A reader recently asked me to repeat a previous column explaining why calls to run government like a business misunderstand the nature of both. I found it–it was from late 2016–and I agree that in the era of Musk and his “government efficiency department,” it’s once-again timely. It was called “The Business of Government.”
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Americans like to believe that government should be run like a business. That belief–pernicious and naive– helped elect Donald Trump, and its persistence is evidence (as if any additional evidence is needed) of the public’s profound lack of civic literacy.
Should government be run in a businesslike fashion? Of course. Is managing a government agency “just like” managing a business? Not at all.
A former colleague recently shared an article addressing the differences between business and government. Addressing the myth that anyone who can run a successful business can manage government, the author noted
This is not a 21st-century — or even a 20th-century — phenomenon. In a classic 1887 article, Woodrow Wilson, then a professor at Princeton University, maintained that there was a “science of administration” — arguing, in effect, that there were principles of management that transcended the context in which they were applied. “The field of administration is a field of business,” wrote Wilson. “It is removed from the hurry and strife of politics.”
Later observers and scholars of public administration thoroughly discredited this notion. The pithiest statement on the topic came from Wallace Sayre of Columbia University, who argued in 1958 that “public and private management [were] fundamentally alike in all unimportant respects.” In 1979, Graham Allison, then dean of the Kennedy School of Government at Harvard, used Sayre’s comment as a launching point from which to examine similarities and differences. He noted that both private firms and governments must set objectives, develop plans to achieve those objectives, hire people and direct them toward the achievement of objectives, and manage external environments. But he observed that the way in which these things occur is often fundamentally different from one sector to another.
The article lists some of the important ways in which private enterprises differ from public ones.
Government is about this thing called the “public interest.” There is no such animal in the private sector. Private firms care about their stakeholders and customers; they do not generally care about people who do not invest in their businesses or buy things from them. Thus, accountability is by necessity much broader in government; it is much more difficult to ignore particular groups or people.
Private-sector performance is measured by profitability, while performance measurement in government focuses on the achievement of outcomes.
Compromise is fundamental to success in the public sector. No one owns a controlling share of the government…. The notion of a separation of powers can be anathema to effective private management. It is central to the design of government, at least in the United States.
Government must constantly confront competing values. The most efficient solution may disadvantage certain groups or trample on individual or constitutional rights. In the private sector, efficiency is value number one; in government, it is just one of many values.
Government has a shorter time horizon. In government, the long term may describe the period between now and the next election. Thus there is a strong incentive to show relatively immediate impact.
Government actions take place in public, with much scrutiny from the press and the public. There is no equivalent of C-SPAN showing how decisions are made in the corporate boardroom. Corporate leaders do not find it necessary to explain their every decision to reporters or even to employees.
When corporate executives are elected to run cities or states, they often expect to operate as they did in their companies, where they made the decisions and others obediently carried them out. But legislative bodies–even those dominated by the political party of the chief executive–are not “minions.” They too are elected officials, and they bristle (rightly) when a mayor or governor or president presumes to issue orders. Successful relations between the legislative and executive branch require negotiation, diplomacy and compromise–and those aren’t management skills generally found among corporate CEOs.
Trump and most of his cabinet nominees lack any government experience. Most also lack any education relevant to the missions or operations of the agencies they have been tapped to lead. They don’t know what they don’t know.
And it has become quite obvious that the concept of “the public interest” will be new to all of them….
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As we prepare for Trump II, nothing in those last two paragraphs has changed…..
I don’t think that any of Trump’s appointees give a single damn about any of these principles of management in government. Worse, neither does Trump. He and his minions are all transactional all the time. But, according to the monstrous Steve Bannon, destroying the administrative state is the whole point of Trumpian politics.
Trump will expand his grift to include all his ass-kissing buddies. It’s what psychopathic despots do. And the American voters – at least the ones who actually voted – have handed this cabal of greedy morons the keys to the kingdom.
When 40 million people don’t vote, this is what happens to a decaying democracy. We were barely recovering from the disaster left from Trump 1.0. The question I share with many is: Will we be able to EVER recover from the coming disaster of Trump 2.0?
They don’t know what they don’t know. A very good description of the modern “republican” party in general. Sadly, they also have no interest in finding out what they don’t know.
It should be evident that business isn’t like government. The key to the best of both worlds is that civic literacy that seems to be out of reach. We really need to address the curricula in our public schools. As we know, one party “loves stupid people.” The thought of an informed electorate is anathema to that party. Let’s infiltrate local PTAs and school boards. It’s an old project of the former Republican party, and it has been very effective.
Lots to worry about (I think those of us who are critical of where we are headed recognize that Trump 2.0 is probably 10X Trump 1.0) but maybe my biggest one is the point about compromise. In a well-functioning administration / government, this does exist and is key to avoiding the worst outcomes. This time we have alignment across all three branches of government, backed up by a Supreme Court with – at the most generous description possible – uncritical oversight. The only competition or tensions between the co-equal branches of government this time may be the race to the bottom in trying to outdo each other vandalizing the government.
