John T Harvey has a new post up at his Forbes blog tackling the familiar trope that government is inefficient and should be run along the line of a business. One version of this argument heard over here goes that we need more MPs with business experience so they understand how a country should be run. Grant Shapps has deployed this argument recently when defending himself against accusations about his former business activities.
Anyway, I really like John’s blog. He writes for a US audience, but his POV is equally relevant over here. Read the whole thing, but here’s an extract:
…the general question still stands: does it make sense to run government like a business? The short answer is no. Bear in mind, first, that “efficiency” in the private sector means profit. Hence, to ask that the government be run like a business is tantamount to asking that the government turn a profit.
…the key issue is this: not everything that is profitable is of social value and not everything of social value is profitable. The proper role of government is the latter. Those arguing for a business model for government must necessarily be ready to shut down all government functions that do not earn a profit, regardless of their contribution to our well being. And, if the public sector is being run properly, that should mean every single one. If it’s profitable, they shouldn’t have been doing it in the first place. There is no need for the government to start a chain of hamburger stands, hardware stores, or coffee shops. Rather, they run child protective services, the National Park Service, and the Air Force. Profit is the realm of business, while unprofitable but socially useful tasks is the responsibility of government.
alittleecon 