Run Government Like a Business: How’s That Working for You?
My Silicon Valley colleagues often grumble that government should be run like a business.
I understand my friends’ frustration. Rule by law, by definition, is a system of constraints that applies without much discrimination for circumstances. For an individual, that can be frustrating. For a society, that’s what differentiates a democracy from state control.
Want to see government run like a business? Look at what’s happening right now at the FBI, Justice, Education, and USAID.
Trump is writing executive orders as though he were the CEO of the United States while his unelected COO, Elon Musk, roams freely firing employees and intimidating those who remain with buy-out offers as Trump chooses government agencies to eliminate.
The fact is democracy is effective; it works. It just isn’t efficient.
Laws are written by elected representatives who are not experts. Agencies implement them by building expertise that isn’t easily available or duplicated, particularly at scale. Despite Musk’s claims about USAID, where do you find the expertise to curb HIV in underdeveloped countries, flooded with gangs and corrupt governments. And keep in mind, Congress created USAID and funds it – not the staff.
Laws are not easy to pass and even tougher to remove. Constraints piled on constraints makes a mess.
But piling on rules and regulations is not unique to the public sector. I’ve spent much of my life helping large private firms innovate and change faster. In doing so, I’ve seen bureaucracy, calcified procedures and tolerated incompetence in every one. I’ve also consulted with public sector agencies where the dedication and skills exceed the private sector while their pay is seriously south of their private sector peers. Ask any lawyer who’s clerked at a high level or economist who’s worked in the Federal Reserve.
Governments don’t serve shareholders who can buy or sell their interest at any time. Citizens are stakeholders for a lifetime. Private-sector CEO’s can choose to leave a market that’s no longer advantageous whereas government can’t just ignore a segment of the population that’s tough to serve. In fact, government often takes on the toughest jobs.
While at USC, I taught classes for cops moving into management for California Peace Officer Standards and Training (POST). Forget Law & Order or your favorite detective movie, one-third of large city police calls involve domestic disturbances,[1]. the most dangerous situations officers face. Between 2010 and 2014, 43 officers were killed while responding to domestic disturbance or domestic violence calls, accounting for roughly 8.5% of all officer fatalities during that period.
Cops don’t get to choose who they’ll serve.
Government is also stuck dealing with the externalities created by the private sector. Harmful pesticides that cause disease weren’t identified as a problem nor eliminated by farmers or pesticide manufacturers on their own. The same is true for the auto exhaust that turned 1970’s Los Angeles into a smog soup prior to the EPA.
It takes government to accumulate or do the research and Congress to pass rules that are in the public interest. Joni Mitchell summed this up eloquently in Big Yellow Taxi:
Hey, farmer, farmer, put away your DDT
I don't care about spots on my apples
Leave me the birds and the bees
Please!
Déjà vu All Over Again
We’ve operated government as business before. It wasn’t pretty.
Trump’s favorite president, Andrew Jackson began the spoils system in the 1820s. He introduced the practice of rewarding political supporters with government jobs rather than competence. He argued that this would make government more democratic and responsive to ordinary citizens. The phrase came from Senator William Marcy's 1832 declaration "to the victor belong the spoils."
The spoils system dominated federal hiring until the Pendleton Civil Service Reform Act of 1883. The legislation was triggered by President Garfield’s assassination. His assassin, Charles Guiteau believed he deserved a government job as a political reward. History warns us: Be careful what you wish for.
In the private sector, unexpected damage from mantras such as Mark Zuckenberg’s “Move fast and break things,” is contained within the company. Breaking things at Meta is one thing. Breaking the FAA or FBI is another. Moving fast and breaking things in the public sector affects all of us.
There’s no question bloat is ongoing issue in private companies, and especially in government. But before you get too excited about running government as a business, remember that I never met a private sector CEO who believed they were running a democracy.
[1] Police Response to Domestic Violence, Bureau of Justice Statistics, 1988 and California Department of Justice, OpenJustice database.