A little business sense

Posted: Jun 06, 2004 12:00 AM

We often speak of "the Real World," we who talk about politics. (At least I do.) And we aren't talking about the workings of our government, though our government is All Too Real. No, we're talking about home life, business, trips to Little League and the supermarket ? in other words, the stuff of everyday life, in all its unromantic glory.

Politics, on the other hand, seems to run on a mixture of fantasy and money. Success in politics too often has little to do with the principles of success in "the Real World."

Politics ? like Tolkien's Middle Earth, or the fashion sense of teen-agers ? is another realm entirely.

Now, if the standard-brand fantasies that dominate politics led to good government, we'd just let it go at that. But since government is a mess, and one that boils over into other messes, not a few of us on the sidelines talk a lot about finding ways to inject "the Real World" into politics. We even talk about putting some "business sense" into government.

And there we sometimes get into trouble.

What We Are Not Talking About

The reason most people go "into business" is to make money. That's just fine. Increasing wealth ? for oneself ? is the purpose of business. But one of the nifty things about business is that businesses gain through trade: the way a businessman and his employees get wealthier is by supplying goods that their customers value over other goods, making customers wealthier, too.

But when we talk about politics, the standard ambition to get wealthy doesn't seem quite so noble or practical. For the business of government is not trade. For the most part, government grabs wealth from one group of people and gives it to other ? usually smaller ? groups. It's a lot harder to "build wealth" that way. Unlike business, government is mostly a "zero sum game," with winners and losers. Business is a "positive sum game," where there are winners all 'round.

So when we see politicians getting wealthier, year after year, we've got to wonder: are they practicing good business sense, or merely skimming off the top, like thieves? After all, embezzlers, burglars, grifters and con men can have a "savvy business sense" of a sort. But we don't praise their acumen.

So, with this warning in place ? that government is not a business, and a person hoping to make a living in its employ can do so only at the expense of others ? what kind of business sense makes sense in politics?

Here's a budget of ideas . . .

Less Job Security

Thousands upon thousands of Americans have marched into state employment offices, or logged onto Monster.com, only to endure repeated lectures. It's a new economy, they're told. You no longer can expect to work for one company the whole of your adult life and then retire. Today, fluidity is inevitable, adaptability is key. Even when you find a job, you should still keep looking for the next one, supposedly.

This is not the American Dream of our parents' and grandparents' generations. But it seems to be a reasonable reaction to real-world conditions.

Funny though, it doesn't apply to politicians.

Now, you might think that elected officials have the least security. After all, they have to reapply for their jobs every few years.

Yes, but remember: it's almost impossible to fire them. And while in business there are usually just a few people deciding among many candidates for a job, in politics there are thousands or millions deciding between just a few candidates. This leads to some peculiar results.

In the marketplace, it leads to a competitive and rational selection process. In politics, it leads to a looming, irrational advantage for incumbents.

Though our market doldrums appear to be stirring into renewed life, in government stagnation has set in; our political situation is arguably extending the current recession. What can we do? Don't think just economic policy. Think bigger.

Change the market for politicians. That means, for instance, term limits. Perhaps our representatives would work more for the public interest ? and less for their own ? were limited terms to make sure they had less job security.

Outsource Congress!

According to John Kerry, the president supports the "outsourcing" of American jobs overseas. Kerry says he has a plan to stop this. Mostly, more regulation.

"Outsourcing" may be a dirty word for Kerry, but a few months ago The New York Times noted that some of the Democrats' biggest Silicon Valley donors still say it proudly. Marc Andreessen, the man who made his fortune on Netscape, for instance, has stopped contributing. To him, Kerry is anti-business, and outsourcing is not exporting jobs, it's importing an input. Nothing new, accept that the input is labor and now laborers don't have to teem to American shores. Outsourcing helps some businesses weather tough times. In a fairly short long run, this helps American workers too. Businesses going under don't help workers, that's for sure.

So what is outsourcing? When a company hires out for things traditionally handled in-house, that's outsourcing. It needn't be out of country. A company will outsource even around the corner, if it sees an advantage.

So let's apply the idea to politics. No, I'm not talking about outsourcing Social Security red tape to India (which may or may not make sense; I don't know). I'm talking about the very business of our elected representatives: making law.

In state legislatures around the country ? and in Washington, D.C., for that matter ? our representatives often prove themselves grossly inefficient in deciding some issues.

When that happens, outsource the decision-making process, outsource your legislature. Use the initiative. Let the voters decide.

As my free Common Sense e-letter illuminates, America's legislatures are under-performing, so take off some of their burden, use the initiative and referendum to make and repeal laws that politicians seem congenitally unable to handle. In a fairly short long run, we may all be better off.


Businessmen and workers in the Real World have a stern master: the bottom line. In politics, what passes for a bottom line keeps shifting. Is it the percentage of the vote a politician gets in an election? Is it Gross Domestic Product? Is it the amount of debt they've helped add? Subtract? Multiply? Divide the country?

It's this lack of a certain bottom line that makes politics such a mess. In this environment, some politicians become so irresponsible that treating them like reasonable adults seems almost, well, irrational. So maybe we should consider them as ... commodities.

If so, then let's apply good inventory management. FIFO makes sense to me: first-in, first-out.

Which brings me back to term limits. I often come back to that, I know. But there's a reason. It's an important first step to bringing responsibility back into government.

Later, in that far-flung future when government becomes reasonable and common sense the norm, then maybe we won't talk about government's divorce from The Real World.

We could reserve that distinction, then, for Hollywood.