Why are private firms more effective than the federal government at combating cyber-crime?
The question is not if police can take down a malicious individual, but why should they do it? Private organizations receive payment upon successful removal of a malicious entity for a client, as well as good reputation (indirect benefit) if done properly and efficiently. Police on the other hand, do not get paid per industry they take down and any reputation and fame will not change, including the size of their paychecks. They maintain a steady salary deployed by the federal government, not by consumers. Government forces are more than capable of dishing out justice and bringing criminals down when seen fit, especially when criminals are foolish enough to deface government owned websites. This provides an incentive to government agencies to track and remove these malicious entities.
This brings up the topic as what is efficient? When looking at this question from an economist’s view, one might say being Pareto optimal is the most efficient business structure. Pareto optimal is when a society, group, corporation, etc. allocate resources in such a way that any change/improvement of one section would lead to harm towards another entity. However, communism and monarchical governments are considered Pareto efficient as well. With communism evenly allocating assets to all the population equal, and giving a certain person any more would only put those around them in a worse position. While a monarchy has royalty obtaining all the power and assets, and removing any from them to give to the ‘lesser’ peoples would put the royalty worse off.