Can the Government Operate like a

Business?

Brandon Persaud
213442611
Peter Constantinou
PPAS 2110 Canadian Government
June 20, 2016
 B.Persaud

Thirty years ago, Anglo-American politicians set out to make the

public sector look like the private sector. They decided to grab hold of

the policy-making levels and push public servants to manage

operations along the lines of their private-sector counterparts. (Savore,

2013) The government might not pursue profit, but it does pursue

power. It wants to jolt through bureaucratic hoops and stop you from

bad actions. The nature of bureaucracies is to cultivate in size and

scope, and this is frequently more threatening than amplifying profit.

This betrays a basic misunderstanding of the roles of the private and

public sector. We should no more want the government to be run like a

business than a business to be run like the government. (Harvey,

2013) The government represents the welfare of people collectively.

However, businesses do no operate on the welfare of people

collectively but operate at the bottom line. The main goal of a private

sector organization is to generate profit and all operations are driven

by this profit making mentality. Since the government does not operate

on the bottom line, this can have a negative impact on the welfare of

people. This paper will argue that the Government cannot be operated

like a business. The government vs. the private sector is what compels

the verdict of a government running like a business. It sets up

government and private sector as opposite and opposing forces one

good, one bad rather than two important elements of a

2
 B.Persaud

functioning society and healthy economy. Main goals between the

government and private sector seem to differ more than they are

similar. As the essay will purse to show how a literature review of how

authors are backing why governments should not be run like a

business.

The government-as-business analogy miseducates Canadians on

how their government is supposed to work. However much efficiency

should be prized in certain areas, the government is ultimately not a

business and cannot be run as one. The government is not meant to be

active and efficient. It's meant to secure our rights. (Sabo, 2016) A

government is a group of people that governs a community or entity. It

sets and governs public policy and exercises decision-making, political

and self-governing power through societies, establishments, and laws

within a state. A government can be categorized into many types

democracy, republic, monarchy, aristocracy, and dictatorship are just a

few. Governments are mainly known as the governing body of a nation,

state or community, a government is necessary to the existence of a

civilized society. (Government, Wikipedia) The parliament system of

government is modeled on that of the United Kingdom. The Canadian

government is run as a democratic country. Democracy is government

by the people; a form of government in which the supreme power is

vested in the people and exercised directly by them or by their elected

3
 B.Persaud

agents under a free electoral system. (Democracy, Dictionary.com) In

Canada, the government is mainly focused on representing the people,

as most of the decisions made for the country as a whole are mainly

voted on or a census, not just one person making a final decision and

opinion. On the other hand, we have the private sector. The private

sector is the part of the economy, sometimes referred to as the citizen

sector, which is run by private individuals or groups, usually as a

means of enterprise for profit, and is not controlled by the State, also

known as the part of the national economy that is not under direct

government control. The private sector represents the people that

work for non-government controlled organizations. The government

not being able to control the private sectors allows certain restrictions

that are held on government ran businesss like LCBO to not be held

accountable towards private sector businesses. Thus leading to why I

will explain why the government should not be run like a business.

The problem, in a nutshell, is that not everything that is

beneficial is of social significance and not everything of social

significance is profitable. There are, of course, many businesses that

also make the customers life very unpleasant because simply being in

the private sector does not guarantee effective competition. The

American Medical Association has, for example, argued for years that

very few people actually have much choice when it comes to health

4
 B.Persaud

care. It is a very concentrated industry, meaning that they can demand

payment while giving only a vague idea of coverage (which may well

change over time and with little to no notice) and they can delay

reimbursement. (Harvey, 2012) Harvey goes on to state a few

government ran businesss and private sectors, such as Reality TV,

pornography, fashion, sports, and gambling are all of the questionable

social significance, but each is quite profitable and exists in the private

sector. Meanwhile, few would argue that the Army, Navy, Air Force,

Marine Corps, Coast Guard, police department, fire department,

libraries, parks, and public schools are of no social value, and yet they

could not exist if they were required to be profitable. What Harvey is

saying is true, if the government was needed to run all their entities

and industries as a business than they country would be a corruption.

