Daily Archives: October 5, 2003

The Myth of Corporate-Style Governing 1: What It Is

The United Nations produced reports on Iraq regularly from 1998 to 2001. The documents painted a picture of a troubled system and cited the need for improvements, some of which are now being proposed by Mr. Bremer, like the $125 million repair of the Qarmat Ali water plant in the south.

In April, when Vice President Cheney was asked about Iraq’s oil during an appearance before newspaper editors, he cited higher numbers rather than the task force’s more sober findings.

While noting that Iraq’s oil fields were in “bad shape,” Mr. Cheney said, “With some investment we ought to be able to get production back up on the order of 2.5, 3 million barrels a day, within, hopefully by the end of the year.”

“Why can’t they run the government like a business?” is a refrain we’ve been hearing for almost 40 years. The assumption behind the question is that govt is wasteful and inefficient, full of do-nothing bureaucrats and faceless, paper-pushing functionaries whose only goal in life is to waste taxpayer dollars making mountains out of molehills and sows’ ears from silk purses, and who are so incompetent they couldn’t run a lemonade stand and make a profit.

The companion assumption is, of course, that business is govt’s antithesis: a mean, lean machine full of purposeful, competent managers who make every penny count, produce 2.5 times their weight in productivity, and and waste nothing. The thinking (such as it is) comes from the Free Market Fantasy Handbook, which claims that competition (which govt doesn’t have any of) is the lifeblood of efficiency and success, a ruthless taskmaster whose ultimate punishment for wimps and wastoids is bankruptcy and their consequent elimination from the corporate gene-pool.

Nowhere in these assumptions do you run up against the rather obvious notion that the goals of these two institutions are apposite: business exists to make money, and the how or why of it is irrelevant; govt exists to serve and protect its citizens, and the how and why are critical to judging its success: who exactly are they serving, and how? who are they protecting, and how? “Profit” never enters into the equation because it’s not supposed to make one at the expense of its citizens.

So while the comparison may sound compelling at first, if you think about it calmly for 4 or 5 seconds, it quickly becomes clear that it’s not a valid comparison–it’s apples and oranges, or worse: apples and lightbulbs. The trouble, of course, is that we haven’t thought about it calmly at all. We have looked at our tax bills and thought: “My dear god, there has to be a better way.”

I have nothing against the idea of making govt more efficient, and Al Gore’s work during Clinton’s first term showed quite clearly that this can be done and that with a certain amount of application and fortitude, govt can do a better job of providing services and do it less expensively and more quickly than you would have expected or even imagined.

No, my beef is with the oft-expressed mythology around corporate execs in government. That mythology, like all mythology, is based on a stereotypical image that doesn’t hold together very well in the real world. In point of fact, studies have shown that govt provides community services way cheaper than any business could (no profit to make, get it?) and that they’re better at it, too: they serve everybody, not the select few, and–with some notable exceptions of which no one is proud–reasonably equitably.

I’m not going to get into a discussion (yet) of comparing examples of, say, govt-run public school programs with privatized public school programs, or the costs of govt-run public utilities as against those of their privatized cousins, either of which comparison would blast the mythology into little unrecognizable and bleeding pieces. My intent is to talk about the attitudes corporate managers and executives bring with them to govt, attitudes in which they’ve been trained and to which they’ve been committed for years before coming to govt service, and to ask bluntly, “Are these really the qualities we want to see in our government?”

Optimism Kills

It has been said–and I’m not arguing–that corporate figures don’t belong in govt because their inherent greed–the mindset that govt exists to enrich them and their fellow corporate travelers and for no other legitimate reason–inevitably ensnares them in webs of collusion and a narrow-eyed blindness to the differences between the goals of a corporation and the goals of a govt. It has been pointed out that their training in profit-making skews their perceptions of the role of govt by making the bottom line the one and only measure of success–spend less, more success–ignoring completely concepts outside corporate reality, concepts like “social good” and “community goals” which are alien and even antithetical to business goals.

But for the sake of argument, let’s just remove “profit” from the direct mix and move it into the background as a foundarion stone of the attitudes built on it. How do those attitudes play out in the very different world of government?

