It’s no secret that I’m a fan of business enterprises and tend to trust business people at most levels—from the mom and pop at their grocery store to the CEO of an industry-leading corporation—over most elected and non-elected functionaries at most levels of government.
This is not to say that I hate government and loathe public servants. They have their place. I understand that a regulated marketplace and managed environment usually produce better outcomes and endure longer than uncontrolled chaos, and that stable laws and their enforcement promote peace and civilization among people. Still, my career has been and my heart abides with the commercial side of things.1
I also know that we are all human beings with complex reasoning. People don’t become smarter or more cautious if they choose to work in government rather than on behalf of an industry or product. People don’t become more venal or selfish if they want to make software or shoes, or sell automobiles or insurance, instead of writing and enforcing rules and regulations. We choose our path—business or government—from a matrix of causes. The business person is not just a greedy bastard who wants to grab the money. Many people, if not most, go into business because they want to produce something that will enrich lives and make people happy or better off. They choose business because there they will be free to make the products they like in the way they think best. Similarly, most people in government choose that path because they want to write good laws, see justice done, and make people happy and better off. They want to be close to the core of things and have a vision of how to make their society function more effectively.
But I am also realistic. I know that some people go into business because a small enterprise, or an isolated department in a large one, is usually easier to manipulate and a better place out of which to run their scams than a large government bureaucracy with its built-in ranks of inspectors general and review boards. In this case, think of Bernard Madoff’s pyramid scheme or the wheeler-dealers at companies with ill-defined products and services like Enron and WorldCom. And I know that some people in government do want authority and the power to make other people jump through hoops with the full force of law behind them. Think of Lois Lerner and her minions at the IRS or Eliot Spitzer as Manhattan District Attorney.2
But what is true of both spheres is that, to enter them, then to survive, and eventually to rise, a person must make promises, enter agreements, keep his or her word, and offer fealty. You must promise the voters or the hiring manager that you will be good in the job. You must serve at the pleasure of someone above you and offer them service in return for continued employment, favor, and reward. And in most places, you must show your loyalty, at least to the organization if not directly to the person in charge. From the mom-and-pop grocery to the biggest corporation, from the town council to the federal government, you are dealing with human beings and their conflicted emotions, motives, and reasoning, as well as their own insecurities.
Given all this, why do I favor business over government? Basically, it’s a matter of scope and reach, and the opportunities for disaster.
Business people can only do so much damage through their actions. If they make poor choices or bad products, their first victims are usually their own prospects and those of the employees they hire and the shareholders who trust them with their investment. In a free market, where people are allowed to buy what they want and need based on their own judgment, it’s difficult to offer a bad deal or spin a bad product for long. Hype and market momentum will only carry you so far. Eventually wrong choices, shoddy workmanship, or bad practices will make themselves known and the corporation will lose money and perhaps even fail. Think of the Edsel, New Coke, or Star Wars Episode I as examples of notable market failures. Yes, a business run badly by people with no sense of foresight or honor can pollute the rivers and the atmosphere, disappoint and sometimes injure their unwary customers, and put their unknowing employees at risk of their careers and futures—but that’s where a well-regulated government free of corruption steps in to protect the environment, the innately foolish, and the innocent bystanders.3
On the other hand, elected government officials and the unelected agencies they appoint and staff through the Civil Service have the power and force of law behind them. The decisions they make are actively enforced—usually without consequence to themselves—and endure for years if not decades. Their wrong choices and feckless policies can mess up all of society. And without the automatic self-destruct of the marketplace to eliminate bad or ineffective programs, they can proceed unmolested practically forever.
If a business executive makes a mistake or miscalculation, generally the worst he or she can do is mess up a product line, inconvenience or anger customers, and lose business. If you disagree with a corporation’s ethics and practices, you can choose to boycott its products. If a business decision causes injury or costs lives, government agencies will be quick to establish blame and impose sanctions. And if a business loses money, it loses the faith of its bankers and creditors: stock price falls, bond rates rise, loans dry up.
