Minnesota, Fraud, and Selfishness

The recent examples of fraud in Minnesota are one of the greatest examples of government ineptitude and waste in recent memory. Billions of taxpayer dollars were sent directly into the hands of criminals. The weakest in society were taken advantage of those with no regard for human dignity and right or wrong. The fraud was not a clever scheme, but rather a series of half-hearted attempts at theft that were enabled by an administrative state that seemed to distribute money with little care as to where it ended up. The people who should have recognized the depths of the problem were either incompetent, lazy, or focused on more polemic matters. They had no personal investment in how effectively the money was being used, and now they are paying for it in a massive national scandal. However, both the fraudsters and those who allowed the fraud share one key similarity: they are extremely selfish. The profit motive of the fraudsters let them siphon money away from an administrative state with selfishness that prompted them to laziness. 

The profit incentive pushes entrepreneurs to set up frameworks for their employees that reward effectiveness and push them away from using time poorly. While each employee is not driven by the profit of the company directly, someone in charge of them will ultimately benefit from higher efficiency, and thus companies naturally have no great tolerance for waste. While many companies also are driven by altruism, the alignment of selfishness with productivity serves as a safety net for even those who would not choose to benefit the world by their own choice. Companies who do allow waste and fraud will get out competed by others and soon be forced to leave the market. While profit is not the only driving force of a company, its necessity keeps businesses on track and does not allow the same sort of unbounded destructiveness we see in government. Even if we could count on people in government positions to be driven by altruism, differing opinions about the best and state, for the world would make significant action almost impossible.

Government selfishness takes a form that is far less beneficial. There is no clear marker of success to keep people on track. The lack of an explicit profit motive, or even something similar means that selfishness pushes government employees towards complacency. When many higher ups have little motivation other than maintaining their jobs and salaries, the incentive to make subordinates more effective diminishes in favor of maintaining the status quo. If programs have been running a certain way for years or employees have been underperforming for years, the risks of attempting to do anything are often much greater than the benefits of staying under the radar for the selfish. Even when fraud is evident, selfishness would prompt officials to shirk from the added workload and possible public relations nightmare of exposing it. In a business, exposing a weak point is often praised because of the direct ability to increase profits, yet in government, exposing weak points in the past merely makes people look incompetent and as though they should not be given another chance to rule. The desire to maintain the status quo in the desire to cut waste are both present in government and business, yet the profit incentive allows the waste cutting principle to overpower far more often in business. While selfishness in business can protect organizational effectiveness, in government it has a far greater tendency to produce apathy, as supervisors having no incentive to push people to higher performance lets laziness reign. Without the driving core of a profit motive, the selfishness of those in the administrative state becomes a liability rather than a safeguard.

The Minnesota fraud situation presented a clear example of what happens when two different forms of selfishness combine negatively. The apathetic state officials willingly turned a blind eye to fraud for years as the perpetrators selfishness drove them to commit ever more theft from the people. The direct profit incentive of Medicare and childcare fraud facing no obstacles from the selfish apathy of the state officials was allowed to run free. Both forms of selfishness were wrong, but the triumph of the scammers shows just how important institutional incentives are. Those who were being defrauded had access to billions of dollars of more resources than the scammers did when they started, yet the scammers were able to make quick work of the state’s fraud detection agencies. Those in charge were more concerned with appearing to be moral than doing their job by orienting everyone within their departments to rooting out fraud. Every dollar that is sent to the government will be used to create far below its potential value than if it were given to almost any private citizen. The selfishness for profit can stop the worst levels of laziness, rather than exacerbate the apathy that is deep at the root of a Federal and State government.