Monday, August 6, 2012

Misguided principles of governing

I rented a Hertz car this weekend with “NeverLost” a “sophisticated yet simple system to quickly route you to your destination”.  It was, by far, the most annoying accessory ever.he photo shows a typical display with my car off-roading – the actual view from my window was this one of Interstate 24 --->

NeverLost was always hopelessly lost (calibration, shrugged the Helpful Hertz person).  It further lacked any navigation options to find POIs or to set waypoints.  Advertisements appeared ahead of directions; it refused to allow me to enter instructions if the car was moving.  I suspect that it was secretly recording speed and location information for billing and promotions.

In short, it did everything that I would expect from a corporation intent on minimizing cost and maximizing profits.

I think it’s a metaphor allegory for the whole notion that we should run the country as though it were a business.

This goes beyond the simple notion that things cost less if done by the private sector. 

Experience shows that even that simple maxim is wrong.  Colorado Springs experimented with running the city as though it were a business. The results suggest that contracting services to private firms saves nothing: they must, after all, make a profit. The main benefits were psychic: Proponents don't care if privatizing actually saves the government money, so long as the government is doing less.

Rather, I’d challenge the idea that the best method for governing is to take a business perspective since free-market methods always yield optimal results. 

In part, this is based on observing the less than optimal results that businesses often achieve, as with Hertz’s EverLost.

Evan more, businesses embody processes that are far from fair, efficient, or optimal.  Some are simply corrupt: Barclays appears to have been undermined by it’s traders; StanChart by it’s lawyers.  Others are misguided: Omar Ishrak, Medtronic’s CEO, recently tweeted that we should let patients pick the research teams that create devices for their conditions.  Mny persist despite contrary evidence: Force ranking leads to employees focusing on competing with each other rather than competing with other companies.

But most of all, businesses are compete to profitably exploit market segments with limited product offerings, not to be the sole provider delivering broad services to the entire population.  Competitors lie within the system, elected representatives of the other party and special interest lobbyists, not as external providers in the same market niche.  Diplomacy is required rather than negotiation.  Human and environmental factors, long-term rather than quarterly considerations, have to be tallied that don’t reduce to balance-sheet calculations.

I’m not surprised that Mitt Romney is struggling to demonstrate, though his own words and policy proposals, that a business approach to governing is the best approach to governing.  Societies are sprawling, messy, diverse and contradictory.  Navigating by business principals alone  oversimplifies society and mischaracterizes opportunity:  It cannot find the best route towards a fair and just future.

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