Eco-Justice Ministries  

Eco-Justice Notes
The E-mail Commentary from Eco-Justice Ministries

Like a Business
distributed 1/6/12 - ©2012

With some frequency, I hear politicians and candidates assert that "We need to run the government more like a business." Indeed, one-time front-runner (and now non-candidate) Herman Cain named his experience as a business executive as a primary qualification for President of the US.

I think the "government like a business" proposition is dangerous and foolish, and needs to be examined. The model of for-profit business is not the way for us to move toward a just and sustainable society.

I'll try to be respectful as I describe the core qualities of modern business, and not use a caricature of money-grubbing, exploitative corporations. I'll also try to be vaguely realistic as I lift up the positive qualities that I see in the extensive realm of non-profit businesses, and how that business sector is a good model for the country and the world.

Try out these ideas as you listen to the campaign rhetoric in 2012. How do the candidates, pundits, and your neighbors envision a government that serves us well? What sort of "business" should our governments be doing? I'll be interested in hearing your thoughts.

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"Business", in everyday conversation, means for-profit business. It refers to that range of enterprises from Main Street to Wall Street, on farms and in factories, where people and corporations sell goods and services with the goal of making money.

Selling a product to make money is the core of what business is about. Right off the bat, that doesn't sound like the role and function of government. But let's look deeper.

A well-managed business will work hard to do the things that are profitable, and to avoid the activities that lose money. The product that they sell must meet some need in the community -- either a real need or a perceived one -- but they don't market their product toward the primary goal of meeting those community needs. The needs provide an opportunity for them to sell. Not every need will provide a good market, so businesses will often decide to leave important needs un-met.

  • A flurry of news stories this week describes dangerous shortages of prescription drugs in the US. In the complex marketplace of pharmaceuticals, several companies have decided to reduce production of their generic drugs, and emphasize their higher-profit brand-name products. There is an urgent public health need, but the goal of a responsible business is not to meet that need. It is to find a profitable way to sell something, even if there is a shortage of needed medicines.

  • You've probably heard the term "food desert", referring to "low-income neighborhoods with high concentrations of people who are far from a grocery store." Providing food to hungry people seems like a good idea, but there are multitudes of communities where it is not profitable for a full-scale store to sell those groceries. "Running things like a business" says that the profit potential of the store is the most rational basis for whether a neighborhood should have easy access to food.

The profit motive works the other way, too. A business that wants to remain strong will find or create "needs" for the sort of products that they can sell. Computer and electronics firms depend on planned obsolescence, an unending string of upgrades and enhancements, and the lure of new technologies to keep us buying, even though what we had two years ago really meets our needs quite adequately. The fashion industry, with ever-changing notions of what is stylish, creates new markets for clothes and accessories, even though our closets are bulging and our budgets are strained.

Enticing us to buy more, to generate more profit for businesses, is a central part of how businesses work. Is that how we want the government to be run? Should government agencies always be looking for new markets and new products that they can offer? It does seem like a strange idea -- especially when that idea comes from those who also stress the need to reduce the size and influence of the government.

Then there is the matter of accountability. The primary responsibility of a business is to meet the expectations of the owners and stockholders. A long-standing legal principle assumes, unless there is some clear direction otherwise, that those investors expect their profits to be maximized.

In recent years, we've seen that some businesses tried to maximize their profits, not by offering worthwhile products, but by trading in bizarre and risky financial schemes. For a while, that served the investors well, so it was "good business" that met the goal of the stockholders. But it is not how we want the country run.

A business is only responsible in a secondary way to its customers and clients. Once products are bought and sold, the business has contractual obligations. Good businesses will try to develop healthy customer relationships. But in the long run, the customers are the means to businesses' primary responsibility: to make money. If the customers want something that will be profitable, it will probably be produced. If they want something that doesn't increase business income -- like a grocery store in a poor neighborhood -- then their desires are not important.

In the business world, those who are not customers are pretty much irrelevant. Prada doesn't care much about the folk who buy their shoes and handbags at discount stores. Charles Schwab isn't interested in the crowds of people who don't have investment funds. And in the world of for-profit business, the desperately poor, future generations and the rest of creation don't matter.

"Business" is about making a profit. In doing so, they may help meet some very important needs, or they may chose not to meet those needs. They may create needs that are profitable but not socially helpful. They are accountable only to a small group of people who have a direct interest in their financial success, may or may not be attentive to their customers and community, and are almost guaranteed to ignore the needs and perspectives of those who have no profit potential.

Do we want government to be "more like a business" in those terms? I don't.

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There is another business sector that operates in very different ways. The non-profit world has different goals and responsibilities, and that model of good business provides a much better framework for strengthening government.

By definition, this sector isn't about making money -- the agencies and charities are not allowed to provide a profit to investors. Rather, their goal is meeting community needs. Non-profit agencies run food banks, provide social services, educate children, operate hospitals and universities, preserve wilderness, nurture the arts and provide countless other services. They do that even if -- maybe especially if -- those services cannot be profitable.

The motivation for non-profit businesses is to identify the most urgent needs, and to do something that will directly meet those needs. There is little incentive to create new needs, and to identify problems that don't exist.

The accountability structure for non-profits looks at whether those needs are being addressed. The community and client base are important participants in making that evaluation, and in holding the agency responsible. While it is not true across the board, the most invisible members of the community -- the poor, the exploited, the future generations, the rest of creation -- can be essential considerations for non-profit projects.

Just like a for-profit business, the non-profit realm needs good leadership, strong ethics, responsible bookkeeping and efficient practices. But those good business practices are applied to meeting community needs, not toward making a profit.

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Most of the goals and structures of the for-profit world contradict what is needed for good government. They distort priorities and don't have good accountability within the community. If we want government to be run more like a business, then I want to look to the non-profit businesses to see how to do that well.


Peter Sawtell
Executive Director
Eco-Justice Ministries

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