46.         Contrary to the statement's premise, my view is that businesses are less likely
than government to establish large bureaucracies, because businesses know that they are
more vulnerable than government to damage resulting from bureaucratic inefficiencies.
My position is well supported by common sense and by observation.
      First, public administrators lack the financial incentives to avoid bureaucratic
waste. In contrast, inefficiencies in a private corporation will reduce profits, inflicting
damage in the form of job cuts, diminishing common-stock value, and reducing
employee compensation. These are ample incentives for the private firm to minimize
bureaucratic waste.
      Second, there is almost no accountability among government bureaucrats. The
electorate's voting power is too indirect to motivate mid-level administrators, whose
salaries and jobs rarely depend on political elections. In contrast, private corporations
must pay strict attention to efficiency, since their shareholders hold an immediate power
to sell their stock, thereby driving down the company's market value.
      Third, government is inherently monopolistic, large, and unwieldy; these features
breed bureaucracy. Admittedly some corporations rival state governments in size. Yet
even among the largest companies, the profit motive breeds a natural concern for
trimming waste, cutting costs, and streamlining operations. Even virtual monopolies
strive to remain lean and nimble in order to maintain a distance from upstart
competitors. When government pays lip service to efficiency, shrewd listeners recognize
this as political rhetoric designed only to pander to the electorate.
      In the final analysis, financial incentives, accountability, and competition all
distinguish private business from government, both in teems of their likelihood of
establishing large bureaucracies and in terms of the damage that these bureaucracies can
inflict on the organization.