One of the most pernicious attitudes about the nature of political leadership is that running a city, state, or even the whole nation is akin to being the CEO of a company, an attitude shared not only by free market-obsessed right-wingers but also by so-called “Blue Dog” Democrats. On the face of it, the notion sounds great: if you are a good business executive, that ought to translate to being a good political leader. Accordingly, those that subscribe to this viewpoint believe that a corporate mindset will “trim the fat” in government, accelerate the pace of change, improve efficiency, eliminate debt, and better respond to the needs of the electorate.
As the title to this post makes clear, for a number of reasons I think this is utter nonsense. Companies big and small constantly make terrible decisions, some of which result in layoffs, bankruptcy, and in extreme cases–like with the subprime mortgage crisis–a broader crisis in the economy. 80% of entrepreneurial ventures fail (Forbes), 83% of corporate mergers do not “boost shareholder returns,” (Forbes) and there are countless examples of big businesses that fail to respond to market changes (for instance, the Big Three American automakers missed the hybrid bandwagon and fell behind in producing energy-efficient vehicles for many years).
When a corporation makes a bad decision, however, the fallout is just part of a modern economy: businesses succeed and fail; investors profit and lose their investments; and employees lose and gain employment. Aside from extreme examples, these decisions don’t result in widespread economic catastrophe even though they harm employees, investors, and other stakeholders. In stark contrast, a government does not have the luxury of shuttering its doors; even if an economy succumbs to bankruptcy, a government must continue to offer services to its residents lest it fall into anarchy, civil war, death, destruction, and extreme suffering.
Another important distinction is that whereas for profit ventures risk missing opportunities to generate profit if they don’t respond quickly to market changes, governments risk alienating voters and committing grave errors like going to war on a false premise (hello, Iraq) if they fail to debate issues in a sober and rational fashion. The Framers of the Constitution knew this, and they intentionally created a division of powers as a check on autocratic tendencies but also, to paraphrase George Washington, a means of cooling the passions of the public (he was referring to the House of Representatives, which was devised as the “People’s House”). Put another way, when governments move too fast they risk anarchy or despotism; when companies go too slow, they risk losing a competitive advantage. Of course governments can often move too slowly, with harmful ramifications, especially for minority groups and the environment. It is a travesty that it took centuries for the US government to take action on slavery and then vile discrimination; clearly there is a balance to be struck.
Governments and corporations also respond to different stakeholders: a company has to answer to shareholders and, ideally, employees (and, if they are really progressive, to the environment); a government has to answer to the populace, the environment, etc. As a result, whereas a company is expected to seek profit at the expense of other companies and, all too often, the wellbeing of people and the planet, a government is expected to do the greatest good for the greatest number of people. Just think about the mission of each: for a for profit entity, the mission is to maximize profit; for the government, it is to secure life, liberty, and the pursuit of happiness for all.
Neither are corporations magically efficient entities, despite the argument that the free market economy will weed out inefficiency and only the best firms will survive. Consider, for instance, that Medicaid has lower overhead costs than many private insurers, and spending any time at a large business will uncover just as much bureaucracy, waste, and apathy as even the most maligned government agency (e.g., the IRS).
It is true that there are similarities between the two: both have employees, manage inflows and outflows of money, and deliver products and services. But whereas a company’s job ends there, a government engages in these activities in order to levy taxes, wage war, provide security, pass laws that ensure a level playing ground for all, and so on. A government, in other words, is indispensable and irreplaceable save for in the case of a coup d’tat, which entails violent instability; companies come and go, a fact that is actually critical to the functioning of a healthy economy.
Lastly, I see no reason to believe that one skill set translates well into the other. The traits that many CEOs share–bombast, audacity, risk-taking–are ill-suited to the job of mayor, governor, legislator, or president. The last thing we want is a president ready to launch a missile strike at the drop of a hat; one shudders to imagine an impetuous man like Steve Jobs in charge of the nuclear codes! Moreover, a bad CEO can be fired with relative ease, but an elected official can only be removed through a lengthy process of impeachment; as a result, the voters tend to approach elections with caution and care. This isn’t to say that politicians wouldn’t stand to benefit from being less risk-averse and more innovative (they certainly would), but rather that the job descriptions and expectations are fundamentally different.
It’s comforting to think that if only we had a brash president to cut through government waste all our problems would be solved, but it’s never that easy. By design, the Constitution seeks to prevent an overly-powerful executive, meaning that even if it were a good idea, the president cannot be a CEO who is given wide latitude to do what he considers to be best for the nation. The best political leaders know how to build consensus, make the case to the public, and get legislation through Congress. What’s more, they can inspire voters, design programs that are effective and durable, and earn the people’s trust.
This is not to say that presidents can’t come from the private sector, for we are sorely in need of leaders who haven’t spent their adult lives in a political bubble. But we must never assume that by virtue of being an outsider a business leader will make a good political leader. Unfortunately, exasperation with politics-as-usual seems to be behind much of the appeal of Donald Trump; voters often express satisfaction with his willingness to say what he thinks and his business experiences as reasons for supporting him. Alas, the voters have it wrong. To me, the fact that our current crop of politicians is full of corrupt, small-minded, myopic jackasses says more about the need for campaign finance reform than the need for arrogant, egotistical, free-wheeling businessmen.
I’ll conclude by saying that I agree with Bernie Sanders when he says that if we want a political revolution we need to engage millions of people across the country who will force their elected officials to take actions that truly represent their needs. No politician on his own can bring about the sweeping changes needed to make our country and the world a better place; the best he can do is strike a chord with the people and, working in concert with them, help us fulfill the promise of our Declaration of Independence, Constitutions, and the lofty ideals stated therein.
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