Wednesday, July 14, 2010

The trouble with bigness

By Don Klein

It’s a big world. At this moment there are some 6,855,726,713 people living on Earth, give a few million more every week or two. Soon there will be 7 billion people. By time my eight-year-old granddaughter is eligible to vote the world population will be well on its way to 8 billion souls.

That’s a lot of people. The world is mired in population growth and will only get worse as the years pass. The question is will we be able to survive as a species? The earth has it’s limits, but human growth apparently has none. How much population growth can we expect on a finite globe?

I consign answers to these and other questions to people a lot younger than me who will have to endure the future. This is a subject for those who think in scores of years, who do not measure the future in single years or at most in a decade, like me.

There is one thing I can talk about, however. A big world requires everything about it to be big. Selling a million records is no longer the phenomena it once was. A high school dropout can "write a song" after lunch, record it the next day and a few weeks later be a millionaire because it has caught on with just small segment of the population while millions of others are not even familiar with the performer’s name.

When you have a country like the United States with 310 million population and sell a million of anything you have appealed to one-third of one percent of the available market. In other words if you have a product that only a tiny fraction of the public buys–- a record, a Tee shirt, a picture frame, a widget –- you could be a millionaire these days.

Extend that throughout the world with its 6.8 billion people and you realize what bigness is. This means in order to compete worldwide you must be a heavy hitter. In sports it means the National Football League has to show its mettle in Europe and Asia looking for new markets. Major League baseball recruits from Latin America, Asia and even Australia for players to appeal to foreign audiences. It explains why all of a sudden the World Cup became so popular in a country like ours that once confined soccer to a minor slot in high school and college sports.

In business, bigness is even more important. Although there are still a healthy smattering of small businesses, the super market has wiped out the Ma and Pa corner grocery. There are giant restaurant chains supporting both table cloth sit-down restaurants and fast food emporia.

Huge agricultural combines control the food industry in the US and elsewhere. Household retailers have gotten so big that even onetime monster enterprises like Montgomery Ward cannot compete anymore and the American auto industry is down to a mere three manufacturers-going-on-two as Chrysler struggles in its death throes.

Insurance companies are larger and stronger than ever, oil companies make billions by the minute and medical and pharmaceutical services are so wealthy that most doctors can turn away new patients and drug companies have profits equal to the gross national product of many nations.

With all this the world is out of balance because as bigness continues, there is the sad plight of the ordinary guy. He still struggles at a pathetic level to keep all these mammoth institutions healthy.

In order to deal with unabated bigness man created big government and that perhaps is the worst disappointment of all. Big government usually means plodding government. Services are slow to begin and sadly, once having begun, it is virtually impossible to stop even when no longer needed. Village and town councils are much more efficient, if less flush.

Presidents and Cabinet secretaries "make" policy but lower level government workers decide "how" those policies are implemented. And few ever like what they are doing. The bigness of government easily allows for irresponsibility. So many people have their hands in the pot while policy is cooking no one can be blamed when things go wrong. This is the government workers paradise, their insurance policy.

You can always find a retired doctor who loves to talk about his work, or a retired butcher or bus driver, or accountant, or even journalists. But I have never met a retired government worker who had anything good to say about his/her years of service. They all have horror stories to talk about.

There is little incentive when you have a job which provides you with incremental salary boosts, offers you promotions whether you deserve it or not, and where you are protected by concrete civil service rules even when you fail to live up to the lowest of standards.

That explains I suppose the failures of the Minerals Management Services of the Department of Interior, on whose shoulders rests a large part of the blame for the BP spill. It also explains the failure of the Securities and Exchange Commission in not monitoring Wall Street manipulators prior to the financial meltdown in 2008 and Fannie Mae and Freddie Mack for the mortgage scandal.

Government regulators just didn’t do their jobs despite the importance we attach to their work and despite being well paid. In the end, no one was punished for failing to do what they were supposed to do, unlike private industry.

There is no responsibility in government. There are just benefits hidden behind the myriad of employee rules and thousands of ambiguous regulations.
That’s the evil of big government. But unlike Ronald Reagan’s maxim to the contrary, enforced regulations are necessary. As we get bigger, government laxity could become even worse until we start dismissing people for failing to do what they are paid to do.

It will not solve all our problems but it certainly will help.