Government Is Not A Business

Can we please, pretty please, retire that tired old canard that “government needs to be run like a business”? I absolutely despise that little piece of conventional wisdom which politicians repeat each election. It’s bullshit.

Government cannot run like a business because it’s a completely different entity.

As the Los Angeles Times’ Michael Hiltzik writes today:

It would be obvious to any business person who had spent a day in public administration that government and business are antithetical. That’s not a flaw in the system. Government exists to take on precisely those tasks the private sector can’t or won’t do.

These include caring for the penniless; maintaining common amenities such as parks, schools, and universities; and creating infrastructure with broad value but unspecific beneficiaries, such as freeways and the Internet (which in coming days undoubtedly will be used by many readers to inform me by e-mail that they don’t see how government serves any purpose).

Most of these functions can’t be made to “pay” in the sense that a business strategy does. But they can be neglected or privatized only at great cost to society.

Thank you! Jeeebus, nothing annoys me more than hearing how government needs to be run like a business. No, it doesn’t! It can’t! I remember working for a Big Government Agency tasked with operating a National Recreation Area and being told we had to apply for-profit business practices to what we did. I’m sorry, but just how is that supposed to work? How do you make money break even off of maintaining hiking and mountain biking trails, campgrounds, and wildlife habitat? Especially when you have small businesses in the local town complaining about unfair competition from said Big Government Agency? If we operated like a business, then what would be left for the real businesses to do? It was laughable idea. We ended up having to explain that no amount of T-shirt and baseball cap sales and hunting permits would ever make us turn a profit break even. [Note: I hit send too soon on this one, but of course all government is not-for-profit — another reason why it can’t operate as a business. We weren’t tasked with making a profit but they did want us to try to break even and they gave us a few years to do it which was just stupid.]

Government and business are separate entities. We need both to function as a democracy. Trying to turn one into the other is what has led to disasters like Soviet-style Communism and Mussolini-style fascism.

Another problem, which I’ve discussed elsewhere, is that we do not — can not — put a monetary value on things that are quite literally priceless. Things like watershed, clean air, clean water or the soil erosion protection which forests provide. As I wrote last spring:

But it’s bigger than that. We also don’t factor in the value of what we’ve lost when we destroy those mountains and streams. We don’t consider that a forest isn’t just a piece of land or something pretty to look at or even the economic value of its timber. It’s a living system and it performs a function. Forests and streams provide water storage, flood management, even reduce the severity of floods. Trees take the Co2 and pollutants out of the atmosphere and replace it with oxygen, earth’s natural breathing mechanism provided to us, free of charge.

And here’s the thing: we haven’t invented a substitute for these natural living systems! When they’re gone, we’re all screwed. We have no air-scrubbers, no one has created the photosynthesis machine. The reason we can’t put a value on this is because it is truly priceless. Once it’s gone, it’s gone.

I was writing about the environment but there are a whole bunch of non-easily quantifiable things. The education of your work force. The health of the population. The knowledge and experience of our senior citizens. Anyone who wants to be governor and tells you they plan to operate the state like a business is obviously not factoring in a whole bunch of things for which we cannot attach a dollar value because they are literally priceless.

And it’s hard for me to take these business sector politicians seriously. So many of them have little respect for what government does anyway — many of them don’t even vote. As Hiltzik wrote:

Engagement in democracy starts with participation in the ballot box. That’s the real significance of Whitman’s and Fiorina’s well-documented failures to vote over the years. This isn’t a “mistake,” as Whitman likes to call it. A mistake is getting the address of the polling place wrong, once. Not bothering to vote year after year? That’s contempt for the very concept of democracy.

I couldn’t agree more. Electing to office someone who not only holds the very concept of democracy in contempt but also misunderstands the function and role of government is the worst sort of mistake.


Filed under California politics, corporations, politics

16 responses to “Government Is Not A Business

  1. >Brava!I was just thinking about your main point of government, vis-a-vis bidness.I didn't flesh it out, or go into such great detail. And now, I don't have to!What always struck me about the Cheney administration was that they were so horrible at governance because they had such contempt for government.Thanx, but WASF!JzB

  2. >Plus, government is the only institution that can provide the countervailing power to stop big businesses from dominating the economy. Big businesses know this and so they do everything they can to proliferate the free market narrative that government should get out of the way of business.In some ways government SHOULD get out of the way of business, but in the big picture, a strong federal government is essential to provide things like anti-trust and environmental protection. In fact, a strong central federal government is clearly intended by the constitution.Right wing populism has up-ended this truth.

