slatten49 Loc: Lake Whitney, Texas

Forbes Magazine, Oct 5, 2012 https://www.forbes.com/sites/johntharvey/2012/10/05/government-vs-business/#291ded2a2a54

John T. Harvey , Contributor; Opinions expressed by Forbes Contributors are their own.

The idea that government should be run like a business is a popular one with both Republicans and, albeit to a lesser extent, Democrats. But this betrays a basic misunderstanding of the roles of the private and public sector. We should no more want the government to be run like a business than a business to be run like the government.

Those popularizing this notion feel this way because they see business as more efficient. This must be the case, so the logic goes, or the entity in question would lose market share and go bankrupt. Only the fit survive. Meanwhile, government agencies face no backlash. This is why we have long lines to get driver’s licenses, poorly maintained VA hospitals, inferior returns on investment from Social Security, etc., etc. Were there a choice on where to be licensed to drive, then such offices would forced to make the customer’s experience a positive one or they would go elsewhere.

There are, of course, many businesses that also make the customer’s life very unpleasant because simply being in the private sector does not guarantee effective competition. The American Medical Association has, for example, argued for years that very few people actually have much choice when it comes to health care. It is a very concentrated industry, meaning that they can demand payment while giving only a vague idea of coverage (which may well change over time and with little to no notice) and they can delay reimbursement. And there are government agencies, like police and fire departments, where their dedication to duty has nothing to do with profit. They put their lives on the line every day because they think it’s the right thing to do.

But while we might all grant that there are exceptions, the general question still stands: does it make sense to run government like a business? The short answer is no. Bear in mind, first, that “efficiency” in the private sector means profit. Hence, to ask that the government be run like a business is tantamount to asking that the government turn a profit. The problem in a nutshell, is that not everything that is profitable is of social value and not everything of social value is profitable. Reality TV, pornography, fashion, sports, and gambling are all of questionable social value, but each is quite profitable and exists in the private sector. Meanwhile, few would argue that the Army, Navy, Air Force, Marine Corps, Coast Guard, police department, fire department, libraries, parks, and public schools are of no social value, and yet they could not exist if they were required to be profitable. Imagine maintaining a standing military by selling subscriptions door-to-door: “Hello, my name is Captain Johnson, and I represent the US Army. Are you afraid of foreigners? Would you like guaranteed protection against invasion, pillaging, enslavement, and more? Please see our brochure for our three levels of service.” There would, of course, be a few subscribers, but nothing approaching the level necessary to truly protect the United States from attack.

To reiterate, the key issue is this: not everything that is profitable is of social value and not everything of social value is profitable. The proper role of government is the latter. Those arguing for a business model for government must necessarily be ready to shut down all government functions that do not earn a profit, regardless of their contribution to our well being. And, if the public sector is being run properly, that should mean every single one. If it’s profitable, they shouldn’t have been doing it in the first place. There is no need for the government to start a chain of hamburger stands, hardware stores, or coffee shops. Rather, they run child protective services, the National Park Service, and the Air Force. Profit is the realm of business, while unprofitable but socially useful tasks is the responsibility of government.

This is not to say that every government agency is actually performing a useful public service or that it is not wasting resources (by whatever standard). Nor am I arguing that there are not many private sector activities that add greatly to our well being. The point, however, is that saying that government is inefficient because it does not turn a profit is the equivalent of saying that Peyton Manning is a poor quarterback because he doesn’t hit enough home runs. He’s not supposed to.

jack sequim wa Loc: Blanchard, Idaho

The word budget comes to mind. A business owner (small/medium size) operating on a 20-30% profit margin if he wants to stay in business, must manage inventory levels, scheduling employees to meet traffic patterns, product consistency, advertising, training, and a host of other balancing acts. Should the business owner run only a small 2-3% over in each area he closes the doors to the next business owner that can work within narrow margins.
In every aspect of government entities, take the VA for example, or even the EPA, with those managing from the top down ill fit to run a Mc Donald's. The VA unable to provide a service regardless how many budget increases they continued receiving as the answer to fix their incompetence. Yet a similar business model a privately owned hospital has far superior service on a fraction of the operating budget.
The EPA, every State, city, and most towns have regulations or requirements for (example) pulp mills to expel pollution within guidelines. Port Townsend a small 11,000 population town in Washington State every couple years would raise the bar on their pulp mill clean air and water requirements. The mill actually has water going out that has been cleaned and better than the water coming in. Yet the Federal EPA has to get their piece of the pie with less required purity still spends money to monitor the mill and issue license to operate. This model of the EPA duplicating what States and Cities across America are already doing. Another example would be the EPA overreach regulations that they themselves write (as laws) outside of their scope of legalities, outside of Congress, costing hundreds of millions to manage and when the EPA needs to expand their departments to keep up the ability to manage regulations they simply request more budget funds.

