If Government Were a Business

WARNING! The following is a stream-of-conciousness opinion article that may or may not be easily refuted by facts. It’s a thought experiment more than anything, and if you disagree with it, well you’re perfectly entitled to that opinion. I have done zero research in making this argument and thus if you can credibly debunk it, fair enough.

So, it seems that as a society, we’ve gotten the idea in our heads that government needs a businessman to run it. I forget where I read it the other day, but I saw an op-ed that made the case that, if government isn’t a business, why do we want businessmen to run it?

I know the whole business angle tends to lead to the idea of privatizing everything, with the idea that private enterprise can do it better. This applies to stuff like health care, which up here in Canada is taken for granted as being an essential right and thus something that needs to be available to all. Whether or not the system is well-run (it could use some reform, I just don’t know how exactly that should be done), no Canadian politician who wants to be taken seriously would advocate abolishing Medicare.

(Aside: This patent “reform” that foreign parties want to foist on us could help in getting our costs going sky-high, given it would lengthen the amount of time medical patents apply in Canada, but that’s another story for another day)

In fact, it’s the US health care system that got me to write this thing – someone I know online who requires certain medications to function could get royally screwed over by the system potentially when she gets older, so I figured now’s as good a time as any to articulate this thought experiment.

And said experiment: Let’s assume for a minute here that government IS in fact a business. What does this entail?

Well, for starters, let’s define the scope of this. If government is a business, we need to answer a few questions:

  1. What is the aim of the business/business plan?
  2. What services/products does the business provide?
  3. Who is the target market?
  4. How do customers fund these services?

Well, I guess we can start with question 4, given it’s the obvious one. Namely, taxes and permits. A government makes it’s money that way; we can’t argue with that. That’s how it’s always been done.

So, moving on, let’s look at that fundamental question – what IS the purpose of government? Now, here’s where things understandably get murky, given that different philosophers/ideologists have different conceptions of what government should be in the business of doing. But, fundamentally, I suppose that the role of a government should be to protect people. To allow them to have life, liberty, and the pursuit of happiness.

However, government in this thought experiment is a business, which means the stated goal is to maximize revenue. Now, I’m going to make an unrealistic assumption here for the sake of argument – businesses require competition to be kept in check, by the purest sentiment as seen by libertarians. The whole “invisible hand” thing is supposed to ensure competition and all, according to the theory. But obviously, government has a geographic monopoly based on what territories you live in. So, for the sake of this thought experiment, we’re going to have to assume that location is not an issue – namely, people can pick a “government B” or go with no government at all, and that this is an actual competitive environment and NOT one of a colluding monopoly, like for instance the credit card industry is.

(I know I’m making unrealistic assumptions here, but given the fact that they’re unrealistic is an argument for why government ISN’T a business, I’m gonna have to make them and just go along with it)

So, we’ve established that government is about making money in this case, and more importantly, maximizing the profits for stockholders. But who are these shareholders? Well, we would have to say anyone who has the ability to vote would be a shareholder, which means we have to again make an assumption that we don’t have a direct democracy, but a limited one like the Athenians where the more money you pay in, the more you get out. So stuff like government bonds would essentially become shares, and bondholders would be able to vote.

Now then. We know what Govt, Inc.’s goals are. So now we have to ask – what services would they provide? Well, here’s where stuff gets interesting……

Namely, a government makes revenue by the taxes that people pay into it. Naturally, this means government wants people who are paying into it to make as much money as possible. The standard idea of “maximizing revenues” and all. And given that governments are designed to provide protection of their people, this means that we’re going to have to assume every government has a military of some sort. Which doesn’t come cheap.

But, since you don’t want people to go to another government instead in my assumed rules, you can’t fleece taxpayers. You want them to feel like they’re getting something for their money. And furthermore, if you’re a SMART business, you want to think beyond quarterly reports and ensure consistent revenue streams going forward.

What this amounts to is that you want your taxpayers to be in reasonable health so they can work. If they aren’t working, then that’s one potential customer lost. If you can get people working and keep them working, well, that ensures a continuous revenue stream. And if your government is successful, and people are content, then you will steal taxpayers from other hypothetical governments. Also, you want a means of retention to counter those sorts of sweetheart deals – that being, you want to provide people incentive to actually stick with your government rather than going for the cheap guys.

