A popular refrain these days is that the government should be run more like a business. Rarely do we hear what this means.
In civics, students learn about the three branches of government – legislative, executive and judicial. But most people aren’t exposed to the differences between the private sector (business), the public sector (government), and the nonprofit sector (which still has profit though directed toward certain societal purposes unmet by the other two sectors).
The terminology can be confusing. When a private corporation “goes public,” that means that it has stock traded on an exchange the public can purchase – not that it becomes part of the government. One more wrinkle is that there are organizations that straddle the boundaries, like public-private partnerships, as increasingly common ways to tackle problems in communities across the country.
Consider what’s happening in Washington, D.C. The argument that the government should be run “just like a business” rests on three assumptions: that there is no distinctive role for the public sector; that private bureaucracies are always more efficient than public ones; and that every service offered by government agencies would serve us better if placed in private hands. All these assumptions are false.
The public sector exists precisely to handle functions that would not normally be part of the private sector. Why? So that the concern for the profit margin is moved out of the picture. At a more basic level, the governmental sector is based on the idea of “public goods.” Public goods are benefits to communities and society thought to be important – part of the “general welfare” – again, insulated from pressure for profit.
There are many examples of public goods, and these are relevant to the severe federal budget cuts and mass firings today. Should a park be managed well? Of course. Should it be required to make a profit? No. Are certain services, like fire and police departments, important to be maintained regardless of economic ups and downs? Absolutely. Part of the mission of the U.S. Postal Service is to deliver mail to everyone even though service to remote locations isn’t profitable.
A key point that’s often lost: Public service providers do not get to choose those that they serve; they serve all the people. Business CEOs are not bound by the same requirement, and they can take risks that the government cannot afford to do.
Public goods, such as parks, water and sewer systems, museums, libraries, schools, health departments, emergency assistance, military readiness, weather forecasting, disaster response, the justice system, diplomatic missions, agricultural innovation, food safety, medical research, roads and bridges, major power projects, teacher training, national monuments, air traffic control, multiuse land management, railroads, farm crop supports, cybersecurity and an array of social services – are things we agree upon as essential and to be supported – no matter who’s in office or which party is in power.
Today, if you turned on your water tap, stopped at a traffic light, took your kid to a playground or bought meat with the assurance that it passed inspection, you are a beneficiary of the public sector.
Should public services be provided in the best and most efficient ways possible? For sure. Should agencies cut unnecessary spending? Certainly. Is reform needed? Always – with any institution. But it’s an illusion and a distraction to charge that the government wastes money but that private business does not. Similarly, it’s misguided to say that all public employees are lazy and all private sector employees are hard working.
It’s also wrong to suggest that private business derives no funds from citizens or consumers because businesses lack the power to levy taxes. The generation of profit in the private sector itself relies in huge ways on public goods – like when trucking companies use our roads. Extra costs for materials and services in the private sector are often passed along to consumers. So, it’s complicated.
Right now, let’s step back and look at what we truly want from our society and then make the best decisions we can about providing the public functions we all need and cherish.
George Cheney is a retired communication professor and an independent consultant living in Cortez.
