As George W. Bush campaigned for the presidency in 2000, many supporters touted his education. If elected, they said, he would be our first president with a master’s degree in business administration.
His failures as a businessman are well documented, of course. Those who invested in his first two oil ventures took heavy losses. Spectrum 7 Energy Corporation made him CEO. Bush rewarded the company and its investors with more losses and $3 million in debt.
That he received an MBA was irrelevant to his qualifications for the White House. Yet for decades, many have been clamoring for government to be run as a business.
The U.S. government has an extensive administrative reach. Its departments oversee forms of research on agricultural production, space exploration and highway safety. There are offices that regulate commerce or set standards for the quality of beef.
Hallmarks of this form of governance are a politically insulated civil service and established procedural and participatory rights. It is not a system without flaws. There are legitimate concerns over bureaucratic dysfunction, the potential for waste, debt and the cost to operate so many offices.
There are areas where reform is needed. But to simply apply business principles to government is misguided at best.
In the 1970s, the USDA increased funding for research on gypsy moths, including one on the moth sex pheromone that became a target for critics concerned with wasteful spending – and on the surface it would seem to fall into that category. However, such research was essential in finding methods to slow an infestation that caused timber losses of an estimated $28 million across the Northeast in 1981.
Governmental agencies grapple with situations that elude a profit vs. loss model, one that treats people as customers. The recent – and quite inefficient – slapstick where the USDA fired some staff under the Elon Musk chainsaw then scrambled to rehire as bird flu raged is an example. In short, a business that serves customers and a government that serves citizens are quite different.
The end goal for business is profit. Government acts more as a nonprofit. Of course, well managed nonprofits are efficient, responsive and innovative – qualities valued by those who call for the business model.
“The virtues of nonprofit government are deep, and the experience that gave us the nonprofit norm in our public sector lies so deep in our history that we may easily forget it,” wrote Yale law professor Nicholas R. Parrillo, author of Against the Profit Motive: The Salary Revolution in American Government, 1780-1940.
There was a time when the U.S. government was run like a business. Its administrative officers were provided incentives to perform their work. It was a system that, during the nation’s first century, was practical and inexpensive. According to Parrillo, facilitative payments and bounties provided motivation – government officials earned their pay through fees paid by those seeking benefits or through the collection of fines. The potential for corruption and partiality made this form of governance wildly unpopular, leading to a salaried and protected civil service and other reforms.
“It wasn’t that this maturing administrative state was necessarily more pure than business, for which the profit motive remained a central and guiding principle,” Jon D. Michaels, a UCLA professor of law, wrote in the Harvard Law Review. “Rather, this maturing administrative state simply had powers, prerogatives and obligations that were (and remain) unlike almost anything found in the private sector.”
The public sector could take lessons from the business world, and vice versa. But the solution to some of the true issues related to government bureaucracy is not in slapping a private sector methodology over it. Bush’s only business success, after all, was his investment in the Texas Rangers baseball team and stadium – which benefited from an injection of $135 million in sales tax funds collected by local government. Rather, it is to first understand the administrative model and its functions, then improve on it.
(1) comment
All the money laundering and kick backs will be exposed. And the tariffs will work out for the best.
Welcome to the discussion.
Log In
Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.