So. What does this mean?

Well, first, you’re going to want some sort of pay-in program incentive. So that if people who’ve paid in all their life get inevitably old/unable to work, that they know the government will still protect them from others and ensure that their lives don’t drop into the gutter. You know, like some form of pension – you pay in, and long customer loyalty gets rewarded. Think of it as a rewards program of sorts.

Also, you want to keep people working, which means you don’t want them to get sick/injured. Which naturally means that there’s some incentive for you to provide a form of insurance to your customers. But, that’s not all – it’s likely you would want to minimize expenses, and thus come up with a way to ensure as much preventative care as possible to keep costs down. However, you don’t want to force people onto a health regimen, because people don’t want too much meddling with their lives. A balance of this is going to essentially work out to a health care system of some sort. This would probably be some kind of tiered plan, with a level of basic service, simply because that gives more buying power. Heck – some companies might just get whole health care divisions to streamline matters.

On social issues…. well, governments under this system would have incentive to discourage stuff like abortions and such, admittedly. You know, simply due to the fact that more taxpayers = more money. However, there is a balance here because kids mean expenses which means people have less money available to pay in to governments.  Never mind that people again don’t like the government telling them what they can and can’t do with their bodies…. so here, I have a feeling you’d have some governments that allow abortion, with others that don’t. Same with other social things like homosexuality and polygamy – banning it or allowing it could make governments attractive, but I honestly doubt that people would stick with a government if that was the main selling point, and it was otherwise crap. So stuff would balance out in the end, I feel, with some governments being liberal, and others conservative.

However, in the event of crime…. well, different governments would HAVE to form accords re: how crime works, simply because if someone with govt A assaulted someone with govt B, you don’t want it to turn into an incident. Govt A doesn’t want to piss off govt B, and govt B would want retribution of some kind. So odds are the basic criminal/justice systems would work in some kind of way between companies, and a lot of law would get streamlined among the larger ones just to allow for compatibility with processing criminals. Probably some form of, in the end, “commiting a crime against someone with govt B gives govt B leeway to punish you.” Anyone who attempts to operate without one of these accords, well, their days would probably be numbered as a government.

As for military. Well, you would need a security force of some sort to enforce the social contract people are expecting when they pay in to the government. However, you’d need to make sure it wasn’t percieved as abusive or otherwise people wouldn’t want to pay in to your government in a competitive market. A military would also be necessary, as stated above, to protect against more radical factions, but in general I feel that most of these governments wouldn’t have the same need for war among each other given there’s always mergers/buyouts. Never mind that in this thought experiment, given we have businesses here, you can’t force customers into one government or the other. Either way, the cost effective method would likely be instructing your population on combat – kinda like how the Swiss or Israelis do it whereby everyone knows how to fight. That way in the event of conflict, your customers become a potential standing army.

As for the environmental regulation and natural resources…. well, let’s face it. If you’re a government, making money off natural resources inside your area is a no-brainer. So that sort of thing would likely be taxed. However, because most customers of your government will NOT own resources, if you let companies do whatever they want environmentally, people will go to other governments as they’ll see yours as being ill-equipped to protect them. So you get some form of environmental law.

….so, in short. With my thought experiment, I think I’ve got a couple of conclusions here…..

  1. IF government is to be run like a business, in a free market with competition, governments would basically organically evolve into what we already have today, only more streamlined and efficient. You’d have more of them, and the more libertarian/conservative factions would just live by different social rules. Criminal law might have different consequences, but the generally accepted crimes would probably be similar enough between nations. As well, many governments would want to keep the money train going, and thus have progressive preventative social programs designed to create incentive for people to not only buy coverage from the government, but stick with it.
  2. Government is NOT a business. Look at all those assumptions I kept making throughout this thought experiment to make the analogy work. The fact that they are all pretty much unrealistic speaks to the conclusion that government is NOT a business, and thus should NOT Be run like one.
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