The key is to figure out how to produce it for $5 and sell it for $8. Not only have you given the customer a 28% savings, you've also tripled your own profit. Now both sides of the equation are richer for it.
That quoted tweet, by the way, is the start of a very good thread.
Once the government gets involved, you get at least one of three things added to the equation: 1. less profits and savings because of taxes, 2. restrictions and less profits because of regulations, and/or 3. an added layer of bureaucracy because of nationalization.
None of those things are great for either customer or seller, but let's break it down. 1. Taxes. Taxes on a sale literally take money from that transaction either by taking it from the seller, or taking it from the customer if the seller adjusts his price. Or a little from both.
2. Regulations. Some are necessary to curb malicious/negligent sellers/manufacturers. Many are not. The more regulations imposed, the easier it is for large corporations to comply as compared to small business. So strict regulations literally inhibit or kill off small business.
To expound on that, it's easier for large corporations to comply because they have the money. They can buy new equipment, overhaul production methods, invest in alternative ways of doing business. And they can just pay the fines if they refuse to comply. Mom n' Pop often cannot.
Which brings us to 3., Nationalization. When the government steps in and takes control over certain aspects or all of a business, the bureaucracy needed is ten-fold that of an ordinary business. And they hemorrhage money doing it because they don't operate on a for-profit basis.
The VA, for example is requesting a total of $220.2 billion for fiscal year 2020 to care for roughly 6 million of the 20 million or so United States veterans. It's "free" healthcare only for those with very low incomes. Above certain income tiers it costs. That's not efficient.
And take the Post Office. The USPS bleeds billions every year that the federal government must make up for. They've defaulted on $34 billion in required payments on their Retiree Health Benefits Fund since 2012. All to do what UPS and FedEx do for competitive prices.
The government does not operate on a for-profit basis. They have no profit margins to worry about. Instead of answering to stockholders regarding money earned, budgeted, and spent, they simply take out any losses in taxes from taxpayers. And that creates a lack of accountability.
The government has accountability to its citizens, sure, in the form of ensuring fraud/corruption don't exist (ha ha!), but there's no monetary accountability. No bottom line to explain. No, W, X, and Y are the federal budgetary costs, and so we must bring in Z amount in taxes.
But if Z doesn't cover W, X, and Y, then hey, it's a deficit. In business, this is reflected back to the company and they adjust or someone else takes their business. With the government, it just piles up with no accountability other than the need to raise taxes to cover it.
The government's way of doing business simply creates debt out of that imbalance of operating costs/funds. And it just piles up. The national debt now stands at $26,466,893,000,000, and growing at a rate of $45.486 a second.
And their only solution is to take in taxes. All because of inefficiency and a failure to operate as as for-profit. And the more business that is nationalized, the worse this problem becomes, until you end up with financial collapse, hyperinflation, and economic disaster.
