Jeff Neal for C.U.R.E. - Certain Unalienable Rights Endowment

Government is not a business

In Financial, Opinion on February 1, 2011 at 4:42 pm

Louis Gerstner maybe have been legendarily successful as Chairman of IBM, but his advice concerning how to execute a government “reinvention” (WSJ piece here) is misguided.

There are at least two fundamental differences between the US constitutionally created federal government and a business:

1.  One exists because its “customers” created it to, among a very limited number of other purposes, protect them from other “customers” infringing upon their “certain unalienable rights.”

2.  One’s powers include the power, backed up by the license to use power, to TAKE money from its “customers” so as to pay for its operations and carry out its purposes.

To apply business school management lessons to, or talk about efficiency of, the operations of the federal government is to misconstrue its purpose and to fail to contemplate and protect against the dangers of the potential abuse of the license to use force to compel behavior that comports with law.

Businesses (1) risk nothing but their owners’ investments, (2) can’t use force against customers who don’t do as they’re told, (3) are not, individually, an integral and necessary part of the nation, and (4) can make mistakes without endangering every other institution in its path.

Failure to see the difference between the nature and roles of government and business leads to many mistakes.  Control of the government fisc and custody of its immense power are not the same as making shareholders happy with a bottom line.  Analogies and comparisons that blur those distinctions are useful to the crowd that wants a bigger, more powerful government.  They do not lead to a more free society.


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