Liam Halligan at Unherd has an answer but he should marshall his facts differently. Liam is writing about the bankruptcy of Carillon, an UK construction firm that had hundreds of contracts with the government. Liam says:
It’s a story about whether the British public can have faith in private firms delivering public services, and about jaw-dropping failures at the heart of our business and political establishments. Above all, it’s a story about how UK capitalism works – and fails to work.
Yet capitalism double works. First, as discussed below, there was early information about Carillon’s problems. Second, Carillon and everyone in and related to it was punished as, according to CNN, it is going into liquidation. Of course, the thing about capitalism is that it punishes without pity. Carillon’s school lunch program might have been fine but Carillon is being liquidated. KPMG, Carillon’s auditor, faces scrutiny as the Telegraph puts it. KPMG’s position is not as dire as Arthur Andersen’s (AA) at Enron but the comparison not far off.
Sidebar: Here is an interesting nugget on AA in Wikipedia:
In 2005, the Supreme Court of the United States unanimously reversed Arthur Andersen’s conviction due to serious errors in the trial judge’s instructions to the jury that convicted the firm.
That’s right, the Supreme Court overturned AA’s conviction. That is not to say that AA was innocent but rather they were wrongly convicted. End Sidebar
It is certain that KPMG will lose business based on the scandal. It is close to certain that they will lose a large pile of money to stockholders and others.
What is equally close to certainty is that the governmental folks that made bad decisions will be treated with much more pity. To be fair, the decisions about Carillon might only be bad after the fact. As an example of punishing government wrong-doers take the IRS scandal in the US where the decisions were clearly wrong at the time although some folks, we will not cite them, still say it is not a scandal.
One challenge for the government decision makers was what to do after the first news that Carillon was having trouble. Here is CNN:
Lidington told the BBC on Monday that the government has been working on contingency plans since 2017 in preparation for a potential collapse.
He said that new government contracts awarded to Carillion were structured as joint ventures to ensure that that other partners would be able to step in to complete the necessary work.
But critics are unhappy that the government kept awarding contracts as the company floundered.
First, it reminds us that the system was producing useful information before Carillon was beyond hope. Second, it is a classic trap for the decision maker. If the government don’t give Carillon more business they fail and the government gets the blame for their collapse. If the government does give them more business then they might end up in the current situation.
Carillon shows us why capitalism works and reminds us of the problems with government. Profit is single minded. The government is not. We don’t want to change the former and can’t change the latter.