So it looks like we will get to see who wins out of the Godzilla Government v King Kong Elon Musk battle now that the US election has delivered Trump back to the White House.  I argued that this will be worth electing Trump alone.  Musk is confident of being able to strip out $2 trillion worth of costs from government and it will be key to see how he goes about it.  The government is essentially a service industry which differs from Musk’s traditional manufacturing background so whereas his approach to cost cutting has been to trim back to that which is physically minimal to produce a car or a rocket, he will need to explore that which is organisationally minimal to achieve a government objective.  The Department of Government Expenditures (DOGE) may question the need for a particular government function, but it will just need to accept the presence of a policy that Congress installs.  The main role of DOGE is to judge whether the policy is being implemented efficiently.

One can imagine all sorts of approaches to making government more efficient, not the least by using technology to solve coordination problems.  The ability for one government department to share information with another government department is almost non-existent in most countries and moving toward an open system could both make an individual’s interaction with the government faster and cleaner, as well as defray duplication and outright fraud.  Cutting costs does not just mean cutting people.  Providing the means to access government services quickly and efficiently is a quantifiable benefit.

Understanding the budgeting process is another focus for attention.  The private sector, as Elon Musk well knows, has to pitch its ideas to the capital markets to gain funding.  Government has a non-market based approach to raising capital.  Is there a way to make the business of government more attuned to the oversight function of the capital markets?  The US Treasury has a monopoly on raising capital for the government but there may be opportunities for ‘start-up’ programs to seek funding independently of the general appropriation framework.  This would effectively allow the government to partner with the private sector to deliver a valuable service and each to share in the equity thereof.  The National Science Foundation funds tons of research, much of which goes unnoticed.  Motivating the administrators to seize upon and commercialise ideas can both manage costs and generate profit.

It feels like Musk has been given Vivek Ramaswamy to colead the DOGE in order to reign Musk in and soften the message he may choose to deliver.  But it is naive to think that DOGE is just about firing people and shuttering failed departments.  There will and should be some of that, but the lasting contribution will be making a monolith more like a collection of microeconomic actors that fit together.