Government Cannot be Run Like a Business

by Michael Makovi, Guest Writer

We sometimes hear that government is inefficient and wasteful because it is not run like a business. The implication is that if only government were run in a more businesslike manner, its performance would not be so unsatisfactory. In a way, this criticism is true, but not in the way its advocates intend it. Government really would be more efficient if it were run like a business. But the only way to achieve this is through privatization and deregulation. By its constitutional nature, government cannot be run like a business.

In fact, even the most accomplished business person could never run government like a business. If a business person were ever elected or appointed to political office, he or she could not help but execute their office in a typically bureaucratic manner. Only businesses can be operated in a businesslike fashion. There is a fundamental constitutional distinction between government and business, and it is not not the person which makes the office, but it is the office which makes the person. Anyone occupying government office cannot help but behave as a bureaucrat, no matter how accomplished of a business person they might have been previously. The Austrian economist Ludwig von Mises (1881-1973) explained why in a passage worth quoting at length. The following comes from his landmark 1920 article, "Economic Calculation in the Socialist Commonwealth", translated from the original German and reprinted in F. A. Hayek's 1935 collection, Collectivist Economic Planning (https://mises.org/library/collectivist-economic-planning):

A popular slogan affirms that if we think less bureaucratically and more commercially in communal enterprises, they will work just as well as private enterprises. The leading positions must be occupied by merchants, and then income will grow apace. Unfortunately "commercial-mindedness" is not something external, which can be arbitrarily transferred. A merchant's qualities are not the property of a person depending on inborn aptitude, nor are they acquired by studies in a commercial school or by working in a commercial house, or even by having been a business man oneself for some period of time. The entrepreneur's commercial attitude and activity arises from his position in the economic process and is lost with its disappearance. When a successful business man is appointed the manager of a public enterprise, he may still bring with him certain experiences from his previous occupation, and be able to turn them to good account in a routine fashion for some time. Still, with his entry into communal activity he ceases to be a merchant and becomes as much a bureaucrat as any other placeman in the public employ. It is not a knowledge of bookkeeping, of business organization, or of the style of commercial correspondence, or even a dispensation from a commercial high school, which makes the merchant, but his characteristic position in the production process, which allows of the identification of the firm's and his own interests. It is no solution of the problem when Otto Bauer in his most recently published work proposes that the directors of the National Central Bank, on whom leadership in the economic process will be conferred, should be nominated by a Collegium, to which representatives of the teaching staff of the commercial high schools would also belong. Like Plato's philosophers, the directors so appointed may well be the wisest and best of their kind, but they cannot be merchants in their posts as leaders of a socialist society, even if they should have been previously.

Let us parse this passage more closely. "A merchant's qualities are not the property of a person . . . The entrepreneur's commercial attitude and activity arises from his position in the economic process and is lost with its disappearance." It is not the person which makes the office but the office which makes the person. A business person behaves as they do because of the institutional constraints of the position. A business person must satisfy voluntary and willing customers who are free to take their dollars elsewhere. It is the phenomenon of profit and loss which fundamentally shapes the character of the business person's activities. The free-market business enterprise faces no captive market and it can take nothing for granted. Either the firm produces products which willing customers voluntarily purchase, or else it goes bankrupt. The business person behaves as they do because of these institutional constraints, not because of anything peculiar to the person him- or herself. "It is not a knowledge of bookkeeping, of business organization, or of the style of commercial correspondence, or even a dispensation from a commercial high school, which makes the merchant, but his characteristic position in the production process, which allows of the identification of the firm's and his own interests." Therefore, "with his entry into communal activity he ceases to be a merchant and becomes as much a bureaucrat as any other placeman in the public employ."

By contrast, a government bureaucracy possesses a monopoly. Its customers cannot choose whether or not to purchase from the bureau. They have nowhere else to turn. Furthermore, the bureau is subsidized by taxes whether it satisfies customers or not. Compare a car insurance company to the DMV, for example: the insurance company must strive to serve its customers at least as well as its competitors, or else it must compensate for worse service with equivalently lower premiums. If it fails to do so, its customers will all abandon it for its competition. Contrariwise, the DMV has no fear that its "customers" will leave it for another. The citizens have nowhere else to turn to obtain their licenses. And whether the citizens are satisfied or not, the DMV receives its funds from taxation. The DMV is paid whether it does its job or not. Therefore, the DMV has no incentive to operate efficiently or to provide satisfactory customer service. The difference between the insurance firm and the DMV is not that the manager of the one is a better business person than the manager of the other. Rather, the fundamental distinction is the conditions under which each operates. Again, it is not the person which makes the office, but the office which makes the person. Therefore, it will do absolutely no good whatsoever to appoint a proven business person to political office. With the loss of their position in the market system, they lose everything it is that ever made them a business person. "Like Plato's philosophers, the directors so appointed may well be the wisest and best of their kind, but they cannot be merchants in their posts as leaders of a socialist society, even if they should have been previously."

