"Would it be viable for governments to be run as a business, rather than run by bureaucrats employed by elected leaders?"

In a word, no. The problem is not that the subordinate staff are of bad *character* or incompetent. The problem is that, in the nature of government, officials cannot carry out their tasks without the gross wastage that is characteristic of governmental action.

The purpose of a business is to make profit and avoid loss. Profit is the direct result of the behaviour of the mass of people. It shows that the business has taken things - the factors of production - that the people valued less, and turned them into something that the people value more. Profit shows that the business is satisfying their most urgent wants, as judged by them.

Since profit is privately owned, the owner has an interest in not wasting it. And the entrepreneur can direct the actions of his subordinate managers without having to know all the minute details. It is enough to tell them to seek profit and avoid loss. He can leave the details to their discretion.

But government gets its funds by forcibly confiscating them from the people. Ultimately, if you don’t pay, you will be physically seized and locked in a cage. Those administering the revenue do not have an ownership interest in it. Nor can the chief executive leave the minor details to the discretion of subordinate officers. This is because it is in the interest of each subordinate officer to provide the best service he can, without regard to cost. If decision-making were left to the discretion of subordinate officers, they would very soon empty the treasury.

Therefore to control for this problem, government must specify in detail *how* things are to be done, which cannot be done by profit and loss, but only by rules and regulations. The virtue of the bureaucrat becomes complying with rules and regulations. But as reality is always more complex and changeable than the CEO can know, the only way bureaucracy can cope with reality is by more rules and regulations.

Thus for every bureaucracy, compliance with form and process is necessarily the primary value, and outcomes are secondary.

The problem cannot be solved by appointing a businessman, because he would face the same problem the bureaucrats face. He would just be another bureaucrat.

But there is a more fundamental problem – government is incapable of economic calculation.

Imagine for a moment that government owns all the means of production. There is no private property. Now suppose part of your job as CEO of Australia is to decide how much housing is to be built, made of what. Since government owns all the forests, factories, machines and tools, there is no market for these production goods, these capital goods. As there is no market for them, there are no prices for them.

Okay, so *how* are you going to figure out whether to make houses of wood, or steel, or brick, or plaster? In a market system, you add up the costs *in money prices*, of wood as against steel, of using this labour or that machine, and avoid doing things that are obviously wasteful. You calculate what is more economical or less.

But governments can’t do that. They can only compare quantities directly. They cannot calculate economically. They can only grope in the dark.

Where private property has not been abolished, government can compare prices emanating from the private sphere. But where government has taken over a particular industry, and the more government takes over, the problem of economic calculation is endemic and unavoidable. The result of central planning can only be planned chaos, divisiveness, and the hope of getting something for nothing by force.

Rather than ask, could government be run like a business, we should be asking: what reason is there to think a territorial monopoly of coercion – government – is better at providing services than by way of businesses competing for voluntary custom?

Government through tax and inflation takes over 60 percent of every worker’s income during his life, and then the socialists say we need government to pay for old age pensions and subsidized medicine

There are some parallels already. The government is pretty much run like business with new management practices taken straight out of the pages of the latest economic rationalist strategy manual.

You only have to look at the decline in real services to those who have paid their taxes. And the actions of SES public servants in feathering their own nests,taking executive bonuses just for doing their jobs; while more and more operational staff are trimmed to extinction with huge repercussions to services - very reminiscent of business and CEO behaviour.

The dead wood pretty much went years ago. The only dead wood remaining lies at the top. Next time you read about a budget cut to the APS you will notice the very top-heavy public service will always focus on cuts to delivery or operational staff, rarely at the Senior end of the Service.

In business, a scenario that invites more chiefs than indians would go broke.

However, the public service is not a business and nor should it be. It should be run efficiently with the least amount of money to do the job WELL and to provide the services that people expect (those better managed for the collective interest than for profit) for monies already paid in the form of taxes.

With so many hands begging for a piece of the revenue pie, there needs to be a serious discussion about what it is we expect from governments and what can come from private enterprise.

Do we expect our interests and hobbies to be subsidised by governments (Sport, Art, grants etc) or should we take community and individual responsibility for those aspects of modern life? It is also criminal that we continue the myth of market controlled economies when there is so much corporate welfare being dished out.

It is ironic that we are spending more money on guff stuff and yet lamenting the decline in health, emergency, education, roads,instrastrucutre and other essential services.

For me essential services should be managed by governments and owned by the citizens. Other enterprises are better run by business. But I digress.

Desmond You are not getting away with what you said : - Jeff Kennett sacked very very few public servants and no police officers. The labour Government however has increased public service numbers by 37 per cent. Have you noticed an increase in public service of this magnitude? No of course not! This was a rhetorical question.
Also Desmond Jeff lost only to three independants. A labour stooge in Gippsland, some demented greenie who got only 10 per cent of the primary vote and a disafected ex copper who got rolled last time around. Labour have made the biggest balls up of the state and just wait till it is revealed they have spent all the reserves and we are broke.
Then we will need another jeff Kennett. I was so sorry we lost Jeff and all the rubbish reported after he was gone. As in your silly post Desmond.

Questions whether government can run as a business is first to establish what is profit.
The accounting view looks at taking resources and adding a margin that provides a profit for the shareholder after deducting costs and making provision for investment.
Who are the shareholders in government? The people.
What is profit and loss to them?
It is the delivery of goods and services for the benefit of all of the people.
To achieve this you need an accounting process that includes other issues relating to what else you need hospital/medical, dental services, roads, shipping and rail, transport, security, (i.e. police and legal systems), etc.
A politically neutral public service can do all of this and at the same time be accountable. However, it has become a political tool in the past few decades for the benefit of a few at the expense of the majority.
Some services can be, and should be relatively cost neutral without having a profit. These have already been paid for by the people through taxes or from resources owned by the people e.g. Medical, hospital, education, road and rail, water, gas, electricity etc.
Selling Australia’s assets and resources to third party businesses that shareholder profit for a minority, often overseas and not the Australian people is not sound investment or profitable.
It is a bit like having a business with many divisions that buy and from each division at a profit, so that profit is made on profit. This goes on until the business costs itself out of business.
Government profit may be short or long term via e.g. R&D subsidies. The benefit (profit) is long-term investment by the people in Australia’s future. Are our governments doing this? No or at an extremely limited level.
Funding stimulus programmes that keep businesses and employment going or provide training and education. Are we doing this? Now due to Global issues. Long term? No. We have downgraded or destroyed our industry training and our major industries.
Our Resources? Instead of value adding we are giving them away to other countries instead keeping industry and employment in Australia.

Well, if the question refers to the public being given the same power over government- if not more so- as shareholders/ceos get over their managers and employees- then yes, I agree.

I daresay, if the public had direct, constant input at its own discretion (that is, voluntary voting and citizen-initiated referenda participation) into the pay and employment status of the public servant, and could directly elect and appoint ALL governing bodies and individuals into their respective offices, THEN you can expect real change.

As of now, we have a disjointed method of voting that is SO indirect and inconsequential into the makeup of government the votes make the most miniscule difference and only a minority of voters get any real attention- this is made even worse by compulsory voting, which ensures apathy will remain much more a dominant force in voting.