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SodaHead Conservatives Say Willard Would Be Best To Run The Country Because He's A Successful Businessman (Some Would Argue This) But Government Cannot Be Run Like A Business.

ὤTṻnde΄ӂ 2012/04/29 04:30:12

Why Government Can't Be Run Like a Business



Why Government Can't Be Run Like a Business




Why Government Can't Be Run Like a Business













In a recent article on PolicyMic,
pundit Masuma Ahuja asked why more business people don't leave Silicon
Valley for the road to the White House. This begs the question: Can
government be run like a business? It's the topic of many stump
speeches, but is it even possible?


On a high level, running government like a business is a good
principle. Government should be as efficient, accountable, and
transparent as possible because taxpayer monies are at stake. However,
the statement “government should be operated like a business” is a gross
oversimplification, and it shows just how little politicians understand
about how businesses actually work. On the contrary, inherent
differences between government and business prevent government from
operating like a business.


The reason is not simply because businesses seek profits and governments don't, as Chris Miller recently argued on PolicyMic.
Government may not seek profit, but it does seek power. It wants to
jump through bureaucratic hoops and stop you from bad behaviors. The
nature of bureaucracies is to grow in size and scope, and this is often
more dangerous than maximizing profit.


There are many differences between businesses and government that
make it nearly impossible for the government to operate like a business,
and significant reasons include the following:


(1) Government is a monopoly; businesses operate in a market.


Because businesses face more competitive pressure than government,
they have an incentive to innovate their products, improve their
services, drive down prices, become more efficient, etc. Government
doesn’t experience this kind of competitive pressure because it is the
sole provider of its services, so it does not have an incentive to do
those things. Government can afford to deliver sub-par service because
it prohibits other firms from entering the market.


(2) The knowledge and incentives are different.


Individuals remain rationally ignorant about the waste in government
because their share is small, and their time is better spent in other
ways. On the other hand, business executives have a stronger incentive
to be be informed of the waste in their organizations.


(3) They make decisions differently.


Leaders made decisions differently in businesses and in government.
Decisions are made by consensus in a representational democracy like the
United States. In a business, the power to make decisions tends to be
more centralized. Decisions are made by a select number of individuals,
by polling all of the employees.


Participants also make decisions differently. In a market,
individuals always get to decide what they pay for, whereas in a
democracy, they have to go along with whatever the majority wants.


(4) Taxes and retail prices are different.


People are free to decide to patronize businesses voluntarily, but
they are required by law to pay money to government. If a person thinks
that a price of a good or service is too high, then she will choose not
to pay. If a person thinks that taxes are too high, it doesn't matter;
she is forced to keep paying them or get thrown in prison.


Furthermore, there is a limit to how much a person will pay for a
product. The act of raising prices is not malicious. Companies incur
costs that they have to cover, and they have customers whose
willingnesses to pay is largely dependent on price. If a company raises
its price too high, then individuals will stop voluntarily buying its
product or service. This means that the company will not be able to
cover its costs, and then it will go out of business.

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Opinions

  • EdVenture 2012/04/29 22:35:04
    EdVenture
    +1
    Because business wants to exploit it not improve it.
  • Waldorf 2012/04/29 13:24:32
    Waldorf
    Does it make any difference, given the poor job of Obama and marginalizing of anyone but Obama or Romney? If I wanted to get Obama out of there, what would I logically do?
  • Lady Whitewolf 2012/04/29 10:27:20
  • mrdog 2012/04/29 09:37:30
    mrdog
    Executive position..... aha... community org. or businessman.... that is the choice...bark
  • MissingTheO.C. 2012/04/29 05:28:42
    MissingTheO.C.
    so sick of these elections questions. lol
  • tommyg - POTL- PWCM-JLA 2012/04/29 05:20:04
    tommyg - POTL- PWCM-JLA
    When an entity decides that it isn't concerned about it's debt, it ceases to be a rational organization.
  • S. Gompers 2012/04/29 05:17:27
    S. Gompers
    Those are RINO's telling you that, they should join the Democrats. Romney is a liberal.
  • Z 2012/04/29 05:13:57
    Z
    +1
    These are all the exact reason that the government should be run by businessmen.
  • keymanjim 2012/04/29 04:57:27
    keymanjim
    +1
    If a company goes too far into debt they go out of business.
    Like obama adding $1.5 TRILLION a year each year to our debt lost us our AAA credit rating.
  • john Kills 2012/04/29 04:50:42
    john Kills
    This American says Ron Paul is best to help the country
  • Arizona1950 2012/04/29 04:49:42
    Arizona1950
    Paul has taken Louisiana according to the state campaign director.

    This makes 4 states an only one remains to make it official for the 5 state necessary to be nominated from the floor. It appears, that the very state that could push Paul to the finish line could be Romney's very own state of Massachusetts.

    http://www.sodahead.com/unite...



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