Mises made a similar argument in his 1922 book, Socialism (https://mises.org/library/socialism-economic-and-sociological-analysis) and by now, the reader should be equipped to interpret it without assistance:

If the work of a body of officials appears unsatisfactory, there can be only one explanation: the officials have not had the right training, and future appointments must be made differently. It is therefore proposed that a different training should be required of future candidates. If only the officials of the communal undertaking came with a business training, the undertaking would be more business-like. . . . It is not difficult to expose the fallacies inherent in such notions. The attributes of the business man cannot be divorced from the position of the entrepreneur in the capitalist order. "Business" is not in itself a quality innate in a person; only the qualities of mind and character essential to a business man can be inborn. Still less is it an accomplishment which can be acquired by study, though the knowledge and the accomplishments needed by a business man can be taught and learned. A man does not become a business man by passing some years in commercial training or in a commercial institute, nor by a knowledge of book-keeping and the jargon of commerce, nor by a skill in languages and typing and shorthand. These are things which the clerk requires. But the clerk is not a business man, even though in ordinary speech he may be called a "trained business man."

In summary: if a political candidate ever promises he will run government like a business, do not believe him or her. He or she cannot run government like a business. It is simply impossible. The difference between government and business is the difference between monopoly and competition, between compulsory taxes and voluntarily paid fees. The institutional constraints of the office make all the difference, and the person him- or herself is almost an afterthought. This is not to say that free-market business enterprises are necessarily superior to government bureaus. Perhaps regulation and publicly-owned corporations are necessary. But let us not confuse the matter by believing that the one can be operated on the same basis as the other. Private and public firms operate within totally different contexts and the principles of one cannot be applied to the other. If regulation is necessary, so be it, but let us be frank and admit that insofar as government is necessary, it is precisely because it is not business like and it never can be.

Building a Culture of Caring in Your Classroom

<![endif]-->By Karen LeVasseur, LCSW, owner and therapist at Calm4Kids Therapy Center, LLC

Building Character

Having worked as an elementary school teacher for many years I know the importance of building character in your classroom. I learned over the years that time spent on character education, in particular at the beginning of the school year, was time well spent. Think about it. To engage successfully in academic learning, the following skills need to be in place:

- Emotional regulation

- Problem solving

- Communication

- Teamwork

Students don't always come to school with the skills that they need and it is up to the educator to support kids in learning the "how" of getting through their school day. If you have ever read The First Six Weeks of School by Paula Denton and Roxanne Kriete, you will agree that spending time at the beginning of the school year, setting expectations, modeling and practicing socially acceptable behaviors, establishing a routine for identifying and resolving conflict and solving problems as a team will set up your students for success and allow your classroom to run like a well oiled machine. 

Setting Kids Up For Success

I remember one year, when I taught fifth grade. I was excited for the year, having been in fourth grade for many years. I was eager to dive into the fifth grade curriculum and set up a great academic program for my kids. Unfortunately, the twenty five youngsters in my class were not as excited as I was. The school year started off with problem behaviors, arguments, yelling, teasing... It was not the happy school year I had envisioned. About three weeks in, I brought academics to a screeching halt and put a heavy emphasis on character building. During the next month and a half I started holding a morning meeting each day, used the time right after recess for meditation and created an "Acts of Kindness" Wall. Everything we did academically involved practicing team-building and problem solving skills and assertive communication. By the end of October, my students not only knew what to expect and what to do, they also knew how to do it well. My well oiled machine was achieved!

Morning Meeting

Holding a morning meeting is an important part of your classroom culture. Starting each day as a community, interacting positively with one another is a great way to start off the day on the right foot, for students and for the teacher! There are many different activities you can incorporate into your morning meeting. Be creative and add activities that feel right for you and for your kids. Some ideas include:

Class Pledge- Write a pledge that speaks to the core values you want at work in your class. An example is "I pledge allegiance to my class, that I will try my best, to make good choices and try real hard to be responsible like the rest. I care about the others here and I care about me. I want school to be a special place where I learn and want to be!"