  3. >Couldn't agree more. Let me add 2 more observations:1) Anyone who has been inside a large American corporation very long can tell you that efficiency, quality and integrity are only found in the mission statement ginned up by the PR firm.2) Can you imagine any business that would hire as its CEO someone who did not believe in the concept of private enterprise?

  4. >With CEOs running for Senate and gubenatorial seats everywhere, we can look forward to all those ways they make a balance sheet balance.Well, except for ginned-up accounting tricks which explode 5 years later. And lobbying for subsidies. And bribing for tax & policy changes. And sloughing off the unwanted (i.e. poor, rural, urban and demographically undesirable) clientele.

  5. tom

    >Companies which allow their workers to do their jobs in hazardous conditions, Oil Refineries, Mines etc which continue to willfully ignore health and safety strictures so their bottom line is jucier, the most recent example is of course BP, or look at Texas which has voluntary pollution controls on it's polluting refineries….They don't care they don't have to

  6. >You're right, it's not a business. No private business could survive if it tried to run the way government does.

  7. >No private business could survive if it tried to run the way government does.*yawn*Because CEOs believe in the principle of business, while there's scant evidence that Republicans and Blue Dogs believe in the principle of governance.Of course, they believe in those big cardoboard checks, brought to you by government, and ribbon-cutting ceremonies in front of TV cameras. And Tea Baggers believe in getting Social Security and Medicare.But they take strong, principled, manly stands against the idea, which is what counts.

  8. >Healthcare should NEVER have been made entirely for profit.

  9. >If you're lookin' for a better set of wheels;I will stand upon my head to beat all deals!I will stand upon my head, 'til my ears is turnin' red;Go see Cal, go see cal, go see cal!

  10. >"No private business could survive if it tried to run the way government does.November 1, 2010 11:59 AM"You did see the title of the post, yes?Not to balloon your prick, but if it wasn't for the government NOT operating like a business GM would be out of business and much of Wall Street (and the world financial community) would be in a far worse state than they are.Thanks for playing, next time do some homework before you take the final.

  11. >No private business could survive if it tried to run the way government does.*yawn*Yawn what? Do you dispute my statement? Do you have some evidence that it is incorrect?It's simple truth. In a market based economy no private business could survive and prosper if run the way the Federal government is.

  12. >No private business could survive if it tried to run the way government does.Is feature not bug

  13. >You have somewhat of a point, but you are also missing the point. Your defense is more of an excuse than a good argument. True, public administration is not like a business. It is, however, a form of a business. Whenever there is a transaction of money there is business being done. After all, these enterprises are not operating off good will. They function from money – public money. What? Are you saying, let's milk this puppy dry because there's no other option but to be everything to everyone? According to your perspective, public administration will never become more efficient, because there is not realistic alternative. And normally the "government should run more like a business" statement is coming from (1) a bureaucrat with an angle, (2) a politician with an agenda, (3) a pseudo-private sector professional with public sector ambitions, or (4) a citizen without a clue. The argument is still valid, but it's never placed in the right context to make it work. My point is that you have no point at all. This nation is falling apart not because government is failing, or that the private sector is failing. This nation is failing apart because of our failing ways. In every way, we miss the comprehensive point. You've clearly illustrated that for the public administration side.

  14. >KLCS:To whose comment are you replying?Government is not a business in the sense that a bakery, a widget maker or a drug company is a business. Government is NOT out to make a profit or keep from having a loss. It has not stockholders. It has no "Board of Directors" who profit by its cost cutting or juggling the books.We could certainly save some money by doing away with wasteful government programs; defense spending and the war on drugs jump right out of the mix.

  15. >Thanks for pointing out Fiorina and Whitman's contempt for the democratic process. We see today how little love the California electorate had for them. For once, I made an accurate prediction. ("They're going to lose because male republicans don't support them," on this very forum.) It's a small comfort to the rest of the nation. Rand Paul? what a dick! Democrats swept all eight top offices in CA. We also passed prop 25 (simple majority to pass a budget,) which may restore some sanity to the budgeting process, especially with pop icon Jerry Brown back at the helm. Hey, I just thought of something. Businesses can make decisions with 50% + 1 of the shareholders. So there you go.