When U.S. Society Bites Back

How will the role of business change in the new "post-government" world?

January 1, 2001

How will the role of business change in the new "post-government" world?

Less government is a code word for tax cuts — and who wouldn't want more of those?

Initially, it was Ronald Reagan who launched this campaign. Now, his disciples in the United States can claim full victory.

In essence, this movement has emasculated the function of government in the eyes of the American public. And yet, U.S. corporations — gloating after the November elections — have reason to worry.

Once the address for solutions, "government" is now considered a key source of problems in the United States.

If only, Americans are told, the government would let people get on with business — well then, everybody would be better off and happier.

Other than in matters of war, many Americans have convinced themselves that government is useless.

More and more, it has become understood that government bureaucrats are not really human beings — but some ineffective sub-species at a lower level of evolution.

One wonders, though: Just who will be responsible for solving problems — once government has been taken out of the picture?

The corporate world, having weakened government in pursuit of its own interests, now faces increasing pressure to take on the very same issues.

To be fair, the difficulties of government at many tasks played no small role in changing people's attitudes about the public sector. But businesses are error-prone as well.

Plus, this revolution ignored a key problem.

And that is what is going to come back to haunt the business lobbyists who are now sitting down in earnest to write their fondest dreams into law.

The pesky problem is that people still need all those problems solved — you know, the ones that used to get relegated to the government.

Political thoughts may change, but people's aspirations and expectations don't.

Even if Americans believe that nothing good can come out of Washington, they still want less pollution, decent roads, sound schools, better national parks — and more careful regulation of financial markets.

Even if people don't trust government, they want old people to have income security — especially as they themselves age.

They may view the public sector as incompetent, but somebody needs to do something about dealing with the poor.

Under these circumstances, detractors of government are quick to point to private charity.

But foundations alone — faced with momentous declines in their stock market assets — are not going to get the job done. Their money is but a drop in the proverbial bucket.

Still, the job of providing these services just needs to get done. The trouble with all this fancy footwork is that human aspirations and needs do not really change that much.

This game of hocus pocus cannot go on forever. At some point, the underlying bill is going to come due. Who will cover these obligations, if not government?

Because the Reagan revolution gave center stage to entrepreneurs and to the private sector, they are now — by their own desire — viewed as almost omnipotent.

The stock market boom — and the built-in hero worship of the Jack Welches — solidified that view in the public mind.

Even the recent stock market decline and the corporate scandals do not seem to have shaken Americans' faith in business.

The private sector, Americans are told, is just much better at accomplishing things than the incompetent public sector.

The public has already begun to draw its own conclusions from this thesis. If the private sector is so good — why not expect it to take on the responsibility for what used to be public goods?

Surprisingly, U.S. corporations — along with the children of the Reagan revolution — are actually falling into the trap right now. Privatization in the United States has proceeded to a number of traditionally public areas.

Jails are constructed and operated by private companies. And even public schools are now being run by private companies.

These examples demonstrate, however, not just the opportunity, but also the danger to business that lurks in this turn of events.

The companies that provide public services — like all businesses — are mainly interested in making money.

Businesses view the prospect of taking over government tasks as an important profit-making opportunity.

But before long, corporate leaders will find that the public expects solutions to society's problems even though the tax base — and hence the pool from which businesses can be paid for the services they provide — has shrunk.

That is why they will start to long for the day when strong governments existed to tackle these problems — and corporations only had to cope with regulations and taxes while pursing profits.

Essentially, it's all a big mismatch of the desire for less funding — and the growing expectations of citizens.

That is the logical consequence of the Republicans' present desire to emasculate government.

Business signed on because it wanted no regulation — and wanted to profit from providing services that government used to deliver.

But the clear lesson of the politics of the last 20 years is that U.S. citizens are going to demand results — without necessarily being willing to pay for them.

That perspective should make business leaders very nervous indeed.