The answer is, Not very well. And in fact, even inside the corporate world they have their problems. One of the worst of these attitudes is a relentless optimism born from the necessity of believing that formidable obstacles can be overcome despite all apparent evidence to the contrary in order to realize your goals (or those of your company). The line between real hope and hyped-up spin is perilously thin, and it is a line that is crossed daily by marketing and PR depts.

In the days when Enron was riding high, its optimism was so great that it began project after project without bothering to ask the basic question: What’s the downside? Corporate values and beliefs didn’t allow for a downside; even to talk about it was considered traitorous: negativity is betrayal of corporate goals, even corporate reality, when the reigning command structure’s motto is, “We can do ANYTHING!” All “but’s” and “what-if’s” were quickly shuttled to the back of the bus and covered over with red tarps emblazoned with a huge tippy-E while sneering execs threw rotten eggs and squishy tomatoes at them.

If you worked for Enron, the message was impossible to miss: If you think you see a problem, keep it to yourself because we don’t want to hear it and we’ll punish you severely if you make us listen.

A different, less active version of relentless optimism caused IBM and Xerox to turn their backs on the personal computer revolution of the 80’s because they couldn’t believe that some upstart kids working out of a garage could possibly have an effect on the business they held at that time in a stranglehold. Excessive optimism doesn’t just make you greedy and slap-happy, as at Enron; it can also make you blind. IBM and Xerox sniffed and looked down their noses: “Nobody can challenge US,” they said, “and nobody ever will.” Their certainty damn near destroyed them.

Unfortunately, the stakes are much higher in govt than in business. Where business hubris can cost jobs, govt hubris can cost lives. One is bad, but the other is terminal.

If you think back to the days before the war when Administration heavies like Rumsfeld, Wolfowitz and Cheney were making the rounds talking up their rationale for invading Iraq, whenever it was suggested to them that things might not go as smoothly as they thought it would, the most common theme in their responses was: “Don’t be so negative.” Their versions of the future were always relentlessly optimistic: nothing could possibly go wrong, they were absolutely certain of the results of their intelligence (which was coming from Chalabi and his INC, remember), and anybody who said otherwise was a witless, wimpy Cassandra lost in the totally irrelevant land of Viet Nam, which everybody should just forget about as quickly as possible because it had NOTHING in common with Iraq.

We now know that this same blind optimism poisoned their post-war planning, particularly in regard to expecting the oil fields to pay for reconstruction, a scenario they tossed off as blithely and off-handedly as if it were so obvious it didn’t even need to be mentioned. Except it turns out their own experts were telling them otherwise:

The Bush administration’s optimistic statements earlier this year that Iraq’s oil wealth, not American taxpayers, would cover most of the cost of rebuilding Iraq were at odds with a bleaker assessment of a government task force secretly established last fall to study Iraq’s oil industry, according to public records and government officials.The task force, which was based at the Pentagon as part of the planning for the war, produced a book-length report that described the Iraqi oil industry as so badly damaged by a decade of trade embargoes that its production capacity had fallen by more than 25 percent, panel members have said.

With such information in hand, and from their own people, you would think that the Admin would have adapted their post-war plan to deal with the problems that were outlined. But they didn’t. Relentless optimism doesn’t allow for bleak forecasts:

Despite those findings, Deputy Defense Secretary Paul D. Wolfowitz told Congress during the war that “we are dealing with a country that can really finance its own reconstruction, and relatively soon.”Moreover, Vice President Dick Cheney said in April, on the day Baghdad fell, that Iraq’s oil production could hit 3 million barrels a day by the end of the year, even though the task force had determined that Iraq was generating less than 2.4 million barrels a day before the war.

The result of their standard corporate optimism-in-the-face-of-any-obstacle is a chaotic situation which is costing our soldiers their lives and our society a crippling deficit that is bankrupting the economy, both of which might have been avoided–or at least minimized–by realistic planning that took actual facts as its base rather than optimistic fantasies fed by corporate-style cheerleading.

Is relentless optimism in the face of all ration and reason really an attribute we want those running our government to have?