America's government can't be run like a business. That's a feature, not a bug.
America's government has lots of problems. Private-market magic is not the solution to them.
Here's a new idea no one has ever proposed before: Let's run the U.S. government more like a private business.
Okay, I kid. Everyone has proposed this. Pretty much every president in recent memory has wanted to reorganize the federal government, cut redundancy and waste, inject competition and market forces, and remake the government into a lean, mean, efficiency machine. Progress does happen — former President Obama created the U.S. Digital Service to help the government better develop technologies, procedures, and systems. But it's rare.
Enter President Trump — who actually does have a long career as a private businessman. If anyone can run the American government like a business, it's Trump ... right?
We'll soon find out. On Monday, he unveiled the White House Office of American Innovation, to be headed by son-in-law Jared Kushner, and tasked with overhauling government while combating "stagnation" and "cost overruns and delay." A lot of the goals sound worthy: Kushner wants to reform Veterans Affairs, spin up big infrastructure projects like providing broadband to every American, find new ways to combat the opioid epidemic, modernize the technology used at federal agencies, and more.
"The government should be run like a great American company," Kushner added. "Our hope is that we can achieve successes and efficiencies for our customers, who are the citizens."
Can Trump and Kushner actually succeed where others failed? Maybe. But first, they need to drop this notion of "running the government like a business."
Government isn't like a private business and will never be like a private business. By definition, it does not face competitors, nor it does need to make a profit. In fact, offering an alternative to the profit-driven private markets is half the point of government.
American citizens aren't the government's "customers." They're more like the government's employer, deciding what projects they want done through democratic dialogue and then delegating that job to some part of government. And since the federal government controls the currency, and can ultimately print money to finance its borrowing, it isn't hemmed in by the demands of profit-driven competition. Its only upper limit is the risk of inflation. That allows it to keep spending in a downturn, when private businesses have to tighten their belts or close up shop.
The government's approach has its weaknesses: Without the discipline of competition, cost overruns, redundancies, and bureaucratic sclerosis can set in. Just look at the byzantine and horribly expensive process of government infrastructure. Massive military boondoggles are another classic example.
But the government also has its strengths. Because private businesses are profit driven, they often fail to provide low-income Americans with infrastructure and transit, internet access and broadband, education, mail services, health care, financial services, access to decent food, and lots of other services. Private markets have a terrible time addressing systemic social failures like climate change. And of course, some projects just don't lend themselves to market competition, leading to natural monopolies. Government can step in and plug these holes, or even take over providing these services entirely.
Unfortunately, when we insist the problem is always that government doesn't operate enough like a business, we miss the point that this is a feature, not a bug.
The government obviously has problems. But the lack of private-market magic in its own operations isn't really one of them.
Government's big problems can't necessarily be solved by Kushner's new office, or his apparent interest in public-private partnerships. A lot of the government's problems need solutions that involve reforming Congress or even rewriting parts of the Constitution. But let's be clear: Fixing these problems isn't about making government look more like a business, because that's impossible. Rather, fixing government institutions is about making them work better on their own terms.