- knowing how to oversee expenditure,
- keeping an eye out for fiscal problems,
- an interest in greater efficiency, and elimination of unnecessary red tape,
- being able to manage the interacting finances of numerous sub-systems,
- experience in hiring employees, keeping a firm hold on salaries,
- knowing how legislation affects the business,
- knowing how to use advertising to the benefit of the organization,
- knowing how to develop your product to maximize profitability,
Thursday, August 16, 2018
Does Business Experience Make one Suitable for Public Office?
Frequently, people who feel that money in government is being mismanaged set up a clamor to elect a public official with extensive business experience. Someone with business experience, they claim--and probably sincerely believe--would not mishandle public money as has happened in some recent instance. Well, we have to think about this issue, certainly. But there seems to be overwhelming evidence, after watching a couple of presidents who had business experience in action, that business experience alone is certainly no guarantee that money will be handled competently, or properly.
There are certainly those who would point out that neither of George W. Bush, nor Donald J. Trump was a competent businessman. In order to be fair, when analyzing the relative merits of businessmen versus candidates with other sorts of experience, we should compare a competent businessman, judged by some objective measure of competence.
What does a competent businessman (who wants to run for office) bring to the table? Let's see:
Already, you will begin to see the roots of failure in the training and the conceptual framework of the businessman. Unlike an autonomous business, a government department is a unit in a larger structure, and the income and the expenses, though they certainly have to be managed, cannot be tinkered with with the same latitude as in a business. You can't cheat the customer. I suppose you can, but the customer can vote you out, whereas in business, your custom base can't vote you out of business; you can always wriggle out of trouble, or at the worst, declare bankruptcy.
Part of the problem is that businessmen are trained to view the world and their circumstances in terms of profit and loss, an antagonistic relationship. It's customers versus the business, the business versus competing businesses, the business against the tax man. This world-view makes the delivering of services very difficult, because there is no one who can play the role of the antagonist. But the mindset needs an antagonist, and we see today the administration needlessly antagonizing parties that ought to be allies.
It may make sense to look at those who have headed non-profits as being particularly qualified for public office. A non-profit or charity is faced with the task of delivering as much as possible, using whatever resources are available in a given period of time, and one expects that this is, most of the time, what the government has to do. Then, of course, there is the delicate negotiation with the taxpayer, balancing what services are possible, versus what tax burden is reasonable. A conservative administration would--normally--seek to reduce services, while trying to reduce taxes. A left-leaning administration would--normally--seek to increase services, while urging increased taxes.
Businesses, usually, try to do several things. They try to sell their product or their service for the highest price they can get, without charging a price so high that they lose their customer base. This is accomplished by spreading information about the desirability of their product or service, and attempting to persuade the largest number of people that they need this product! This only makes sense because each sale gives the businessman a little money (because, of course, the product costs a little less to create than the price it is sold for). In a government department, it is often the case that the 'products' actually cost more to create than the public can be charged for, so that the fewer the numbers of members of the public avail themselves of the service or product, the less expense the department has to absorb. A businessman would look at that situation with horror, and insist that the public should be charged enough to break even, or possibly to make a profit. Businessmen urge this sort of behavior frequently, eagerly suggesting that the profit be used to subsidize some other product or service (since obviously, the department cannot keep raking in a profit without causing alarm).
A businessman--whose world, I believe, is really small--can quickly become bewildered when transplanted into government, where the pressures are numerous and complex, and not necessarily adversarial. Because the dynamics of adversarial behavior are thought to be well understood, government has been set up with adversarial relationships, to encourage moderation. A person arriving in the world of government fresh from the battlefields of business is likely to feel comfortable when he or she identifies one of these adversarial relationships. This is not always good; ultimately these relationships which, though adversarial on the surface, are ultimately collegial, and both parties ultimately have to cooperate for the good of the people. In the business world, of course, often this sort of cooperation is forbidden, because it discourages competition, and is recognized as frequently driving up prices.
Most of all, businessmen are eager to have one of their own running for office, because in their simple worlds of cutthroat competition, life is simple, and they hate the more complex world of public service, because it is so alien. They would much rather deal with the known competitor than the unknown bureaucrat. They want someone who speaks their language. They like having someone in office with whom they can deal.Arch