“They don’t know what they don’t know.” To that I would add Talleyrand’s assessment of the Bourbon monarchs: They have learnt nothing and forgotten nothing. And here we go again.
I’ve said that one of the reasons Trump ended up indicted in Georgia, Florida, and D.C., is that he never understood that things he could get away with in business that were unethical but (often just barely) legal, or that crossed the line but with little consequence, were serious felonies if you tried them in government. And now he has immunity, if he can call those things “official acts.” Let’s hope we can make it to the midterms, and that voters come to their senses.
WADR….the “people” can see the HUUDGE differences between a halfway reasonably run business and the current Federal government (and many state governments). No business would allow its suppliers to charge hundreds of dollars for its toilet seats. No business would allow lobbyists to decide its processes and procedures. I could go on. There are good reasons why the trust in government is LOW. It isn’t about DEM v/s GOP; it’s about politics versus governing.
Case in point: Musk has set his sights on eliminating the Consumer Protection Bureau because “it overlaps other departments’ duties.” The CPB has saved $21 billion for consumers and has a budget of $710 million. I don’t care whether you’re in the public or private world, but why would you want to eliminate a department that makes that kind of return?
Oh yeah, you’re corrupt!
Vern likes to call them psychopaths, and I like to call them sociopaths. They have found themselves in positions of power in the boardroom and in Washington. They don’t care about other people. Period. And it works great when you have no conscience. There are zero internal negative consequences for being a deplorable human being. In fact, they are promoted within private business.
In both the public and private worlds, leadership is missing from our landscape, which is MUCH different from management. The main difference is that instead of having the power of position to rule over people; leadership is all about serving people or those who are subordinate to you. Those in the public realm should be servant-style leaders because they represent the people in their districts. However, it is rare that a politician uses their power to serve the people.
In both the public and private worlds, the most common flaw is a misuse of power. I always lean on Paulo Freire here because he wrote the book on oppression:
“Leaders who do not act dialogically, but insist on imposing their decisions, do not organize the people–they manipulate them. They do not liberate, nor are they liberated: they oppress.” ~ Paulo Freire, Pedagogy of the Oppressed
Elon Musk should concentrate on returning his fortune to the world, following the examples set by Warren Buffet, Bill & Melinda Gates, George Soros, et al. instead of his buffoonish antics in step with kissing the trump ring. Just think of the difference a dose of humility would do for the world. BTW, he has already increased his fortune by $70 billion since his bff won the election, and the new administration hasn’t even begun! I predict his ascent to trillionaire status will occur during the trump presidency, barring another prediction: tariffs et al will send the country, including Musk, into a tailspin. I really hope neither happens of course, but predicted deregulations could elevate the brilliant and clownish richest living person, while every single economist alive may just convince trump that his beloved tariffs are really taxes on every citizen (I think he’s just playing the “oh I was never really going to do it; just look at how it worked without even levying a single tariff”!).
That was one of your best, sadly so. Thank you.
Just finished listening to Dr. Fauci’s memoir. The epilogue is particularly chilling as he considers American zeitgeist. I am particularly concerned about the damage that can be done to funding research. Trump is a bitter man who was never really accepted by his billionaire “peers” (because he lied about his wealth so is he??). He doesn’t have the interest in charity held by former presidents and billionaires. The Musk Foundation supports various causes, something I find redeemable about Elon Musk whose political antics to turn voting into a lottery are definitely wrong if not illegal. I have nicknamed Trump the Great Destroyer because his interest is in creating ruins to demonstrate power. There is no alternative after the destruction of institutions – just rubble that the average person will endure. Even attempting to ensconce a billionaire contributor as Secretary of the Navy is an insult to those serving. Money money money – it’s a rich man’s world. Believe it.
Reminds me of how idiotic it has always been to hire business executives or senior military officers as presidents of colleges and universities. A total mismatch in culture and skill sets. Sadly it happens way too often.
Looking for miniscule scrap of positive.
GOOD POST.
What diversity guarantees is that every human sees humanity uniquely.
Science guarantees that the Earth, moon, Solar System, and Universe are natural and reliably predictable mathematically.
What culture (and politics) dictate is tribal behavior attuned to protecting the past.
That’s a volatile mix that guarantees our chaotic behavior.
Thank you for posting this again. I remembered you having common sense points about running a business vs a government agency. I need to bookmark this post so I can use it in the future. All the best!
Only one of the pillars of our democracy appear to be surviving…with Trump and his ilk only focused on the Executive branch. When the Legislative and Judicial branches do not share that power equally, our democracy doesn’t have a chance in hell and is relegated to authoritarian rule…Trump’s dream come true.
Wilson’s assessment that “there were principles of management that transcended the context in which they were applied” was, sadly, adopted by a large company in Indianapolis around 2000. Its leaders decided that anyone who had managerial skills could manage anything. My husband’s new boss understood nothing about what he did and made decisions that turned the job he loved into a nightmare.