All Commentary
Tuesday, May 16, 2017

Government Agencies Don’t Offer “Customer Service”

What is a customer? It's really not that hard to figure out.

Customer service call centers exist primarily to provide product support to consumers. But what about those “customer” call centers where I don’t consider myself an actual customer?

The Internal Revenue Service (IRS) has a toll-free customer service phone line along with the Bureau of Driver Licensing, some municipal authorities, the Transportation Security Administration (TSA), and a plethora of other organizations created by government force. So, why is being referred to as a customer here so infuriating? Because we have no other choice.

These organizations may have their own logos, offices full of employees interacting, and accounting departments distributing paychecks, but they are not the same as private businesses. 

So, if I’m on one side of the counter transacting with an employee on the other side, I’m a customer just like at the local hardware store or drive-thru window, right?

Don’t be fooled: State-run authorities don’t operate like a business.

Hardly. There’s a big difference. And to truly understand why we need to dig deeper.

State Monopolies 

Rather, these institutions are monopolies. A monopoly represents “too big to fail” institutions that the government protects from market competition. By outlawing other entities from creating businesses that seek to meet the same ends, they ensure that consumers have no choice but to turn to the government. Think first-class mail delivery or Social Security. Competition is not permitted.

Do you like having options? Of course you do.

What Is a Customer?

It can get confusing. So, what is a customer? It’s really not that hard to figure out.

When attempting to pinpoint what exactly a customer is, the main defining characteristic lies in recognizing whether or not the individual in question has the right to say, “No thanks, I’ll be shopping elsewhere.”

When a consumer buys a plane ticket through a private airline, they, unfortunately, do not have the luxury of also choosing to utilize a private security firm in the airport prior to boarding their aircraft.

As Mises presciently noted,“A government enterprise can never be commercialized.”

This is, of course, because since 2001 the TSA has had a monopoly over aviation security, prohibiting individuals from making the choice for themselves. However, every American is still forced to fund the TSA with their tax dollars.

Keep in mind, it doesn’t matter that an authority may claim to render necessary “services.” If the consumer doesn’t actually want these services, they cannot simply refuse the tax collector without consequences. Instead, refusing to pay for an unwanted service will result in an individual being thrown behind bars for tax evasion. What’s good about any of this?

Frankly, it makes me disgusted.

The Government Hates Competition

But don’t be fooled: State-run authorities don’t operate like a business.

Government entities are the polar opposite of entrepreneurial businesses.

As economist Ludwig von Mises presciently noted, “A government enterprise can never be ‘commercialized’ no matter how many external features of private enterprise are superimposed on it.”

What Mises is saying is that these organizations are not required to meet the difficult test of satisfying consumer demand in order to stay in business. Competition is prohibited. Consumers hold the power to make small companies big, and big companies small. In government organizations, there is no measuring rod for determining whether the consumer is satisfied.

In fact, government entities like the TSA are so bureaucratic by nature, even attempting to report negative feedback will result in hours spent on hold until eventually, a “customer” service representative will inevitably tell you that national security trumps any unpleasantries experienced. Nothing will improve or change because Americans are forced to fund government organizations, regardless of their ability to render adequate services. 

Again, the right to just walk away makes all the difference. Freedom is all about the right to say no. That’s what first made this country so great; consent of the governed was required.

And as for the aforementioned organizations, let me stress: the American people are not customers.

Government entities are the polar opposite of entrepreneurial businesses. There is no voluntary exchange between the entrepreneur and consumer. We have no choice but to do as the state says or else suffer the repercussions of disobedience.  

It is a great scam, no doubt, but don’t transmogrify me or other Americans into consumers here.

All this boils down to making a crucial distinction between a non-compulsory, civil society and coercion-based government.

We may have become so accustomed to the daily non-coercive, mutually-beneficial business relationship setting in interacting with businesses providing goods and services that we may, pell-mell, reflexively consider ourselves customers. And we may habitually become predisposed to viewing the concatenation of social interactions as mutually desired when they are not, blurring the important differentiation line between forced relationships and those that are voluntary.

So—as a customer—consider this my gratitude toward those who do not compel me to buy the goods and services they offer. These businesses are society’s real heroes, bearing risk and uncertainty and using self-interest in the service of the unmet needs of others.

  • Kent Lalley, together with family and career, is interested in gaining a better understanding of economics:  the philosophy of human life and action that concerns everybody and everything.