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government is "inefficient" only when "efficiency" is defined in terms that favor private enterprise.
if the government attempts to do something that private enterprise does better, like market pricing and strightforward cost effective resource allocation, then yes, the government is inefficient.
but if you talk about things that the government should be doing, namely stepping in where the market cannot accurately assign a price to all participants in a transaction, then the government can do a fairly efficient job where the market cannot.
examples include military defence, where we all benefit from a military. a competitive market would allocate security to different areas very differently and would quickly disintegrate and segregate our nation. a common tax to pay for a common military is far more efficient.
another example is governmental action against industrial pollution. the market may view the manufacture of widgets as cost effective resource allocation only because neither the buyer nor the seller pays the price of the pollution caused in the manufacturing process. this is borne by local residents instead. government can do several things, from banning widgets to fining the seller to auctioning pollution rights. in any event, government can make this process genuinely efficient, instead of merely efficient for the buyer and seller at the expense of others.
on the other hand, anyone who's ever dealt with governmental bureaucracies knows that governments are not models of prompt service. like i said, the private sector does some things better.
but consider this. as a rule, the private sector will only serve the profitable portion of the market. the rich get the first taste of anything because you can charge a bundle while manufacturing only a few. only later does it become profitable to make your goods affordable by the masses. and even then, you still won't reach everyone. the private sector will never serve more than 98% of the market, because it just doesn't pay to reach that last 2%.
government, on the other hand, will indeed reach everyone. it's not "efficient" in the private sector, profit-seeking sense of the word. but it is "efficient" in the social justice and fairness sense. not to mention that we all benefit from knowing that everyone is served. for example, the postal service has always delivered to EVERYONE. for $0.37, they will still fly your letter, drive your letter, and take a river boat or husky sled to get your letter to its destination. the private sector would have long since discontinued service to remote areas. and we all benefit from this, and this is an efficiency that the private sector could not have brought to the country.
but if i need it there tomorrow, i'm still using fedex....
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