Why our government's business is our business

There may be few greater contributions we can make to democracy in this country right now than to explain the difference between a democratic government and a business.

Comparing government to a business has become popular among supporters of President Thabo Mbeki. They repeatedly dismiss criticism of both the firing of deputy health minister Nozizwe Madlala-Routledge and the suspension of National Director of Public Prosecutions Vusi Pikoli (and the government’s reluctance to explain why it acted) by insisting that the president is like a company chief executive: he is the boss and is paid to decide, not to tell the people why he decided or to seek their support before deciding.

If we want the boss to do his job, they insist, we need to let him get on with making decisions and should not distract him with constant demands for explanation.

Mbeki’s supporters are not the only people who want us to see the government as a large, country-wide business. The comparison is very popular among many business people and financial press commentators. The problem with our government, they insist, is that it is not run like a business. So, if we want to be governed effectively, we need either to ensure that business people are brought into government or that government officials learn sound business principles.

The problem with all of this is that businesses and democratic governments are very different creatures. And so, if you apply the principles that work in business to government, you are going to land us more deeply in trouble.

All of this was demonstrated a few years ago when SA Breweries chief executive Meyer Kahn was brought in to sort out the police service. Kahn has a brilliant record in business — yet he achieved little or nothing at the police. His business skills turned out to be unsuited for the task of sorting out a key area of government.

Why are business and government so different?

Businesses, by their very nature, deal with some people only. They are not supposed to serve everyone — if they did, they would be charged with running a monopoly. It is, therefore, often necessary for businesses to decide that they want some customers rather than others. No one expects a luxury car manufacturer to find ways of offering its products to people who can’t afford to buy them — or a cheap white-bread maker to come up with a loaf that affluent foodies will love.

Similarly, and more important for this discussion, if we feel particular businesses are not for us, we are meant to be free to choose others which are. If we don’t like the way a company is trying to meet our needs, we do not demand the removal of the chief executive — we go off to find a company that will.

It is this choice that is meant to keep companies serving the society. In theory, at least, companies are forced to give the public what it wants because their clients will desert them and plunge them into bankruptcy if they don’t.

An obvious objection is that this works better in theory and practice because large companies can dominate markets so much that we don’t have much of a choice. This is true. But, in a market system, the answer to this is meant to be more choice, not more say for the public in running the company. Whether or not you believe the market system to be fair, it is meant to meet our needs through choice, not direct public control of decisions.

A government, on the other hand, governs everyone: there is no recorded instance of a government refusing to govern people in its area of control. Very occasionally, governments might give up control of parts of their territory, so allowing those who live there to be governed by someone else. But, as long as you or I remain in the territory of a particular government, it will insist on governing us.

This does not mean that it will try to govern us well — or that it will care about us. It might oppress us or ignore our needs. But it will not refuse to govern us. Nor, obviously, do we have the option of refusing to be governed by the authorities in our area because we would much prefer to be governed by someone else. The only way you can do that is to leave the country. But that is not a way of holding a government to account — it is a way of leaving that job to others. Wherever you live, there will be a government that will insist on governing you, whether you like it or not.

Because we can’t take our business to another government, another method is needed to hold it to account. That method is democracy: if the government is chosen by citizens and is responsible to them, then we can control what it does and ensure that it meets our needs. We can’t do that unless the government continually tells us what it is doing, why it is doing it and allows us to tell it what to do.

Again, this often does not work in practice. But, the more it works, the more the government does what it is meant to do — serve the people and meet our needs. This requires a very different approach to that which is needed for running a business — and poses very different problems to those which face a business.

That is why business people are often not effective in government. Meyer Kahn could refuse to sell products into a market that would not yield profits for his company. He could not refuse to police some areas because the cost-benefit calculations did not add up.

And it is also why Mbeki, and anyone else who governs us, is not a business chief executive, but a servant of the people. And it is also why, instead of letting our government executives get on with the business of deciding, we need to ensure as much as we can that they do only what most citizens want them to do. That is impossible unless they always tell us what they are doing and why they are doing it — and that they respect citizens’ right to tell them to do it differently.

A problem with our current government is not that it does not behave like a business, but that all too often it does. Citizens will get more of what they want from the government not when they let it get on with the job of deciding, but when they get it to accept that its business is our business because it exists only to serve all the people.