46.         Contrary to the statement's premise¹, 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 bureaucratic² inefficiencies.
My position is well supported by common sense and by observation.
      First, public administrators³ lack the financial incentives⁴ to avoid bureaucratic
waste. In contrast, inefficiencies in a private corporation will reduce profits, inflicting⁶
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 bureaucrats⁷. The
electorate⁸'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 shareholders⁹ hold an immediate¹⁰ power
to sell their stock, thereby¹¹ 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 motive¹² 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 rhetoric¹³ designed only to pander¹⁴ to the electorate.
      In the final analysis, financial incentives, accountability, and competition all
distinguish private business from government, both in teems¹⁵ of their likelihood of
establishing large bureaucracies and in terms of the damage that these bureaucracies can
inflict⁵ on the organization.

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