I believe most every department within the governments control can be operated as a business model and with duplication removed or closed down could save tax payers trillions if 10-15 year periods.

acknowledgeurma

I googled, why is VA so bad, and got:
https://www.reddit.com/r/self/comments/3lfouy/im_tired_of_hearing_why_people_hate_the_va_here/
Some of the problems with the VA, may be due to unfunded mandates from Congress.

Also, googling, what is wrong with EPA, I got:
https://www.reddit.com/r/AskTrumpSupporters/comments/5h2quu/what_is_wrong_with_the_epa_do_you_support/#bottom-comments

Perhaps we should just have Washington state and it's environmental regulations replace the EPA.

PoppaGringo Loc: Muslim City, Mexifornia, B.R.

lpnmajor Loc: Arkansas

I suppose government might work better run as a business, a publicly traded business..............with 320,000,000 share holders. The problem is, very few successful businesses let their employees set their own hours, pay, vacation days, benefits, and handle discipline, as well as operate without a board of directors.

If Government followed even a lax business model.....................DoD would have completed at least one audit.

slatten49 Loc: Lake Whitney, Texas

Sorry the following is so long, but it explains much of the disparity in running government as opposed to running a business.

Ben Gran, from Paste Magazine, June 2016

Government and business have different missions and serve different purposes. Businesses exist to make a profit, to serve their customers, and to pursue a particular vision for a certain market. Government has a broader purpose: to uphold the general welfare and provide stability and security; to serve the common good; to help improve the education and well being of the people, and otherwise do all that verbose stuff that is written in the U.S. Constitution.

The mission of government is more complex than the mission of a business. In fact, the government’s mission is itself a constant source of contention, with different political parties and factions within the government having different ideas and agendas about what government is for, what it should do, and what are the limits of government power. Running a business can be incredibly complex and stressful, too, of course – but the complexities of a business are more narrowly focused than the complexities of government. Even the biggest, most complex businesses are simpler than the U.S. government. Business is like playing checkers; politics is like playing 3D Chinese checkers—but with the Supreme Court stepping in and changing the rules halfway through the game.

The problems that elected officials have to deal with are more intractable and complex than anything that any CEO has to face. Yes, businesses have big problems: they constantly have to innovate and adapt to competition and guard against threats to their business; they have to make well-informed bets about which products or services will be successful in the future; they have to make tough decisions that affect lots of people’s livelihoods. But none of that is as tough as deciding whether to pardon someone from prison, or whether to send people off to war.

Government has to do lots of things that cannot be measured by simple profit-and-loss sheets. The questions of government are more profound, and the answers are more elusive. Instead of asking, “How are we going to move more product this quarter,” or “Should we issue a bigger dividend to our stockholders?” presidents and policymakers have to ask questions like “How can we balance the interests of our allies who have conflicting goals for our foreign policy?” or “How can we apportion funding for medical research in a world of limitless need and scarce resources?” or “Should we intervene in another country’s civil war if it means preventing genocide?” or “What is the nature of ‘justice’ and how can we prepare people who are incarcerated to be able to re-enter society?”

CEOs have to deal with technically complex questions; presidents and governors and other elected leaders have to deal with morally impossible questions. If CEOs make the wrong decision, their company loses lots of money and lots of people lose their jobs. If a president makes the wrong decision, lots of people die.

Democracy is messy and fractious and frequently frustrating, but it’s the best system that human beings have so far devised to peacefully share power and make decisions about who gets what, when and how. Businesses are not democracies. Business leaders are appointed, not elected; they rule by fiat and force of personality, and are ultimately accountable only to the Board of Directors. CEOs can just decide to fire thousands of people, or decide that a certain product or service or company division isn’t profitable enough or promising enough to continue. Business leaders can just decide that they want to stop dealing with people or companies that are too demanding and annoying; businesses can just stop doing things that are too hard or too inconvenient.

Governments don’t have that luxury. America’s system of government is built for gridlock and bitter disagreements and unsatisfying compromises; the founders were wary of untrammeled majority rule and wanted to avoid handing over the government to the passions of the mob. America’s democratic system, compared to other democracies, has relatively strong protection for the rights of the minority party, to keep any party from gaining power and then steamrolling everyone else.