That doesn’t work with a government and its laws. If a government department or cabinet secretary makes a mistake or miscalculation, the results can damage a whole sector of the economy or population, perhaps even cost lives. When a government program does financial or physical damage, it may take years for the results to be analyzed, cause and effect established, and corrections applied. Rarely, if ever, do the people responsible suffer personally for their mistakes. You cannot choose to opt out or boycott a bad law, agency requirement, or program. And suing for damages is problematic, because the government runs the court system. Also, the government agency usually has the edge in running its own oversight committees and accounting systems which, being staffed by imperfect human beings, can spin results and cover up failures for an unimaginably long time. And a modern democracy in normal circumstances turns over only the top layers of government, and then only at specified times through campaigns and elections. The middle layers, where most of the actual day-to-day decisions are made, continue in place for years and for whole careers. If a government program loses money, legislators generally vote it more: taxes go up, the government prints more money, inflation increases.
The extent of my concern goes even further. If you work for a business and disagree with its policies and directions, you can always quit. That move may take guts and planning; you may have to take a cut in pay or even “live on your hump” for a while. But you can usually find another job. The ability of the business to follow you out the door and persecute you is fairly limited, especially with a well-regulated and alert government to enforce fair labor practices. But if you work in the government sphere and disagree with its policies and practices, the bar is higher. You have fewer competing opportunities to work elsewhere in another branch or at a different level of government. And disgruntled former supervisors have the force of law and tradition to disrupt your life.
Similarly, if the business you work for gets upset with you or your performance, the best they can do is terminate you, and even then government agencies exist to help you fight against unfair discrimination. Your employer has to clear a pretty high bar to prosecute you for wrongdoing, and most businesses don’t want the bad publicity. If you work in government, your boss can pursue you with charges of malfeasance and corruption. A disgruntled agency can file complaints against you, put you in jail, or run you out of the country. In some cases, they can kill you.
A business that goes too far wrong sooner or later runs out of customers, resources, employees, and financing options—usually in that order. Eventually, the business has to close, and then the operators must answer publicly to their creditors in bankruptcy court. Government can conceal its mistakes, or print money endlessly or raise taxes to continue financing its mistakes. Eventually, one party will get booted out of office and another party will come in. In either situation, the bureaucracy that supports these elected and appointed officials, will sail serenely onward. They are the bulk of government. They don’t lose their jobs. They may have to pursue new policies and practices for a while under the new party in charge. But the power to tax and the impulse to govern remain intact.
The only way to stop a government gone wrong is when a mob, with torches and pitchforks, starts heaving bricks through windows. Then you are in a state of insurrection and ultimately revolution. This is like turning over the table and calling for a whole new game. But note that no revolution ever resulted in less government or no government at all. The board is never wiped clear. The new governors are usually worse than the old ones. And sometimes the players don’t even change places. Think of how many members of the tsarist secret police, the Okhrana, went right on working for the Soviet Cheka—or how many members of the Soviet KGB slid right into the FSB, the Russian Federal Security Service.
I favor business over government because running a business is riskier, its mistakes can do less damage, and its failures are usually small and contained. The commercial sphere is also more democratic, because anyone can build a stake, enter the game, and play as long as his or her wits and inspiration last. And when that run is done, it’s done. Government is a closed society that believes it can go on forever.
1. Even though my first job out of college was as junior editor at the Penn State Press, an arm of the government institution that was my alma mater. But there I saw a public function that acted just like a business. Their job was to publish scholarly books and produce enough of an income stream to support themselves so that they could publish even more books. Their first questions about accepting any manuscript were not “Whose interest does it serve?” or “Does it benefit the university?” but rather “Who will read this?” and “Does it fit into our established market niche?” (They also pointedly asked, “Is this a reworked doctoral thesis?”—because theses by their nature make narrow books with limited market appeal.) In that way, the university press was just like the commercial tradebook publisher where I landed next.
2. However, I’m also a believer in the theory that most people do not rise in their organization—whether it’s business or government—because they want personal power over other people. Most of us want the authority and freedom to do things the right way, in the manner that we see fit, and for which we are prepared to take responsibility. Most of us chafe at answering to the dictates and decisions of the people above us, rather than desiring dominion over the people below.
3. A badly run government agency—such as the Securities and Exchange Commission, when it nodded blindly over Bernie Madoff’s shenanigans—serves no public interest. And a manifestly corrupt agency serves only its own interest. Either is a leech on the industry it regulates, the people it pretends to protect, and the taxpayers who support it.