Why Government Should Not be Run Like a Business, Pt. 2


This is Part 2 of a two-part series on why government should not be run like a business. Find Part 1 of the series here.

By Josh Sager

Police and Prisons

The institutions intended to work to preserve social order, such as the police and prisons, are areas where the profit motive becomes very dangerous to society. When police forces and our legal system become profit-oriented, justice takes a backseat to money. A profit-driven police force will hand out excessive fines and unnecessary charges in order to increase its own bottom line. We have already see this problem in local police departments that are funded by fines; when the police run low on funds, the number of fines as well as the harshness of the fines increases as the police attempt to make up for lost funding. While this is only a minor example, it demonstrates just how dangerous adding the profit motive to the justice systems can become.

Private prisons in the USA are an example of where the profit motive has already taken over a public service. Private prisons are paid by the government to house prisoners just as publicly run prisons do; the major differences are that the private prisons are not legally as culpable for abuses of inmates and that they have an incentive to get more people locked up. As decided by the Supreme Court in the recent Minneci v. Pollard case, inmates in private prisons cannot sue the state or the private prison corporation for abuses suffered in the prison. As all corporations seek to maximize profit and private prisons make money based upon the number of people imprisoned, private prison corporations have lobbied politicians to increase the number of people in prison. The increased penalties for drug use, harsher illegal immigration consequences, and Three Strikes Laws are all examples of how corporate lobbying has led to increased numbers of people imprisoned for a profit. Should anybody feel comfortable that corporations can infiltrate the justice system with their profit motive and make money by imprisoning you, guilty or innocent? Where government is run like a business, money is made at the expense of the people who are least able to defend themselves from abuse.

Free Rider Problems

In addition to the differences in goals between government and corporations, governments must deal with massive free rider problems. Corporations operate on the simple principle that in order to get something, you must pay for it. Governments exist to support and protect all citizens, regardless of whether they can afford to pay taxes. When a government is run like a corporation, the poor and disabled are deemed freeloaders (e.g., reductions to welfare and disability) and cast aside by those in power in order to save money.

Poor and middle class citizens benefit from government programs such as education and law enforcement while in a profit-driven entity, they would be unable to afford such services. Private education and security services are available to those who can pay, but not at the price that we all pay through taxes. It is seen as a moral imperative to provide justice, defense, and some basic services for the poor. Unfortunately, it is very difficult to integrate a moral imperative into a purely amoral profit system, as these systems are based around making money rather than helping society. If profit overshadows equality and fairness as the goal of the government, the poor see their services cut, as they cannot pay for them. The reduction of education and the decrease in support leads to less upward economic mobility and creates a downward spiral.

The Military

In public services such as law enforcement or the military, it is virtually impossible to integrate a profit motive without completely perverting the ideal of the institution. The military protects the country as a whole and should operate on these principles rather than a profit motive. We need only look at Blackwater to see the end result of a for-profit military. For law enforcement, the major ideal is to promote social order, not to make a profit. In addition to the issues already discussed, profitized police forces cannot enforce the law equally where the profit motive overshadows justice. If somebody does not pay taxes because they are poor, the police must still protect them, a situation which demonstrates the textbook definition of the free rider problem -- a problem which is incompatible with the profit motive of businesses.


The next time you hear the term “running government like a business,” you should understand what it entails: reducing costs and services so that the rich no longer need to support the poor and perverting the goals of public institutions to save money rather than providing for society. There is an important reason that government and businesses are separate: governments provide services for society and care little for making money, while businesses exist to make a profit, regardless of whether they fail to take care of those who cannot afford their services. These operating methods and ideologies are fundamentally different and thus should not be combined.

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published this page in Blog 2012-05-22 11:16:20 -0400

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