Resources are wasted. What resources there are, are often allocated to the military or to friends of the government. Because the government owns property, it is not taken care of, land and structures are abused and the environment suffers. Capitalism often goes hand in had with political freedom. The poor are wealthier in capitalist countries than in socialist countries.
Incentives matter .
It involves contracting out city services to the company that offers the best services for the lowest price. In cities where competitive bidding has been used, often city employees bid on the contract and win. Los Angeles Mayor Richard Riordan tried to contract out garbage collection when he first came into office eight years ago. The rules of the game affect people s choices . This social experiment failed.