Imagine if our free resources that are available to keep us protected,

educated and social were needed to gain profits from the work that

offer us for free, then there will be a problem. One reason why the

government should not be run like a business would be the Profit vs.

the People (Online MBA, Blog) A Corporations main goal is to make the

profit, whilst a governments main goal is to provide well for all

citizens. If a government were to gain profits then they would be

storing tax dollars for no good reason. The government would be

letting people down if dont use that money and were not using it to

keep the country running efficiently. The government is a monopoly,

5
 B.Persaud

while businesses operate like a market. Christine Harbin states

businesses face more competitive pressure than government, they

have an incentive to innovate their products, improve their services,

drive down prices, become more efficient, etc. The government doesnt

experience this kind of competitive pressure because it is the sole

provider of its services, so it does not have an incentive to do those

things. The government can afford to deliver sub-par service because it

prohibits other firms from entering the market. (Harbin, 2012) This is

true because the pressure that is put on businesses is totally different

than what is put on the government. Also, Leaders made decisions

differently in businesses and in government. Decisions are made by

consensus in a representational democracy like the Canada. In a

business, the power to make decisions tends to be more centralized.

Decisions are made by a select number of individuals, by polling all of

the employees. Finally, Harbin goes on to talk about the difference in

taxes that would happen if a government ran like a business. She

articulates people are free to decide to patronize businesses

voluntarily, but they are required by law to pay money to the

government. If a person thinks that a price of a good or service is too

high, then she will choose not to pay. If a person thinks that taxes are

too high, it doesn't matter; she is forced to keep paying them or get

thrown in prison. Furthermore, there is a limit to how much a person

will pay for a product. The act of raising prices is not malicious.

6
 B.Persaud

Companies incur costs that they have to cover, and they have

customers whose willingnesss to pay is largely dependent on price. If

a company raises its price too high, then individuals will stop

voluntarily buying its product or service. This means that the company

will not be able to cover its costs, and then it will go out of business.

(Harbin, 2012) If the government were to be run like a business, a lot

of restrictions and laws would be in place, leading to even more

problems. One legitimate argument that can be for why the

government should be run like a business is the government would be

to spend less than it makes. The federal budget has a number of

"unfunded liabilities," including Social Security, federal pensions, which

are preventing positive cash flow. (Sabo, 2016) Unfortunately, when

the positive side of the revenue decreases as it has in the last four

years, the expense side does not. And because many of those liabilities

have the cost of living alterations, they are rising every year.

Shortening those expenses or putting a cap on them would be a great

step towards wealth. This can be also seen as a downfall, because if

the government is needed to make such a huge step in how they

spend their money, then multiple changes will have to make otherwise.

In my opinion, Governments should not be run like a business,

not only because of what the critique, blogs, articles and Internet

sources say. I feel they should not be run like a business because of the

7
 B.Persaud

outcome that would be received if they were to be ran like one and the

result that would happen if they were. Nonetheless, the government

was needed to run all their entities and industries as a business than

they country would be a corruption. Imagine if our free resources that

are available to keep us protected, educated and social were needed to

gain profits from the work that offer us for free, then there will be a

problem. Also, if a government were to gain profits then they would be

storing tax dollars for no good reason. Another reason would be the

government would be letting people down if dont use that money and

were not using it to keep the country running efficiently. Similarly, the

pressure that is put on businesses is totally different than what is put

on the government. Also, Leaders made decisions differently in

businesses and in government. Decisions are made by consensus in a

representational democracy like the Canada. In a business, the power

to make decisions tends to be more centralized. Decisions are made by

a select number of individuals, by polling all of the employees.

Furthermore, if the government were to be run like a business, a lot of

restrictions and laws would be in place, leading to even more

problems. This is not to say that every government agency is actually

performing a useful public service or that it is not wasting resources

(by whatever standard). Nor am I arguing that there are not many

private sector activities that add greatly to our well

8
 B.Persaud

being. The point, however, is that saying that government is inefficient

because it does not turn a profit. (Harvey, 2012)

In conclusion, we should no more want the government to be

run like a business than a business to be run like the government.

