Monday, May 05, 2008

The Business Of Running Government

There's an interesting post via MCB regarding Governor Bredesen's comments that Tennessee government and its budget must operate more like a business. The concept that government should operate like a business has been often touted by those in elected office (and sometimes by pundits in the public arena too).

But should government follow business models?

One comment on the post from Southern Beale says "Government should be run like *government* — of the people, by the people, for the people. Running government like a “business” has lead us to the problems we see in Washington right now."

On the one hand I agree with with SB - the two groups seem to be best operated separately, with different priorities.

But the reality is that business relies on government for success, and government relies on business for success as well. I can think of very few products made and sold by any business which is free from governmental policy or regulation.

The oft-mentioned episode in the American Colonies called "The Boston Tea Party", resulting in dumping crates of tea into the harbor, is surely an episode too of government insuring success for big business and failure for smaller businesses. As noted on this web-site:

Many people today think the Tea Act—which led to the Boston Tea Party—was simply an increase in the taxes on tea paid by American colonists. Instead, the purpose of the Tea Act was to give the East India Company full and unlimited access to the American tea trade, and exempt the company from having to pay taxes to Britain on tea exported to the American colonies. It even gave the company a tax refund on millions of pounds of tea they were unable to sell and holding in inventory.

One purpose of the Tea Act was to increase the profitability of the East India Company to its stockholders (which included the King), and to help the company drive its colonial small business competitors out of business. Because the company no longer had to pay high taxes to England and held a monopoly on the tea it sold in the American colonies, it was able to lower its tea prices to undercut the prices of the local importers and the mom-and-pop tea merchants and tea houses in every town in America.

In an article for Harper's this month, writer Kevin Phillips shows that intentional governmental policy has altered the way government reports on business and the economy in general, with the result being that few Americans get an accurate picture of how weak or strong the economy truly is. How we have allowed massive changes to the definitions of unemployment rates, inflation, the consumer price index, etc, has had a very plain result: the average person has no idea what the economic status of the nation or individual might be.

All of the above to say that really, business has been running government for a very long time.

1 comment:

  1. All of the above to say that really, business has been running government for a very long time.

    I think some of our Libertarian friends might think it's the other way around.