A senior colleague I respect (socialist), with a looooong curriculum in directive positions, asked to me a few days ago… “what´s your problem with public corporations?”, “don´t you think that the Estate should have economic activities and use it´s profits for the public wellbeing?”.
And I said, “no”. First of all, because if we (officials) were good businessmen, we would be businessmen, not bureaucrats. Second, because corporations do not thrive or collapse only (not even mainly) due to their managers´ quality. There are lots of factors, including pure luck, that determines the fate of a company. And when things go wrong, it closes.
While in the public sector, especially in Europe, when things go wrong, we raise taxes. And if we can´t do it anymore, and we finally get broken, it´s all the State the one that falls, not only the collection of stupid-empty-airports (And ski resorts, and circus, and theaters, and swimming pools, and railways, and…) that have generated astronomically absurd losses.
The public sector must be small because we, the managers, can´t cope with more. Specially, the politicians can´t cope with the failures in risk-taking. Nazis tried to solve it killing the managers that missed the targets, but it was not precisely a story of success, wasn´t it? And we can´t be harsher than the Nazis, or the (early) soviets, can we? Because the ones we ought to kill at the end would be, precisely, the ones that give orders.
And that would -still- not solve the problem that taking risks and failing goes hand to hand.