by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
Government is more than just a concept. Government is people.
For better and for worse, imperfect human beings fill government roles and make government decisions. That is why Federalist 51 asks, “But what is government itself, but the greatest of all reflections on human nature?”
Mitt Romney, the former Massachusetts governor and current candidate for the U.S. Senate from Utah, was lampooned in 2012 when he argued that corporations also reflect human nature. But he was right. When corporations act, the people inside fill corporate roles and make corporate decisions.
Given that people populate (and complicate) the operations of corporations and governments, it may be instructive to examine both, while bringing a third entity, nonprofit organizations, into the mix.
Corporate managers dedicate their efforts to increasing profits because that is their social duty unless the owners decide otherwise. In either case, it is people who make the decisions. Nonprofit organizations do not pay taxes, but they must still make enough money to keep the organization viable over time. Wikipedia founder Jimmy Wales is not a billionaire because of his contribution to the internet, but on the NPR podcast How I Built This, he explained that nonprofits should have robust systems and finances. Unlike some community-based, social service-providing nonprofits that rely heavily on government money, Wikipedia’s parent Wikimedia Foundation had enough cash on to cover four months’ of expenses and more than $90 million in net assets in 2016. Wikipedia’s donors appreciate the solid footing they are providing for the future.
Government is more like nonprofits than corporations because they do not measure their value by their net earnings or profits, which Peter Drucker called simply “the cost of staying in business.” Net assets for nonprofits and reserve accounts maintained by North Carolina state government also represent the cost of staying in business, although they are more a consequence of the organizations’ core function. Liquid assets and reserves mean that the organization can continue without as much need for new revenue or debt.
People make the decisions and carry them out. They are often good people, but they face the challenges of being in a bureaucratic monopoly. Personal relationships are not supposed to affect government services. Everyone is to be equal before the law. Bureaucracy is a response to the demand that all citizens be treated equally by the government, even as government grows in size and scope. Large organizations are inherently bureaucratic, but they develop workarounds to get things done. The need to make money in a competitive market means that most people in business have incentives to make exceptions on rare occasions. Government’s monopoly position removes the monetary incentive, which leaves only the system itself and the people in it.
The entire system is predicated on a lack of trust. Federalist 51 explains,
If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.
American governments were crafted so “Ambition [would] counteract ambition.”
Todd Gaziano and Tommy Berry of the Pacific Legal Foundation explain that ambition sometimes complements ambition. In numerous cases, ambitious politicians can pass laws that delegate authority to ambitious but unaccountable regulators. Even the competition of state and local governments with the national government has given way to cooperative federalism of governments against the private sector.
The manifold division of power and accountability was not meant to eliminate accountability, but to take advantage of what Pope Pius XI later described as the “subsidiary function” or subsidiarity.
Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them.
Most of the people in each level of government, as elsewhere in society, want to do a good job and help others. Government personnel has been asked to accomplish a number of missions by elected officials, who may not provide them with the resources to do everything well. Government is neither a monolithic good nor a monolithic scourge. It is people…for better and for worse.