Run Government as a Business????

The Atlantic ran a pretty good story on government called, “Government Should Run Like a Business—but Not in the Way You Think.” Eric Schnurer has written a piece that provokes some thought, and got quite a bit of commentary from folks reading the piece online. I bring the comments up because they are a bit discouraging. But more on them later. Schnurer first lays out the case for even making the comparison of government and business, arguing that new delivery models, constant need for innovation, and competition make both government and business continually vulnerable.

At some point, all entities need a demand for their services, to deliver those services at a level of quality that maintains that demand, to respond to innovation and competition by improving them for the times, and to do it with the resources they can command by performing those functions. Any entity that ignores these realities will eventually “go out of business” — whether or not it’s a business.

Schnurer points to many of the failed municipalities as proof of the “going out of business” comparison. I am not sure I am buying into the point entirely, but it is true that failure to adapt, innovate, or become more efficient is a prescription for failure in either case. But government, even in bankruptcy, cannot go out of business.

So what are the business principles that Schnurer thinks are important?

To make government work in the 21st century requires the same basic “business plan” as in any other failing, but potentially still viable, enterprise:

First, resize it to current realities — stop the bleeding, cut the fat, and get the existing operation on stable footing. Then, start thinking about the future — or, more accurately, the present that’s already arrived while the enterprise remained stuck in the past;

Redesign the business, its products, services, and organization, to meet current and future demand — you wouldn’t keep selling buggy whips if people wanted cars. And then,

Redefine and reposition the enterprise to compete effectively against new competitors and in whole new markets.

Right off the bat he steps into the breach, going right to the “resize” issue. I don’t believe Schnurer intends the piece to be a rehashing of the conservative/liberal split on the appropriate size of government, but rather an appeal to “efficiency”. If in fact we are going to spend taxpayer dollars on defense our management should prevent the purchase of $2,000 hammers. He gets to the reality of that later in the piece:

Consider for a moment what is “waste” (and its cousins, “fraud” and “abuse”). Many people apply this term to virtually any government program with which they disagree. For instance, a liberal may view military spending as “waste” while a conservative might think the same of giving money to a homeless person. We’ll use the term “waste” in a different and more precise sense: money that isn’t being spent for its intended purpose. However one feels about defense spending, defense dollars shouldn’t be spent on gold toilet seats, as the National Performance Review under Vice President Al Gore found they were, and whatever one thinks of welfare, welfare dollars shouldn’t be spent on ineligible services, as various federal reviews have found to be the case with as much as 40 percent of Medicaid spending.

He uses the word waste. I prefer efficiency. Call it what you will, it is entirely separate from the policy choices that so divide us as a nation. Before he goes slightly off the tracks, in my opinion, Schnurer gets to the exactly correct point.

That’s because, in turning around a troubled enterprise, the first thing to do is to stop the hemorrhaging. That doesn’t mean you start hacking away at the enterprise indiscriminately, or just blow it up. You want to attack the problem strategically, starting with purely wasteful spending that can be eliminated without hurting operations — in fact, eliminating waste will actually help operations.

That point should be something that we all agree with. Why should anyone prefer to spend governmental money inefficiently? Nominally nobody does. But in reality there is usually a built in, politically strong, opposition to governmental efficiency. Schnurer, after building the case for efficiency, then veers over to the fact that people want more government than they are willing to pay for, and also that a complete elimination of waste would not solve our fiscal problems. Absolutely correct on the latter, probably correct on the former. But is it not discouraging to ask people for higher taxes, even when really needed, when there are glaring examples of governmental waste and profligacy? Schnurer does not get to that, but it is a good piece, with a promise of more to come. I look forward to those.

In the final analysis government is not a business, and strictly speaking cannot be run like one. But sound business principles can be applied to government in order to increase efficiency, and do more with less. As mentioned earlier there are powerful forces arrayed against efficiency in government, and those forces are willing to fight hard against change. And when that fight does come the rules are not generally Marquess of Queensberry. Government at all levels, especially local, have much that can be done today to improve efficiency. From my vantage point I have seen resistance to reform from both left and right, with nobody having a monopoly on virtue. It just depends on whose ox is being gored. Entrenched anti-reform politics is aided by the political divisions within the electorate, with slogans and invective taking the place of governing and reason. When you read the comments at the end of the Schnurer piece you will get that notion firsthand. An efficiency in government article becomes subsumed in a right/left argument. Surprising? No. Disappointing: Absolutely.

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