Thursday, May 7, 2020
Corporarion vs Government
The goal and purpose of a corporation is to make a profit and increase shareholder value. To do so they need employees.
The purpse of a goverenment is to protect and serve the best interests of its citizens.
A corporation has employees and a government has citizens. While it is true most employees are citizens not every citizen work for a company. Therein lies an enormous differecen bewtween the two organizations. If a company fears it might lose profit it tends to shed employees. If a merger takes place within an industry the objective is to reduce duplicaiton in tasks which means shedding more employees. When the discharged employee has left and his separation time frame and beneifts are finished the coproariton has no longer any respnichulity nor interst in that particualr employee.
A gobernment can not get rid of
In both instances I could say, based on how well they are run, how organized they are and how completely they respond to me, as a customer, why not call them in the event of an emergency?
I could go on with dozens of examples of stores and companies we visit or buy from that are all so well run they are literal models of efficiency, quality and service. Apple is a great company. Maybe I should call them the next time my house is broken into. Or Google, for example is probably the single most data driven company on earth. They know more about me than even I do. So should I call them in the event I need someone to teach my children or stay with an ailing parent?
What I am getting at is seemingly obvious but there is a point here. Why do so may people believe, even people with an advanced education, that having a business person running the United States is such a good idea? It is something I always hear around election time. So and so is a better potential candidate because they started a business or they have been successful in a business or they have become immorally wealthy because they know how to buy and sell businesses.
In the minds of most Americans there has always been a confluence of business and government as though they are interchangeable, indistinguishable from one another. If they are indistunguishable then a successful person in one is certain to use the same skills and be successful in the other.
I beg to differ and, as always, I like to start at the beginning. What is the point, the purpose, of a corporation and what is the point, the purpose, of a government?
According to the Preamble to the Constitution the purpose of the federal government is to establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare and secure the blessings of liberty to ourselves and our posterity.
According to the Milton Friedman doctrine, for a corporation there is one and only one social responsibility, to use its resources and engage in activities designed to increase profits.
Said differently, they are seen essentially as a vehicle for maximizing the wealth of their shareholders, to maintain the good will with their stakeholders and most most of all, to maximize profits.
Now do those two purposes seem to align? No. To begin with a government has citizens and a corporations has employees. In all cases citizens and employees are the same. Most corporate employees are citizens but not all citizens work for coporations. If a corporation, in pursuit of its primary purpose, needs to reduce expenses they look to what is usually their largest expense, employees, and to increase their profits they do so by reducing their number of employees. Governments, on the other hand, have citizens and cannot get rid of them. All American, as long as they are alive, are citizens and cannot be removed by any means. In a corporation when a citizen applies for a job, he/she must demonstrate qualifications to become an employee. Credentials, schooling, background all count in decisions made for employment. In government there are no entrance exams to be a citizen save for the process immigrants need to go through to be granted citizenship. If you are born here you do no cognitive testing. You are not required to do or to know anything.
Not all citizens begin at the same starting line either. Most have diverse backgrounds some of which are fortunate, others, not so. Stagger the start of any race, give an advantage to one over the other and the outcome is almost set in stone. So too as a citizen. We did not all begin with equal opportunity and have a different road to travel to achieve a level of success.
Look at the org chart of a company. They have production, distribution, marketing, finances, governance and legal. They all adhere to a single mission statement and follow the same guidelines to manifest the corporate mandate. On the other hand a government has 15 different departments, agriculture, energy, interior, state, education, defense, treasury etc. Within each cabinet level department there are many sub departments all with the same goal as defined by the Director. Not all of them are the same because they have different mandates but their overall objective is the security and well being of the citizens of the country. In government research and development, science, education and security are all investments made by most of the departments to plan for the future. Most companies are focused on a 3 month calendar cycle that is required by Wall Street and investing in new products, research, on going education can be expensive and costly when measured against profit goals. They need to be risk adverse.
When a company goes off shore to lower costs they deprive many Americans of those jobs. When they lay off employees by the thousands they leave untold levels of despair in countless families. Yet corporations are referred to as job creators.
When those laid off or terminated and run the course of their severance package they are no longer a problem to the coprpartion. They don't even exist any longer. Corporations don't have to pay attention to the drug use, divorce rate, criminal acts, suicides, homelessness and general malaise that overwhelms the unemployed. But. The goverrnemnt does. The government has to be there at the lowest level of a persons welfare and dignity. The government has to provide resources and incentives to lift people up and get them back into a productive life. When an industry is decimated by new technology such as coal, manufacturing jobs or retail work the government must step in and offer eduction, guidance and hope to those displaced people. The corporations that were most affected by the technical revolution are downsizing as fast as they can. They do not take any responsibility for those who are inducted-ividually left behind. This is where a real government comes into play. Can you imagine a corporate CEO with decades of experience running a profitable business based on eliminating all un necessary costs having the empathy or sensitivity or even the skills to step up and take care of the people left behind?
We currently have a president who ran a small company. I would imagine not one single Fortune 500 company would ever consider donald trump a candidate to run their business yet he was elected to run a vastly different, overwhelmingly larger and more complex organism than any business enterprise and one can see, based on his first three years in office, he clearly knows nothing about running a country. The various agencies have been hollowed out of career professionals. probably a good move for a CEO but for a country? We have political contriubtuots in most of the positions of authoruugty, with no relevant knowledge other than they contributed money to get someone elected. Is that in our best interest
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