There is a so-called U. S. government "efficiency" drive currently underway delegated by President Donald Trump to unelected billionaire Elon Musk. Whether Musk has the authority to do what he is doing has become a matter for federal courts (for example, see here and here). In this piece I want to discuss the underlying assumption behind Musk's approach and see if it makes sense, namely, whether the government should be run like a business. Spoiler alert: It shouldn't be and can't be.
That's because there are important overarching differences between the goals of government and those of a business that explain why strictly imposing business-style management on government will not work. First and foremost, business owners are allowed to freely make two important choices: 1) which products or services to sell and 2) which customers to target for those products and/or services.
Government, by contrast, does not get to choose either of these. Government must serve all residents of a jurisdiction, whether it is a city, a state or a country, and provide them with goods and services as determined by elected representatives put in office by constituents of that jurisdiction. (I'm assuming a democratic form of government. But even in autocratic regimes, no one person can determine what goods and services are necessary for every locale and so others, appointed or elected, help make and implement those decisions.)
To say that you want government to run just like a business is to say that the government can ignore the directives of elected bodies overseeing them and target narrow segments of the population for various services, only providing those that yield a "profit" from the fees collected from those served.
(I invite to you think about your own experience with companies, especially large ones that have provided poor service and/or lousy products so as to remind yourself that businesses frequently disappoint us and sometimes cheat us—which is when we want government to protect and help us. It's also wise to remember that corporate bureaucracies can be as frustrating to navigate as government ones. I'm thinking here of health insurers, especially those who try to get out of covering the very health care they promised to pay for.)
It is, of course, rational for business owners to choose to sell only those products and/or services for which their customers will pay prices that yield a profit. Without profit, businesses ultimately fail.
Government, however, provides goods and services determined by elected representatives. That such decision-making is likely to be "inefficient" compared to decisions coming from one person with sweeping, dictatorial powers such as a corporate CEO should not be surprising. But the goal, as I've stated above, is entirely different. It may be "inefficient" to get a group of elected representatives to consider and agree on what products and services (for example, drinking water and police protection) the government will provide to its constituents. But it's very important that they do.
Most of us would not want taxes levied through the decision of one person, especially if that person were not elected to represent us. Likewise, we have a stake in clean, drinkable water. Naturally, we will want a say in what our water rates will be, what investment is made to provide water treatment, and what environmental laws are enacted to protect the purity and safety of the water we drink.
None of this is meant to be an "efficient" decision-making process in the manner of a corporate CEO. Rather, it is meant to reflect the broad consensus of constituents including those owning businesses and not leave such decisions to one person alone—which strictly speaking would make that person a dictator.
Free societies don't generally entrust decision-making to one person because 1) no one person can possibly represent the wishes of all constituents and 2) we know that power tends to corrupt and absolute power corrupts absolutely. In other words, we know human nature, and so we put safeguards in our institutions that prevent bad actors from unilaterally imposing their will on us.
So, does this leave room for the implementation of any business-style practices in government? The answer is yes. Salaries for government employees at nearly every level are generally fixed and cost-of-living raises or raises due to labor agreements or seniority are generally automatic. There have been few ways, except perhaps promotion, to recognize exceptional work. Now, however, many governments offer performance-based rewards for exceptional work. The U. S. Office of Personnel Management offers cash awards to federal employees who exhibit such performance.
Perhaps most the most visible service of the U. S. government is the U. S. Postal Service (USPS), which appears to be the only service prescribed in the U. S. Constitution to be run by the federal government. Because of the nature of this service—users pay for mailing services just as they might a private courier and package service—there have been periodic attempts to streamline the USPS to run more efficiently. The outgoing postmaster has proposed a 10-year plan to reduce costs and increase the postal service's share of the package delivery market. Perhaps the most significant development leading to the long-running financial woes of the USPS is the 42 percent decline in first-class and marketing mail between 2007 and 2022. This mail used to be the bread-and-butter of the postal service. The decline is not surprising in an age characterized by increasing electronic communications and payments.
That the postal service needs to think more like a business is not controversial. But we must also remember that unlike private package and courier services, the USPS is tasked with serving ALL Americans living and working at ALL addresses in the United States and its territories. We should NOT expect the postal service to be consistently profitable given that it must maintain an infrastructure and a sufficient number of employees to reach even to the most faraway and spread-out addresses in rural areas. Think: rural Alaska and Wyoming. It is therefore reasonable to expect that we might subsidize mail delivery so that all Americans can enjoy fair prices for and timely delivery of mail and packages wherever they live.
It is not misguided to want government to be more efficient. It is not misguided to believe that some government programs are just wasteful boondoggles for the most connected. Think: Expensive weapons systems that don't perform as advertised.
But government will never be as efficient as business because it must serve all of us and must do so at the direction of a group of elected officials. It's not necessarily efficient, but it's democratic. And a society without democratically elected leadership is subject to the rule (or misrule) of one person.
Kurt Cobb is a freelance writer and communications consultant who writes frequently about energy and environment. His work has appeared in The Christian Science Monitor, Resilience, Common Dreams, Naked Capitalism, Le Monde Diplomatique, Oilprice.com, OilVoice, TalkMarkets, Investing.com, Business Insider and many other places. He is the author of an oil-themed novel entitled Prelude and has a widely followed blog called Resource Insights. He can be contacted at kurtcobb2001@yahoo.com.
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