In a 1991 article in the Wall Street Journal, Milton Friedman explained Gammon’s Law, which states that large, bureaucratic organizations become black holes that suck in more and more funds, but produce no more.
Some years ago, I came across a study by Max Gammon, a British physician who also researches medical care, comparing input and output in the British socialized hospital system. He took the number of employees as his measure of input and the number of hospital beds as his measure of output. He found that input had increased sharply, while output had actually fallen. He was led to enunciate what he called “the theory of bureaucratic displacement.” In his words, in “a bureaucratic system . . . increase in expenditure will be matched by fall in production. . . . Such systems will act rather like `black holes,’ in the economic universe, simultaneously sucking in resources, and shrinking in terms of `emitted production.'”
Gammon’s study didn’t stop the British government, under Tony Blair, from trying to improve the flagging performance of the healthcare system by pouring money into it. Over a period of about 10 years, the amount of funding was nearly doubled. Yet performance hardly changed. The system is just a black hole, a money pit.
Gammon’s Law has innumerable applications. Consider the Transportation Safety Administration. The folks at TSA didn’t perform very well on their latest tests. In fact, they were able to catch only about 5 percent of contraband items.
Department of Homeland Security said Monday that the acting administrator for the Transportation Security Administration would be reassigned, following a report that airport screeners failed to detect explosives and weapons in nearly every test that an undercover team conducted at dozens of airports. According to a report based on an internal investigation, “red teams” with the Department of Homeland Security’s Office of the Inspector General were able to get banned items through the screening process in 67 out of 70 tests it conducted across the nation.
The failed tests included, for instance, having a tester walk through security with a fake bomb taped to his back. The fake bomb sets off an alarm at the scanning machine, but agents doing the subsequent pat down fail to locate the device. Top notch!
So: a success rate of 5 percent. Good enough for government work?
When the TSA performed poorly on tests back in 2009, the attempted solution was to spend more money. Guess how that worked out.
In addition, the review determined that despite spending $540 million for checked baggage screening equipment and another $11 million for training since a previous review in 2009, the TSA failed to make any noticeable improvements in that time.
$551 million spent, and nothing to show for it, just a black hole, as Gammon’s Law would predict.
Government has no money of its own–that $551 million had to be taken from the taxpayers. If left in their hands, the taxpayers would have put that money to good use. If a new home costs $250,000, then $551 million amounts to 2,204 new homes. Assuming 2.5 persons per household means that the money wasted by TSA would put 5,510 people in new homes, bought and paid for. Instead…nothing.
TSA should be abolished, and responsibility for security placed where it belongs–with the airlines. But abolishing TSA seems a political impossibilty. Think about it; have you heard any prominent member of the Political Class propose abolishing TSA? Democrats love TSA because it provides union jobs and therefore Democrat campaign cash. Republicans love TSA because it shields large corporations–the airlines–from accountability. Only the traveling public dislikes TSA, but that is of little concern to the Political Class.
Finally, consider the video below in which John Stossel documents the inefficiency of TSA. Our favorite bit starts at about 5:10 and concerns Glacier Park International Airport, which serves Montana’s Glacier National Park. The airport’s director explains that TSA assigns her airport the same number of screeners year round, even though traffic triples during the summer tourist season. That’s government. But how would the private sector handle it? Does anybody really believe that the private sector, in response to a tripling of demand, would remain totally unresponsive and inflexible, the way the TSA does?
Compared to today, life in the 19th century was simpler, and change came gradually and infrequently. In those days, the relative inefficiency of government perhaps mattered less. So Bismarck or the Russian Czar could bureaucratize social services without a catastrophic loss of efficiency. The bureaucrats moved slowly, but in the 19th century, so did everything else.
But now we’re in the 21st century, and in this complex and rapidly changing world, it makes no sense to put important tasks such as airline safety, schooling, or health care in the hands of incompetent and sclerotic bureaucracies–behemoths that reason with the cognitive ability of a cow and react with the dexterity of a decrepit elephant.