Run government like a business? An impossible, foolish notion

Carly Fiorina, the one-time CEO of Hewlett-Packard, threw her hat in the ring last week to become the GOP 2016 nominee for president. Like many business types before her, she pledged that, if elected, she would “run government like a business.” That’s an impossible goal, and one that shouldn’t be pursued.

Most politicians, when they say this, mean they see inefficiency, waste and fraud in government that can be eliminated. I have no quarrel with this line of thinking, and reducing or eliminating these things is a worthy objective.

Quickly, however, it becomes obvious that one person’s waste is another person’s valuable program. Personally, I believe national defense is a primary purpose of government, but I also believe there is a great deal of waste in our defense programs. I have no doubt that there are military bases both domestically and internationally that could be closed without compromising our national security. Target a specific base for closing, however, and there will be an uproar about job losses and the loss of business generated locally by the base. Closure becomes, not impossible, but difficult.

In a business, a board and a CEO would simply say, “Too bad, so sad,” close the base and move on. In government, constituencies have a voice and a right to exercise it. It’s not as easy as snapping your fingers and willing something to be so. Nor should it be.

A business is set up specifically to make a profit by offering goods and services that people can choose to buy or ignore. CEOs and boards are judged by how well they pursue a profit and by how much they maximize shareholder value. Progressive companies also care about the effects they have on other stakeholders, such as communities and employees. They also care about how their operations affect the environment. Their binding obligation on those fronts, however, is only to meet their legal and regulatory requirements.

Our government, by contrast, is set up specifically to provide goods and services that don’t, and shouldn’t, generate a profit, such as building roads, maintaining bridges, running prisons and making sure the poorest among us don’t slip through the cracks. You might disagree with my list (and you might add healthcare), and that’s okay. These are, however, things that someone has to take care of, and we as a society have to figure out how we’re going to do so. Often, the move to privatize these services creates a whole new set of problems.

There’s another essential difference between government and business. In business, everyone from the board to the CEO to employees is working for shareholders. There’s a straight line from the shareholder on down. Board members can be voted out of office, CEOs and employees can be fired, and it can all happen quickly if need be.

By contrast, we’ve set up our government expressly so that each of the three branches acts as a check and balance on the other branches. Not everyone works in lockstep all the time, nor should we want them to. In business, ideally, every part of an organization works together. In government, that can degenerate into tyranny if we’re not careful, and I don’t want a president who can unilaterally dictate what’s going to happen and how things are going to be. Those who say they’re going to run government like a business, I think, believe they will and should have such power.

Also, government isn’t set up to respond only to the needs of voters. Not all citizens are voters, yet they still have rights and interests that need protection. Before you think that “he who does not vote should not be represented,” remember that children can’t vote, and those who are incapacitated often can’t exercise their voting privileges. Still, they have rights and needs that a society must protect, without regard to how much power they wield and how much of a profit can be coaxed out of them.

One last problem with running government “as a business.” Increasingly, people aren’t willing to pay for all they expect from government. We have to have an intelligent conversation about what we want from government, and we have to figure out how we will pay for it and who will pay how much. That might result in higher taxes for many people, yet that whole idea seems to have been taken off the table. In addition to reducing or eliminating waste, we need either to cut back what we want from government or pay more for what we expect.

We’ve set up our government as a system of checks and balances that, ideally, carries out the will of the people. That’s not how business works, and that’s why government cannot be run like a business.

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1 Response to Run government like a business? An impossible, foolish notion

  1. We know all too well though that our current government does answer to its “shareholders” and making a “profit” or at least making it so that they are more likely to see higher profits makes it difficult for our government to insure that the rest of the population has their needs met as well.

    The way things are going, we’ll see everything privatized soon. Perhaps even government itself!

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