But one drawback of this systemic bias for protecting the rights of the minority party is that it can be hard for the U.S. government to be efficient, to get rid of unpopular programs or to stop spending money on small-but-powerful constituencies. Presidents and governors and legislative leaders have to deal with lots of nagging issues and pestering people who all have their own specific competing agendas for what they want government to do for them—whether it’s favorable treatment in the tax code, removal of onerous regulations, or public works spending to stimulate the local economy. None of these concerns can be easily dismissed or waved away—in a democracy, everyone has the right to organize into interest groups and air their grievances, and the government has to at least make a show of hearing them all.

Also, the government does a lot of activities that are never going to be profitable (or SHOULD never be run for profit). There’s not a lot of profit to be made in providing health insurance for poor, sick, 90-year-old dementia patients; that’s why we have Medicare—not a lot of private sector insurance companies are scrambling to get into the market for insuring the health of the age 65+ crowd. This is why the idea of for-profit prisons is so disgraceful. Prisons are supposed to be a public good—contributing to public safety by removing dangerous offenders from society, while making a positive intervention in the lives of convicts and preparing them to re-enter society as productive citizens (I know, I know…try not to laugh). Human beings should not be “monetized” as a source of corporate profits. There should never be a profit motive that creates a financial incentive to take away people’s freedom—even though this country was built on slavery, we should at least try to be better than that now.

When politicians try to “run government like a business” by privatizing everything and outsourcing government jobs to private contractors (like hiring private sector mercenaries for Iraq and Afghanistan instead of soldiers), or handing over public assets to private sector interests for a pittance, it tends to lead to bad results—because the private sector often lacks the government’s same standards of transparency and accountability. Instead of acting in the public interest, a private company’s biggest incentive is to act in the interest of profit. And private profit does not always serve the common good.

Businesses represent the interests of their customers, employees, shareholders and communities, but government’s constituencies are broader and more complex. Ideally, the government provides services not because there’s money to be made, but because “we the people,” in our imperfect, complicated democratic process, have decided that it’s the right thing to do. Over time, we’ve gradually, collectively decided that we want to have public schools, and universities, and health care for old people, and Social Security income for senior citizens, and transportation infrastructure, and workplace safety regulations, and environmental protection rules enforcement, and a big defense budget, and lots of other government expenditures and activities where we the people, through our representatives in Congress, have decided to spend money and express our will.

Despite its messiness and waste and occasional corruption and constant disappointments, democratic government is meant to represent the collective will of the people, operating by consent of the governed, built on a foundation of broad consensus and coalition-building to ensure that as many people as possible feel like they have a stake in the system. Government is not a private club; it’s a public space.

None of this is a good fit for a swashbuckling entrepreneurial turnaround artist, no matter how charismatic they might be. The systemic challenges of a complex bipartisan democracy cannot easily be wished away with mindless braggadocio and aggressive deal making. There are lots of good reasons why democracy in America moves so slowly and inefficiently—it’s because we have a lot of people on board the train, and no one wants to get jostled off and left behind.

Business isn’t better or worse than government, it’s just different. But people who say that government should be run more like a business are showing how little they understand about government. Because we should all be glad that government isn’t a business—a lot of the inefficiencies and frustrations of democracy are there for our own good.

jack sequim wa Loc: Blanchard, Idaho

I agree in principle. My point would be many basic operations truths are directly in line with private sector and government operations. 99% of our problems can be directly related to congress, senate, Supreme Court made densely of attorneys making decisions.
Obama care, hundreds of millions spent in studies to organize A-Z. Websites, customer service agents, payment processing ect, ect. Where given the same project to a seasoned CEO (post congress, Supreme Court) operations, website, staffing would have been efficient, rolled out in half the time at a fraction of the cost.

slatten49 Loc: Lake Whitney, Texas

I erred in not giving you kudos for your previous well-written response, as well as this briefer one. It was simply my intent to point out the vast differences in running a business as opposed to a government vast as ours is I would not dispute that it has expanded far beyond its original scope. But, then, so has our nation's population and its diversity.

The authors of both articles I posted wrote more eloquently and more authoritatively than I could have...thus, I cut 'n pasted their words. It is always a pleasure to engage in a respectable and meaningful manner. Thank you, sir.

I now leave to watch a movie with my wife.

Alicia Loc: NYC

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Rather than attempting to tackle this long article, I can only thank you for submitting it.

Radiance3

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Of course running government operation is not like running business corporation. The objective of the government must be for public service. It is a function where taxpayers pay taxes to fund this huge operations to manage our system of government that was set up as a democratic republic. We have laws to follow that is the constitution.

On the contrary, business operations objective is to make a profit, and to expand. Yes profit that is earned according to the guidelines established in compliance with all legal requirement set to function. Corporations have Articles of Incorporation and By Laws to follow. These are their guidelines. But corporations are also provided laws to comply with all legal matters required. Corporations pay taxes to the government.