Greetings- One year I taught my students to greet one another using both Spanish and American Sign Language. Students would pair off and say/sign "Good morning, how are you?" The student would respond with "Good morning, I am (happy, mad, tired, sick...). How are you?" The kids loved the bilingual challenge!

Circle of Friends- Ask your students to sit in a circle either on the floor or in chairs. Pose a question such as "How will you be successful today?" or pose a challenge such as "Compliment the person next to you on something nice they did yesterday" and have each student respond. Emphasize active listening skills and use a talking stick if needed.

Problem Solving Box- Set up a box in the classroom with problem sheets that students can fill out indicating the following: I have a problem with... It is a problem because... I have tried to solve it by.... Each morning pull out one problem sheet and read it to the class. Allow the kids to generate possible solutions to the problem. The person who wrote the sheet can remain anonymous or they can identify themselves. Either way, the child with the problem will leave the circle with many new ideas to try!

Minute to Win It- Put kids into pairs and give them a 60 second challenge to complete together. Use riddles, math problems, rebus puzzles or have them complete a physical or building task like on the tv show. Allow the students to be noisy and have fun while they build teamwork skills!

Calm Kids are Productive Kids

I think one of the best decisions I ever made as a teacher was to add meditation to my schedule. I have used the technique at different times of the day but found that right after recess really helped kids to recharge and refocus, allowing success for the second half of the day. The meditation does not have to be long. Even a few minutes of mindfulness to breath and stillness can calm an active or emotionally labile child allowing them to make good choices with their behavior and with peer interaction. Try some of these techniques. I'm sure you will notice a difference in your students' affect as well as your own!

60 Second Vacation- Have the kids lay on the floor or relax in their seats. Ask them to close their eyes and imagine a place where they feel happy, calm and safe. Guide them in using their senses to explore this place, envisioning themselves doing something to be focused, calm and successful. After about 60 seconds of quiet visualization and deep breathing refocus students on the classroom environment and their job as a student.

A Moment of Stillness- Have kids relax as above and guide them in taking slow, deep breaths (belly breaths) filling up their lungs and expanding their abdomen like a balloon on the in breath, then releasing on the out breath. Once a breathing pattern has been established, ask the kids to continue breathing, remaining as still as possible for a minute of meditation. It is helpful to have them imagine sinking into their chair or melting into the floor. When time is up ask the kids to open their eyes and focus on your face (or a point in the room), taking one more cleansing breath.

Breathing Buddies- Students lay on their back on the floor with a small stuffed animal on their bellies. This is called their breathing buddy who helps them learn to take belly breaths as described above. Model for students how to take a belly breath, saying "On the in breath the belly goes out and on the out breath the belly goes in." Guide students in taking slow, deep belly breaths for a few minutes then collect the buddies and get back to work feeling refreshed!

Meditation for Kids

Meditation For Kids: Parents Turn To Mindfulness Practices To Help Children Stay Calm

Being Kind is Cool!

It is helpful to teach kids the importance of being kind and caring toward others. I helped my students learn this valuable lesson by first identifying acts of kindness in literature, providing roleplay scenarios and by inviting the "Note Fairy" to visit my classroom (she secretly leaves notes for students who she witnessed acting kindly toward others). Once the term "Act of Kindness" was well understood and students were regularly engaging in AoK's I set up an "Acts of Kindness" Wall where students could note the kindness of others or post their note from the Note Fairy to celebrate their own success. Each week a different student was honored on the wall with a brief description of how he/she went above and beyond in helping our classroom be a kind and caring environment. Regular celebration of success really helped to motivate kids to be kind to others and to themselves!

Random Acts of Kindness

Welcome | Random Acts of Kindness
Kindness stories, quotes, ideas, classroom resources and more.

Try some of these ideas and please share the wonderful things you do in your classroom! Be creative, have fun and remember, "What you notice will happen more!" Celebrate your students' successes and help them to build the skills they need to be able to add to the culture of caring you have established in your classroom.

Karen LeVasseur is an LCSW and is owner and operator of Calm4Kids Therapy Center, LLC in Bradley Beach, NJ where she offers hypnotherapy, play therapy, EFT, and mindfulness based psychotherapy for clients ages 3 through adult. Karen also has vast experience as a School Counselor, Elementary School Teacher, School Social Worker and School Anti-Bullying Specialist.