"Government should be run like a business" is one of the dumbest thoughts in contemporary politics.

The notion that passes for conventional wisdom in many circles, and is at the heart of many attacks on state capacity doesn't make any modicum of sense when you think about it.

The purpose of this little diatribe is not to attack the notion that we should want an efficient government and to dismiss blithely the idea that we should respect taxpayer money. However, the notion that the key to cutting government waste is to think about government as a business is a bankrupt notion that provides absolutely no valuable insight for going about actually making government more efficient

First, you are not a “customer” of the government. As a citizen of the country, you’re not merely some patron who can get up and take your business elsewhere — although some childless jet-setting serial entrepreneurs who collect passports from Caribbean Community countries, Cyprus, or Portugal will tell you otherwise. An entire influencer community is dedicated to advancing the notion that we should think of countries precisely this way. For the other 98% of humanity that values things like community, family, culture, and quaint notions like “home,” or the simple fact that this kind of nomadic lifestyle, in pursuit of wealth above all else, would not be available to most people even if they wanted it, we are not “shopping” for our governments.

That all said, the saying that “government should be run like a business” is one of those things that gets casually repeated as if it’s some profound piece of wisdom when you actually try to apply it to real government functions, it completely falls apart.

“Sorry FBI, your response times were too slow and your agents weren’t friendly enough. I’m taking my criminal investigation to FedPol™ — they have a much better Yelp rating and they’re running a 2-for-1 special on witness protection programs this month!”

What are we even talking about here? Government is a public good. Humans have created governments, and thus, civilization, on the idea that if we don’t provision for these public goods — like law enforcement, national defense, education, and protections for the unfortunate and downtrodden — there will be no natural incentives for the market to provide for these things, because the incentive structures are not towards natural cooperation. This insight goes all the way back to Aristotle and is known as the tragedy of the commons.

The misguided notion of government-as-business is part of a large ideological trend: the attempt to force market logic onto every sphere of human activity. We don’t value public parks in our neighborhoods based on their revenue potential, and our goal is not to attract as many visitors to the park as possible, and return as much profit to stakeholders. These kinds of incentive structures work fantastically well in a private business precisely because the incentives are well-aligned towards efficiency: a customer wants a thing, and a business wants to make a profit by providing a thing for a price that is more than it costs to make it. Multiple businesses wanting to sell that same thing have the incentive to focus on reducing costs or providing higher quality to justify higher costs in order to support lower prices while still returning a profit to the owners of the capital. When one business has a monopoly over a thing, we see even in the private business world, much of the incentives to increase quality or reduce costs go away, customer service declines, and we start considering anti-trust action against the company. So the notion that businesses themselves are naturally efficient compared to government is even suspect. Businesses actually tend to become quite inefficient when they achieve total market capture.

In fact, when we try to run government like a business by exporting critical government functions to the private sector, we often find ourselves in a worst-of-all-worlds scenario. Consider the American prison system, where the introduction of private prisons and the profit motive have created disturbing incentives to maintain high incarceration rates rather than reduce crime and rehabilitate offenders. Some private prison contracts even include “occupancy guarantees” — essentially promising the government will imprison enough people to maintain the company’s profit margins. Is this the kind of “business efficiency” we want in government?

Public transit provides another example worth considering. A purely profit-driven approach would suggest cutting service to less-populated or lower-income areas where fare revenue doesn’t cover operating costs. However, this ignores the whole point of public transportation: ensuring that all citizens can access jobs, healthcare, education, and other essential services. The “efficiency” of running fewer buses directly undermines the social purpose of having public transit in the first place.

The same pattern emerges in public education. A “business-minded” approach might suggest eliminating “unprofitable” programs like special education, arts education, or support services for struggling students. After all, these programs are expensive and serve relatively few students. But this completely sets aside the fundamental purpose of public education in the first place: ensuring that every child, regardless of their circumstances or challenges, has access to quality education.

In each of these cases, applying business metrics of success — profit, revenue, cost reduction, customer satisfaction — actively undermines the core public purpose of these government functions. Just as monopolistic businesses become inefficient without competition, government services often operate in domains where competition is impossible or harmful. You can’t comparison shop for clean air or drinking water. You can’t take your business to a competing court system if you don’t like the current one’s rulings. The very notion of applying market logic to these functions reveals a fundamental misunderstanding of why we have government in the first place.

The next time someone suggests that the government should run more like a business, ask them precisely what they mean. Are they suggesting we should seek to profit from imprisoning our citizens? That we should abandon public transit routes to poor neighborhoods because they don’t generate enough revenue? That we should cut special education support for poor parents with children struggling with conditions like autism because these kids represent a low return on investment? What they’re really saying is that they believe market forces should mediate every human interaction — that there’s no room in society for collective action toward common goods that cant be measured on a profit-and-loss statement. This isn’t wisdom. It’s an ideological stance that, if taken to its logical conclusion, would dismantle the very foundations of civil society in pursuit of a fantasy about market efficiency. We don’t need government to be more like a business. We need it to be better at being what it is: the fundamental substrate upon which civilized society is built that ensures universal access to public goods that markets cannot or will not provide.