9 Reasons Why Business People Are Terrible At Governing

May 12, 2012 By Wendy Gittleson

A couple of weeks ago, someone sent me an email. The gist of it was that Walmart is a wildly successful company, so why don’t we hire them to run the government? Really? Walmart? Then I thought about it for a while. That email represented a very commonly held idea in this country, that a successful business is superior to government. We elect business people to office on the idea that they will run the government in a more cost effective manner than someone without business experience.

Despite years as a public servant, Mitt Romney is running for President on his business credentials, hoping Republican voters forget about his relatively liberal voting record. George Bush touted business acumen, despite being a very bad business man. To many voters that didn’t matter. To them, it’s better to be a bad business man than a good politician.

It’s easy to see why this idea tempts so many. For 30 years, we’ve been told that government is bad. Grover Norquist (father of the Republican “No New Taxes” pledge) famously said that we should reduce government to the size where it can fit in a bathtub so it can be drowned. The idea attracted a lot of people, especially after being told that government is bloated and stealing our hard earned money.

Whenever we turn on the TV, we hear one thing about the government. It is broke. We have an outrageous deficit and a huge debt. Wouldn’t it make sense to hire elect someone who knows how to handle cash?


As tempting as it might be, the answer to that question “No.”

1. Companies are in business for one reason and one reason only…to make money. They are not in business to serve their employees or even their customers. A corporation is legally obligated to put profit above all else. This philosophy typically boils down to making the cheapest product the market will allow (or offering the least amount of service) and selling it at the highest price the market will allow. It’s one thing if your cell phone has a built in life span of six months to two years. It’s quite another for the electrical power grid.

 2. Businesses do not care about their customers. I know. That statement is a little cold. They spend billions in advertising convincing us that they care about us. They truly want us to have clean clothes. They want us to have a clean environment. They want your children to frolic in fields. They sell you that toy just so your child can see you as the hero you are. They want you to be happy. Actually, no where in the corporate charter does it talk about customer happiness or even customer satisfaction. Sure, if a competitor is making their customers happy, there might be some incentive to go in that direction, but ultimately, it’s about the shareholders and only the shareholders. It’s easier and cheaper to improve the marketing than it is to improve the product or service. In other words, it’s fine to sell defective products, as long as they can manipulate a certain percentage of the people into believing they are buying a good product at a good price, their shareholders are happy. If the marketing campaign is really good, they will convince their customers that product defects are normal (as with many electronics) and that they should pay to replace their defective product with the next generation of the very same defective product.

 3. The government is not in the business of turning a profit. Let’s use the post office as an example. Granted, the post office isn’t doing that great right now, but the reason for that is pretty simple. They aren’t charging enough and they were forced to fund their retirement pensions for far longer than any other organization, public or private. But let’s say they were doing well. Let’s say they were profitable. Customers would be screaming. We would want that money back in the form of cheaper postage stamps. In fact, wasn’t that the entire premise behind the Bush tax cuts? The government had a surplus of funds. Bush and the Republicans felt it should go back to the taxpayers.

 4. The government is not in the business of creating demand. By and large, government services are services deemed necessary for our society to function. Businesses spring up every day by creating new demands for new products. Pharmaceutical companies invent illnesses. Clothing manufacturers convince us that we are somehow inferior if we are caught wearing last year’s styles. Governments pick up trash, teach children and put out fires. They have no incentive to have us create more trash, make dumber children or start fires. On the other hand, if those same services were run by business, the more trash they picked up, the more money they would earn. The more work they had to put into educating our children, the more money they would earn. The more fires they had to put out, the more money they would earn.

 5. The cost cutting measures taken by businesses can backfire on the government. Since the age of free trade agreements, one of the most common cost cutting measures has been to outsource jobs. In fact, Mitt Romney’s company taught businesses how to save money by outsourcing. Personally, I’m a little uncomfortable with foreign nationals running the CIA. Say what you will about government employees, at least they pay American payroll taxes.

6. The government is directly accountable to us. Post-Citizens United, this might sound somewhat naive, but we do still hold elections and only the people are eligible to vote. A corporate CEO, on the other hand, is controlled by a small group of people known as the board of directors. If we, the customers, wish to fire our President or Congressperson, all we have to do is show up at the polls (something Americans are notoriously bad at). If we, the customers, wish to fire the CEO of a multinational corporation, well, good luck.

 7. Business people tend to do a very bad job at governing. George W. Bush and Dick Cheney both came from business backgrounds. They left the country in the worst financial shape since the Great Depression. Mitt Romney’s Massachusetts was 47th out of the 50 states for job creation.

 8. Business is by definition, amoral. Morality is not part of the corporate charter. The US Constitution is a moral (not to be confused with religious) document. It is a code of conduct for all government officials. It states that government officials must answer to We the People. If We the People don’t like the Constitution, we can change it. Business people have no such codes of conduct, unless it is to instruct them to not embarrass the corporation and its board of directors. We the Customers have absolutely no input into any such code of conduct.

 9. Finally, businesses can, and do do something that would be unacceptable for the US Government…they go bankrupt.

In all fairness, government runs best when represented by a variety of backgrounds. Business people do have a place in government as do trash collectors, artists and even community organizers. It runs best with a variety of perspectives. It runs best when it is run by We the People.