The Ten Word Answer: The Government Should Be Run More Like a Business

It’s a common meme among conservatives.  We’ve all heard it.  “If I were running the government, I’d run it more like a business. “  What invariably follows is a discourse, intelligent or not, on how government must live within it’s means and close budget gaps by cutting spending on all the programs that the person speaking has deemed wasteful.

Now, should government be wasting money?  Of course it shouldn’t.  As a liberal, I’m a target for the “big government” label.  My answer to that is that I want a government that is big enough to do what it needs to do. I don’t want it bigger.  I don’t want it smaller.  Guess what.  That’s exactly the size of government that every American, arguably every citizen of a democracy, wants.

But how can that be?  If we all want government of the same size, why does the political dialog in our country look increasingly like an Ultimate Fighting Championship match?  Of course, you’re astute readers filled with “Great” Thoughts so you already know the answer.  I didn’t say that we all want government of the same size.  I said that we all want a government that is the right size to do what we want it to do.   And that’s the rub.  We all want the government to do different things.  For example, here’s what I think government should do:

1)      Provide for reasonable national security (including overseas interests)

2)      Provide for the commons: education, public health and safety, transportation, etc.

3)      Provide for a level playing field for people and businesses through reasonable laws and regulations.

4)      Provide for a social safety net.

I don’t claim that this is an exhaustive list, and all four categories are subject to further definition.  For example, my idea of public health as part of the commons would include a single-payer healthcare system.

I also have ideas about what government really shouldn’t do:

1)      Get involved in religious controversies.

2)      Regulate private activities that do not violate another’s rights.

3)      Base laws on belief rather than empirical science.

Again, this list is not exhaustive and each item is subject to interpretation.

Unless the person speaking is a really hard-core libertarian, he or she does not want to do away with the government.  They just don’t want to pay for the government to act in ways with which they disagree.

Fair enough, but the notion that running the government like a business would solve all of our economic woes is a false argument for one simple reason.

Government is not a business.

The purpose of a business is to make money for the owner.  If you don’t believe me, check out mission statements of the companies that make up the Fortune 500.  Many, not all, but many have phrases like “build shareholder value”, “return on investment”, or simply “profit”.  Assuming the business is a for-profit business, its mission; its purpose is to make money.  It might make that money by selling burgers or coffee or books.  It might provide services for a fee.  It might do so in a green, pro-worker, socially conscious way, but these are all means to an end, and that end is monetary profit for the owner(s).  There is absolutely nothing wrong with that.  If I ever own my own business, that will be my goal as well.  When I go to work for my employer every day, I am doing that to make money to support myself and my family.  There are decisions and value judgments that go into how that money is made, but money is the goal of a business enterprise.

So what about government?  Well, here is the Preamble to The Constitution of the United States.

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence,  promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Now, a lot of this text is subject to interpretation, but what you will not find in the Preamble, or in the text of The Constitution itself, is any indication that the government of the United States is to be a profit-making enterprise.  There are provisions to provide for regulations to facilitate commercial activity in the private sector, but nothing about the government turning a profit.

So the  purposes of a private business and the government are fundamentally different, but that’s not the only difference.  A business can choose as large or as small a market it wants.  If you want to make such a high quality product that only the wealthy can afford it, that’s your price to set.  If it works in the market, you’re all set.  If it’s too high, you can choose to lower the price or exit the market by not selling.

Government can’t do that. Government is supposed to be there for all the people.  It’s very existence is a matter of law, so anyone that is subject to its jurisdiction is in need of equal protection under that law.  Where a private business can choose to ignore, or even offend a certain segment of the market, the government is not allowed to do so, even at the cost of some inefficiency.

But there’s one other element of the idea of running government like a business that really needs answering.  The fact is that this idea is typically expressed to bolster an anti-tax argument, which is quite laughable.  You see, governments have budgets.  So do businesses.  In both cases, the budget is an expression of the values of those who write the budget.  That expression of values is reflected as the budget writers answer two questions.  Where are we getting our money?  How will we spend that money?

The person who wants to run government like a business only seeks to address the second question. In other words, a budget has two levers: revenue and expense.  To attempt to balance a budget with only the expense column is something a business person would never do.  A business leader facing a budget crisis that refuses to even consider increasing revenue would be laughed out of the boardroom.

Does this mean we have to tax everything?  No, not anymore than it means we should slash our spending to the bone. It just means that when you hear someone talking about running government like a business, you might just ask yourself if a business would prosper if it were run in that matter.  Think about it.



About Andrew

I'm a Christian, American, liberal, geeky, thoughtful, Northwest-transplanted Angeleno husband, father, and pundit who writes about anything he can think of.
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4 Responses to The Ten Word Answer: The Government Should Be Run More Like a Business

  1. William Mitchell says:

    In light of your comment and this article I thought you might find this video interesting. It’s two former secretaries of treasury talking about stimulus and tax reform on GPS.

  2. Andrew says:

    Definitely interesting perspectives. I have a lot of respect for O’Neill for being willing to part ways with the Bush Administration. I’m not sure I’m with him on a VAT just yet. I think Rubin is right about reinstated the estate tax and restoring the top two marginal brackets.
    The real interesting thing I heard was O’Neill talking about businesses not hiring because they already have excess capacity. I’ve been thinking about something similar. If people really get serious about their personal finances and not living on credit, what would that look like for our economy? In other words, is the economy that we know so dependent on the use of consumer credit that it is actually harmed if people live within their means?

  3. Pingback: Hail to “The Donald” — Not! « "Great" Thoughts

  4. Pingback: It’s the Economy…yeah, you know the rest of that line. « "Great" Thoughts

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