Dialectics: Business and Government

In our discussion of Heart of Darkness, we had a brief but heated discussion about how government and business should interact with each other. Mr. Williams suggested what seemed to be the accepted view: the government should act as a "referee," enforcing rules to ensure fair competition among businesses but not becoming a player itself. However, everyone seemed to understand the role of the "referee" differently: Merrick's ideal government would try to compensate for differences in ability to ensure absolute equality; Taylor's would only intervene if things got too rough or major problems arose. My view may be the most extreme: the government should have clearly defined and sharply limited powers with regard to the economy, none of which would let it take the role of a business.

Business and government (particularly democratic government) have very different goals. In business, the goal is the maximization of profit. Those in charge of the business strive to minimize costs and maximize productivity to provide something that people need or want. Success is defined as consistently making a profit. In government, the goal is (ideally) to serve the people of the country, protecting their rights and advancing their interests. People inevitably disagree in defining success for a government, but few people would claim its purpose is to make a profit.

Because their goals are so different, any mixture of business and government is problematic. The economy works best when businesses compete to provide the best goods and services at the lowest prices. When the government intervenes in the economy in the pursuit of some other goal, this competition is distorted--for example, companies may pursue unprofitable paths because they are subsidized by the government. Some would argue that there are instances where such intervention is necessary or desirable in order to achieve more important goal. However, intervention in the economy often has unintended consequences--requiring companies to provide health insurance, for example, helps big businesses at the expense of small ones that cannot afford to do so. Such distortions are inevitable when government tries to intervene in the economy to achieve unrelated goals.

The reverse is also true. History shows that businesses do not by any means make good governments. A key example is the East India Company, which controlled its own private army and conquered territory for itself, independently of the British government. The companies in Heart of Darkness provide another example, with essentially free reign from the Belgian government to control and exploit the Congo. With profit as their only goal, these companies abuse and exploit the native Africans in pursuit of ivory.

This suggests that, in a perfect world, government and business would be entirely separate. Certain specific and limited responsibilities would belong to the government alone; individuals and business would be responsible everything else. In this case, a "synthesis" would lead to something with the worst parts of both.