(Harvey, 2013) The government represents the welfare of people

collectively. However, businesses do no operate on the welfare of

people collectively but operate at the bottom line. The main goal of a

private sector organization is to generate profit and all operations are

driven by this profit making mentality. Since the government does not

operate on the bottom line, this can have a negative impact on the

welfare of people. From John Harvey to Christine Harbin, multiple

resources back my belief as to why governments should not be run like

a business. The outcome that comes from all these private sector

businesses being run by a business would lead to too much

exploitation and problems aroused from all these changes that would

be needed to be made. The Canadian government is run as a

democratic country. In Canada, the government is mainly focused on

representing the people, as most of the decisions made for the country

as a whole are mainly voted on or a census, not just one person

making a final decision and opinion. On the other hand, we have the

private sector. The private sector is the part of the economy,

sometimes referred to as the citizen sector, which is run by private

9
 B.Persaud

individuals or groups, usually as a means of enterprise for profit, and is

not controlled by the State, also known as the part of the national

economy that is not under direct government control. Multiple authors,

bloggers, and journalists view the government vs. the private sector

differently. Everybody Is entitled to their own opinion, not many would

agree with what they believe, but from what I have researched and

read, I believe that governments ran like a private sector are not

needed. LCBO and Healthcare are government ran business and too

many laws and restrictions are used within them. Personally, the

revenue made by these corporations are not even shown what they are

being used to. Imagine if all businesses and corporations were run like

a business, all tax saving dollars would have to be shown where they

are used. Definitely, it should be used to help provide for the country

better, but that is not promised. Thus, leading to why I believe a

business ran government would not flourish.

10
 B.Persaud

Annotated Bibliography

1. Christine Harbin. Why Government cant be Run like a Business.

Policy Mic. January 16, 2012. https://mic.com/articles/3355/why-
government-can-t-be-run-like-a-business#.4HApwSOF8 Retrieved
27 May, 2016

2. Donald Savore. Running Government like a Business has Been a

Dismal Failure. The Globe and Mail. January 7, 2013.
http://www.theglobeandmail.com/opinion/running-government-
like-a-business-has-been-a-dismal-failure/article6968196/
Retrieved 27 May, 2016

3. Gregory J. Inwood. Understanding Canadian Public

Administration: An introduction to theory and practice. 3rd
edition. Pearson Prentice Hall. Toronto. 2009.

4. John T. Harvey. Why Government Should Not Be Run like a

Business. Forbes. Oct 5, 2012.
http://www.forbes.com/sites/johntharvey/2012/10/05/government
-vs-business/#268301e12685 Retrieved 27 May, 2016

5. Mike Sabo. Government Shouldn't Run Like A Business. the

FEDERALIST. January 8, 2016.
http://thefederalist.com/2016/01/08/government-shouldnt-run-
like-a-business/. Retrieved 27 May, 2016

6. Online MBA. 3 Reasons The Government Shouldnt Be Run Like a

Business. Online MBA Blog.
http://www.onlinemba.com/blog/video-why-government-should-
not-run-like-a-business/ Retrieved 25 May, 2016

7. Public Works. Running Government like a Business. Public

Works PDF. October 2013. http://www.publicworks.org/wp-
content/uploads/2013/10/Public-Works-Running-Government-like-
a-Business_final-format.pdf Retrieved 26 May, 2016

8. R. Murphy. Why Government Doesn'tand Can'tManage

Resources Like a Private Business. Library of Economics and

11
 B.Persaud

Liberty. 2013.
http://econlog.econlib.org/archives/2013/12/robert_murphy_o_3.h
tml Retrieved 26 May, 2016

9. Robert De Neufville. Countries Are Not Like Corporations. Big

Think. 2015.http://bigthink.com/politeia/countries-are-not-like-
corporations Retrieved 26 May, 2016

10. Robert J. Jackson & Doreen Jackson. Canadian Government

and Politics in Transition. 6th edition. Pearson Prentice Hall.
Toronto. 2016.

12