I hope we shall crush in its birth the aristocracy of our monied corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country. — Thomas Jefferson
Sorry, Tommy. We let you down.
It happens every election cycle. The "captains of industry"—CEOs, investment bankers, and wheeler-dealers of all stripes—swagger forth to save the nation. They make the deep personal sacrifice of subjecting themselves to conversations with people they can't fire out of nothing more than their deep love for country and their utter conviction that they should run it.
Some come forth with clipboards full of pie charts, talking about "getting under the hood" of the government. Some rally the troops with tales of how they trimmed the fat from bloated corporations. Some raise cheers with nothing more than a promise that they have the Secret Knowledge for effective arm-twisting at the negotiation table.
All of it is bullshit.
Actually, it's worse than bullshit. It's all based on the recurrent theme that "government should be run more like a business," and that theme is both dangerous and completely counter to the whole idea of democracy. Government and business are not the same thing. In fact, there are good reasons why, in a democracy at least, any effort to run the government like a business should be seen as a hostile act. These people need to keep their stinking business out of our government, and I'll tell you why...
The purpose of a business is to concentrate wealth. This is true of General Motors and it's equally true of little Sally's lemonade stand. The business collects value from its customers, and returns to them a service that costs less than the value it collected. It had better. Otherwise, it's not a business for long. We call that gathered wealth "profit," and it moves from control of the customers into control of the business. We may not often think of it that way, but that's what it is: A wealth concentration engine.
To maximize that wealth concentration power, the business attempts to deliver the minimum amount of service while expending the least amount of effort. They want to deliver less, and they want to do it for more. That's not evil. It's just business. Sure, a business may drop prices or increase quality, but they do so only when forced to by competition. Whenever possible, the goal of these non-optimal changes is simple: Remove competition. That way the business can go back to charging the maximum amount for minimum product.
Decisions for how all this happens are restricted to a very small group. In most cases, everyone in that group has a direct incentive to maximize the profit. This is closely related to how profit is distributed in the business, which is anything but evenly. In most cases it follows a steeply angled slope where vastly greater rewards are given to a few, while most involved in the business are treated as part of the cost—the things you want to minimize, avoid, eliminate.
Put it all together and a business is meant to extract the greatest possible funds, deliver the least possible service, and put the resulting wealth in the hands of the smallest number of people. I'd suggest that's few people's idea of an ideal government.
Oh, and business is meant to grow, right? No one is out there giving lectures on "shrinking your business" or "making Exxon small enough to drown in a bathtub." Your wealth-grabbing, service-minimizing, CEO-enriching government will definitely want to grow, and grow, and grow, all the while getting better at giving employees less of the wealth they help generate. We even have a nice, official term for it. It's called productivity.
An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in revenues and other GDP components such as business inventories.
When people tell you that "productivity is up," that's a good thing, right? Hell, productivity is up 80 percent since the 1980s. That's amazing! We must be doing gr-r-r-r-r eat! Only… what does it mean?
It means that since the 1980s, we've gotten, much, much, much better at funneling wealth away from the many and toward the few. Sixty percent of the wealth generated in that period went to the top 1 percent. Sound bad? Hey, nearly 40 percent went to the top 0.1 percent.
Businesses have never done better than they are doing right now. Never had such high profits. Never enjoyed such low costs. Productivity from the perspective of the business: Making more, while paying less. Productivity from the perspective of the worker: Doing more, while making less.
Not what you wanted?
Well, those who still want to run government like a business would surely be thrilled at the idea of giving the president a pay raise of 16 percent a year—the average increase for Fortune 500 CEOs last year. In fact, CEO pay has risen 937 percent since the business-friendly 1980s, while presidential pay hasn't even kept up with inflation. Come to think of it, when you compare average CEO pay to company revenues, it looks like President Obama should have pocketed about $124 billion last year. I think everyone can get behind that aspect of "running it like a business." Right?
But then, the president would deserve that money, because unlike an actual president, as government CEO he'd have enormous freedom to ignore what anyone else said and run the nation as he wanted. Sell the Grand Canyon! Swap North Dakota for North Sudan! Fire the Congress! Yes, Mr. President.
I suppose that people could mean "run the government like a business" in terms of keeping the books tidily balanced. Only, of course, they don't. Check out Amazon. Or Twitter. Or... well, just about any of them. Check out all those investment banks that invented more theoretical money than the GDP of the entire world, and then lost it.
Fifty percent of businesses go down within a five-year period. Maximizing that profit and minimizing costs means designing a machine that’s optimized to funnel money quickly, but not necessarily built to last. However, many of those do manage to reward their CEO while he's trekking over to his next failed business.
So, if you want a government that takes as much of your money as it can, delivers as little as possible, gives what it takes to a handful of the powerful, and is intrinsically unstable ... Sure. Run it like a business.
And actually, there have been governments run this way. Plenty of them. There's even a word for it. Starts with an 'F.' Just Google Mussolini, Benito. You can take it from there. Though, speaking of Mr. M, a lot of this "run it like a business" stuff seems to grow out of a longing for having one tough-talking leader at the helm. Maybe you should add Mugabe, Robert and Franco, Francisco and Dada, Idi Amin to that search. Like I say, this kind of government isn't exactly a new idea.
On the other hand, if you'd rather have a government that's interested in providing the best service to the greatest number of people, in rewarding everyone fairly, in protecting the weak from the powerful, then you have another choice. You need to run it like a government. That's the only way you can, hmmm, what's that phrase?
Establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our posterity.
That stuff. There's no profit in that stuff. That's why it's nobody's business ... but should be everybody's government.