times It Might Be Time To Reassess". Sheila Fraser, you've done it again.

It's well-worth considering that the point of this might not be, "The federal government is inefficient", but rather, "there is a point where economies of scale reach peak benefit, and beyond that size, there are inherent problems which do more harm than good." Sounds like an Andrew Coyne piece; it may already be one, but I'm not worked up enough about this for some hard-target Googling.

The Western Standard on the shelves right now has a nice piece about "megacities" and amalmagation, and their nearly perfect record: total failure to achieve the cost savings and efficiencies set out as their objectives.

Without out doing much (any) research, I suspect that this is an articulated economic concept and it is not limited to government. Until last month, I worked for the subsidiary of a Fortune 500 company, and purchasing was mixed: some was done on a continent-wide basis, some regionally, and some locally. Conventional (municipal?) wisdom would dictate that efficiency is being sacrificed in regional and local purchasing (all that duplication!), but if it that were the case, it would have already been corporatized, because I don't think there's a thing they haven't done in the past 2 years to maximize efficiency on the overhead side. I would also note that even the most successful bulk purchaser in the world does not have identical products in all of their stores.

I'll be keeping an eye out for more data and analysis on this subject. If anyone out there can help edumacate me, that would be great.

And as a note to self, one of these days I'm going to have to dump out the "file" noted above, and run a list. The manila is bursting from the strain these days.

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