It’s an article of faith among the New Conservatives and Libertarians that the private sector does ANYTHING better than government. It’s usually stated just that baldly, usually preceded with an emphatic little introductory statement like “Of course everyone knows…” or “It goes without saying…” Whether we’re talking about delivering mail, running prisons, conducting research or regulating health products, the assumption is always that the Government couldn’t possibly do a “better” job than some lean, mean, market-driven private sector machine.
This curious article of Conservative faith manifested most recently in Ottawa, which last year elected a mayor without experience as a municipal politician because he’s a good corporate manager. During his campaign, Mr. O’Brien made frequent disparaging remarks about “replacing City Hall’s government mentality with a more businesslike approach”. This is somewhat akin to hiring a pipefitter to perform a lung transplant because (a) surgeons cost more, and (b) you’re sick of that old “medical” mentality when it comes to transplants, and want to see a fresh, new approach.
Mr. O’Brien’s sudden popularity suggested to me at the time that folks who think that a more “businesslike” approach is what’s wanted in government don’t actually grasp much about either business OR government.
The purpose of a business is to make a profit. If an organization provides goods and services, or works to achieve social goals, it’s NOT a business…or at least, not for long. It may be a not-for-profit, or a co-op, or a government, or a foundation, or whatever. But businesses exist to make money.
I don’t disparage that. I’ve been in business for myself for fifteen years now, and I do it to make money. I try to make money in a way that makes my city and country and world a better place, and I try to use my companies as a tool for achieving social goals; but their primary purpose is to generate profit for shareholders. And if they don’t, I’ve failed. That’s why corporations exist. To make money. When they stop making money, they collapse.
Governments do NOT exist to make money. Different beast. A government’s functions include the provision of programs and services deemed desirable by the governed, the defense of the realm, the promotion of national interests, and the establishment and maintenance of a legislative and policy framework. Those are essential functions, and they don’t make money. They eat it.
When people say that businesses do a better job than government, they generally mean that, in their opinion, the pressure to produce outputs and outcomes with maximum efficiency and economy is greater when there’s only one fundamental, measurable value determining “success” - a profit. And that’s true. Having worked both for government and in the private sector, I must say I find the private sector a lot easier; it’s simpler. Adjusting a margin is a matter of simple math. I can raise prices to the extent the market will bear, reduce my cost of goods sold, and presto - success.
Entrepreneurial evangelists like O’Brien believe they can treat a government like a pickle factory. Do More With Less! Eliminate Waste and Duplication! Increase Productivity! Well, yeah. All those things are good ideas, and good managers in both the private and public sectors strive for efficiency and economy. But “success” in government requires a whole new level of skill in the area of politics, the creation and maintenance of alliances between groups whose needs and interests diverge, and the ability to satisfy an electorate whose views of your role run the full gamut from socialism to free-market-driven anarchy.
In the face of that challenge, making a profit by building widgets is relatively simple. Widget makers like to dismiss all that other stuff - the need for consensus, alliances, the balancing of public and private interests, delicately negotiating the line between fiscal solvency with the need for service - as fluff. Until, of course, they achieve office - and fail.
One other difference, while we’re on the subject. There’s a considerable gap between “ethical” behaviour as practiced in the private sector, and by government. Mayor O’Brien is under serious scrutiny for allegedly having offered a political opponent inducements not run against him. In the private sector, that’s normal, and O’Brien appears genuinely puzzled by all the fuss. Bribes and kickbacks for the award of supply or service contracts, an extra top of the line laptop shipped in filling an order, Christmas presents from suppliers - it’s all business as usual. As long as the shareholders continue to make money, whatever works and isn’t actually illegal (or, if illegal, whatever isn’t actually detectable) is okay. Conrad Black’s protestations of innocence are at least partly sincere: he’s really saying “Come on, folks…this is business. This is how it works in the real world.” And he’s right. But we demand a higher standard of our elected officials.
I rather suspect that Larry O., with his business ethics, the impending collapse of his “no tax increase” promise, and his utter lack of political skill, is going to turn out to be one of Ottawa’s rare one-term mayors, another smug private sector evangelist who arrogantly assumes that because he can sell widgets he can govern a city. Wrong-o.
As someone who leans right, I have to say that I don’t always think that the private sector does a better job. However, if you get the public sector to do the job, you have to remember that we’re using the taxpayer money. And that’s a bit of stickler for me. Take for instance the current budget situation in Ottawa. Should government be extracting five per cent more from the taxpayer, all the while still subsidizing recreational services? (The library is still free as far as I know). It burns me that we’re asking the taxpayer to pay more, all the while funding non-essentials (no, I don’t think a library is a government, and a private group could run one).
There’s a certain mentality among pro-public-sector types (not everyone, but among a certain number of them) that seems to feel they’re entitled to taxpayer money to fund whatever they want, whether it’s a government function or not. I don’t have a problem funding recreation on principle–except when people are already taxed enough as it is. If I were a public official, I’d be amenable to funding such a project if the taxpayer was willing to fund it. If they’re tired of higher taxes, then as far as I’m concerned, they don’t want it. You can’t fund what you’re not willing to pay for.