The Businessman as Politician

This was originally posted on Live Oaks on January 9, 2009. Comments have not been migrated.

Bill White has been Mayor of Houston since 2004. His biography page on the City of Houston web site states:

He uses business practices every day at City Hall to improve service and get things done.

When he first ran for Mayor, White promised to use his business experience to improve city services. This is not an uncommon tactic for political newcomers, as it presents them as an “outsider” who will bring “common sense” to politics. And this raises several interesting questions–why are voters attracted to a political candidate who brings business experience to the table? How are business practices applied to government?

At one time I found such candidates appealing. I no longer do so, because business practices are incompatible with government.

A business must provide values to its customers, and those customers must purchase those values voluntarily. A business must appeal to the self-interest of its customers–that is, it must provide them with something they want more than the money they currently possess. A business relies on the individual judgment of its customers to recognize the values it offers. A business succeeds by offering a better product, or a cheaper price, or better service, or some other benefit to its customers. It constantly strives for greater efficiency–that is, better use of its resources.

Government–as it is today–is in the business of dispensing favors, of taking from some and giving to others. Government is in the business of dictating and controlling. Government seeks to appeal to the most voters possible, in order to win re-election. Government–as it is today–compels individuals to act contrary to their own judgment.

Most people recognize that a large percentage of government dictates and controls are absurd. Most people recognize that government is not efficient. Most people have a cynical attitude towards government. Simply consult any opinion poll on the matter for evidence.

Business requires the consent of its customers; government operates by coercing its “customers”. Business transactions are voluntary; government “transactions” are mandatory. If a consumer doesn’t like the services offered by a business, he can go elsewhere; if a “consumer” doesn’t like the services offered by government, he can go to jail.

When a politician offers to use business practices in government, I suspect that people perceive that he will reduce waste, increase efficiency, improve “customer” service, and offer the values that “customers” desire. These are the things businesses do to succeed. And while it might sound good to bring such policies to government, it can’t work that way–the service government should provide is fundamentally different from that provided by businesses.

Government is an agent of force. Its every edict, mandate, control, regulation, ordinance, law, or dictate is ultimately backed by force. And if you don’t believe me, try violating one of those edicts, mandates, controls, regulations, ordinances, laws, or dictates and see what happens. Sooner or later, somebody with a gun will show up at your door.

Government’s proper purpose is the protection of individual rights. The only manner in which rights can be objectively violated is through force, and specifically the initiation of force. It is only through the use of force that an individual can be compelled to act contrary to his own judgment. In a free society, the initiation of force is banned, and government holds a legal monopoly on the use of retaliatory force. In other words, while government should not rob, rape, or murder, it should apprehend and punish thieves, rapists, and murderers.

In this context, a businessman cannot bring business practices to government. He cannot change an agent of force into an institution that depends on the voluntary agreement of its “customers”. He cannot allow each individual to choose for himself which services he will support and use, and which he will reject and seek elsewhere. Business and government, in this context, are oil and water–they don’t mix.

The businessman who attempts to make such a reconciliation is caught in an impossible situation. But conventional morality provides him with a ready escape.

Our culture is dominated by altruism–the premise that service to others is the moral. In a superficial way, a businessman might see his activities as altruistic–his products and services are “serving” others. But a business exchange is not altruistic. Each party benefits from the exchange; each party is seeking to improve his situation. Altruism means “other-ism”–placing the needs and interests of others before one’s own. A business exchange is based on the premise that each individual is pursuing his interests. For example, you have food and I have money. I want food and you want money. We make an exchange which benefits both of us. Altruism demands sacrificial service–service that gains nothing for the actor. You give me food because I need it. Business involves the trading of values; altruism involves the renunciation of values.

When a businessman enters politics he no longer depends on, nor requires, the consent of all of his “customers”. He only needs the consent and agreement of enough to get him elected. And those who don’t want to “buy” what he is “selling” have no choice in the matter. They are forced to accept what he offers. Altruism serves as his justification.

No matter how pure and decent his initial motivations, such a man cannot remain pure and decent and wield the power of government (unless he uses his position to repeal laws and increase individual freedom). Every policy and program he advocates and supports involves the use of force. Unless he is repealing laws, his position on every issue involves compelling some individuals to act contrary to their own judgment and against their own values.

This does not mean that a businessman should shun political office. It does mean that the businessman who enters politics should apply the same moral principles to politics as he does in business.

If only implicitly, a successful businessman must act on the principle of rational self-interest. His pursuit of a larger market share and higher profits is in his self-interest. And he achieves his self-interest by recognizing that others are pursuing their mutual self-interest–that is, each party is free to act on his own judgment to mutual benefit. Politically, the principle of self-interest requires that each individual be free to act according to his own judgment, so long as he respects the mutual right of others to do so.

Unfortunately, few businessmen have identified this principle. They do not see the fundamental difference between rational self-interest and altruism. They do not see the fundamental difference between business and government.

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