In order to achieve their objectives, business set procedures that are productive , disciplined, and honest. They choose people who are qualified, honest, and hardworking in order to realize their goals. Therefore the owners of the business could gain profits to grow. Most businesses share the profits to their employees based on performance expectations, honesty, and overall achievements that contributed to the success of the business.

On the CONTRARY, government is run by politicians who as we know, mostly do not have desires to serve the taxpayers or the people in general but their own.

During the early years of the Founders, they did worked hard, sacrificed not only for their own, but with a vision dedicating their service creating a government of the people, by the people, and for the people.

But not anymore. We notice that our government officials who we elect to run our government do not have interest to protecting the people who they serve, but to advancing their political ideologies; to preserving their corrupt powers; to corrupt our financial system; to corrupt their position in order to amass dishonest means of achieving wealth.

Thus they surround themselves with cronies who will protect and preserve their powers for life.

Lately, the government of Obama and Hillary Clinton, has been so CORRUPT, DISHONEST, LIARS, CRIMINALS, with visions to satisfy their greed of wealth and power for life.

They fill up our government offices and departments with people who are politically in their basket of corruption. Thus to gain more, this corrupt government expand our system filled up with similar corrupt people regardless of whether they are qualified to doing the jobs. They are hired rewarding them for the works they did electing these corrupt democrat officials now totally ruining our freedom to destruction.

Barrack Obama and Hillary Clinton are the best examples of these corrupt, greedy, powers who wanted to take over this country for their own for life, as if they own it. In order to continue their greed of power, and fortune, they set up a shadow government now underway to creating a quo d'tat against the elected president duly elected by the people. They want to remove him by all means, dead or alive.

The people are lied at, deceived, and mislead. This is the greatest assault and injustice to our democratic republic, never envisioned by the Founding Fathers.

America, we can defeat this. please vote DEMOCRATS OUT on Nov. 2018 election. If you elect them, they will pursue their quo d'tat, removing our president who we elected.

That is why you can never compare a government with a business run corporation.

bahmer

Louie27 Loc: Peoria, AZ

Thanks, that was a great article by a Va worker. More truth than I have heard before. When my tour of duty was at an end I had a officer tell me I had to sign a release before I could be discharged. I told him I would not sign that release at any time since I had papers as proof of my injury in the service. He still tried to have me sign but I resisted until he quit asking me for the release. Thank God I stood my ground. I have had nothing but good attention at the VA. Sometimes it might have been a little slow but I persisted and received the care I requested. I have had great surgeons at the VA in Phoenix and great care after the surgeries. I admit that one has to be persistent when not getting the care needed but have seen that in the private sector also.

slatten49 Loc: Lake Whitney, Texas

Thanks, Louie27. It's good to read of decent care administered from the Phoenix area VA, as it has received much bad publicity in recent years.

PoppaGringo Loc: Muslim City, Mexifornia, B.R.

Well stated.

maryjane

All comments give me food for thought. While I understand, and mostly agree, that government cannot, and should not, be run for profit as business is, there is much improvement government could make by emulating certain business practices. First, well run businesses do not generally keep on employees who do a poor job, but government never seems to fire anyone no matter how bad an employee they are. Second, in a successful business one would never see money absolutely wasted as we see much of in all aspects of federal government. Third, business knows well that they must constantly pay attention to what their customers want and act accordingly. Government pays NO ATTENTION to the needs or wishes of the people, but instead operates completely outside of that. Fourth, businesses always have boards of directors auditing, overseeing and questioning and the business must pay attention and follow their board's direction. Government totally forgets and ignores who they work for, that they have bosses and who those bosses are. Though their bosses are the people, the people have no real control over their politicians, their government agencies, etc. The people seem to have no recourse when their government gives a grant to women bloggers in India or spends over $3 trillion annually on refugee resettlement and migration, and spending the people's money in these ways when millions of the people live in poverty, in terribly unsafe neighborhoods run by vicious gangs, and their children have horrible school situations that are unbelievably unsafe from drugs and violent gangs. No, we don't want government to make a profit as businesses do, but our government , every aspect, SHOULD have a limited budget, clear cut goals/duties/responsibilities, and should carry out those with the fewest employees and money possible, and should have to publish annually a line item report accounting for every penny spent and should be overseen by teams of professional auditors. There should never be any of our money spent on duplication of services and employees should not be better paid nor have better perks or benefits than similar jobs in the private sector. In business, employees don't make any rules because they are NOT owners. But, theoretically, the citizens OWN our government and should be making the rules for our employees and should have the power to fire them when they do not do their jobs to our satisfaction, BUT while businesses operate that way, and government SHOULD, government does not.