It was one of the rallying cries of the recent election season, and so many others. Government, folks say, should act like a business. Businesses are inherently better and more efficient, and gosh darn it, people like them. That’s one reason Americans hired a “successful” businessman to turn government around. All of this sounds really reasonable, too, if you don’t think too much about the details. Unfortunately, those details are where the proverbial devil resides.
If you believe that the only way businesses stay profitable is by providing something valuable that customers are willing to pay for, it’s easy to overlook the less savory ways that businesses stay afloat. In reality, businesses often profit by shifting costs onto others while pocketing the profits. One way is by pitting cities or states (or even countries) against each other, seeing who will provide the best tax breaks for companies willing to move there. (This means that the people there subsidize the company either by paying more in taxes or by accepting fewer government services, like pothole repair or clean water.)
Another way businesses externalize costs is by manufacturing a product that they sell for profit, but not using a portion of that profit to clean up the mess caused by their manufacturing processes. Eventually the company goes out of business or declares bankruptcy, washing its hands of its moral responsibilities. (Perhaps this is why amorality is a feature, not a bug, to some folks. “Just business, nothing personal” – indeed.) This is why we (used to) have Superfund money to clean up places like the former site of the Velsicol Chemical Company in St. Louis, Michigan. We have the choice to live with toxins left behind (and the health problems they cause), or we can take on the burden of cleaning them up. Although this ends up being a kind of subsidy for polluters, sometimes taking a hit in the pocketbook beats watching your family die of cancer.
Right-leaning politicians also push tort “reform” as another way for companies to externalize costs. When businesses cause injuries due to faulty products or general irresponsibility, they ought to make the sufferers whole again. Even when settlements are won in court, like the Montana asbestos decision handed down this month, the award may be too small to fully address the situation. To act like a business is often to delay, deny, cover up, lobby, litigate, and externalize.
Government agencies like the EPA ought to protect people from corporate abuses. When businesses profit from forcing costs onto others, government should stand in the way. When businesses won’t serve a public need because there’s no profit in doing so, it has been government’s job to step in and serve human needs. For example, elderly people are harder for companies to profitably insure, since people experience more health problems with age. As a result, we have programs like Medicare that are intended to insure the oldest Americans, while leaving the more profitable customers for private insurance companies. The last thing we need, in other words, is for government to act like a business. What we need is for them to serve the people and needs that aren’t profitable enough for businesses to meet.
One of the needs that isn’t profitable is protecting the environment. As Ari Shapiro explained on NPR this week, private companies mining the moon (for example, someday) have different concerns than would governments doing the same thing. For example, companies concentrate on profit and, absent regulation, may ignore environmental costs. Governments serve varying purposes (and masters), so less slavishly pursue profits when citizens’ interests lie elsewhere – at least, in the best scenario. Forcing government to act like a business means compelling prioritization of only one of the nation’s interests: saving money.
When inequality increases and the tax base suffers, the need for government to serve as a buffer has only grown. The political climate in recent years, however, has turned up the volume on cries for government to act like a business. For their part, government often seems willing to comply. In East Lansing, Michigan, the city asked that a lawsuit filed by water treatment workers be thrown out. The workers claim exposure to asbestos and mercury, but the city says they have governmental immunity. If the city knowingly endangered its workers and yet refuses to pay damages, they are deciding to act like a business.
An even higher profile incident occurred in August 2015, when contractors employed by the EPA caused a massive spill at the Gold King mine in Colorado. The results trickled down through the judicial system since then, with the EPA found responsible for the breach. Yet, like East Lansing, the EPA is claiming protection under the Federal Tort Claims Act. They have no plans to reimburse the various people harmed by the contractors’ negligence. Not the river tour guides, not the farmers who watered their crops with arsenic, and certainly not the Navajo Nation.
What adds a dash of amusement to this sordid state of affairs is that the folks over at RedState, the Washington Times, and other conservative outlets are outraged (outraged, I say!) over the failure of government to make people whole again. (Do they expect Trump’s beleaguered EPA not to hide behind tort law?) This is the same demographic that pushes for tort reform to help businesses escape the hardships involved with paying for their mishaps. Upset that government would act like a business after telling them for years that they should act like a business? Be still, my bleeding liberal heart!