Should countries be run like business corporations?

stevev

Ad Honorem
Apr 2017
2,774
Las Vegas, NV USA
#1
There's seems to be greater than usual discontent with government in Europe and the US among other places. Could the corporate model work better and preserve accountability? In this model the CEO is chosen by the Board of Directors who in turn are responsible to the shareholders. For a sovereign state the "shareholders" are the citizens. Rather than getting involved in ideology, the goal is to maximize the quality of life of the citizens. The CEO has broad power within certain reasonable constitutional restrictions to run the government. There is no legislature. Courts work on the basis of the constitution. Local governments can pass ordinances suitable to local needs.
 
Last edited:

Chlodio

Ad Honorem
Aug 2016
3,467
Dispargum
#2
The corporate model actually did contribute to American ideas about government. Some of the 13 colonies started out as business ventures and so were structured like corporations, ie, voters = shareholders, legislature = board of directors, constitution = corporate charter. It's one reason why the US does not have a prime minister and why in the early republic the percentage of citizens who could vote was much higher in the US than in Britain. Unlike in Britain, all (or almost all) citizens of the colonies were shareholders with voting rights. It's why the US has a written Constitution while the UK does not - because corporate charters are always written.

One problem with modern corporate governance is holding the CEO and board of directors accountable. Corporate elections are rarely, if ever, competitive, so there's little opportunity to vote a bad board member or CEO out of office. Elections would have to be competitive.

The only real difference I see between your model and the current model is the absense of a legislature. What is the purpose of the board of directors beyond choosing the CEO? Do they have any supervisory powers over the CEO? Can they fire him or her? If they can, what is the difference between your board of directors and a legislature? If the board of directors exercises all of the functions of a legislature, then we already have the corporate model. I guess a board of directors, being smaller, would operate more efficiently and effectively than a large legislature.

So now it's a question of ownership. Do the citizens feel like they own the country/government if there are only a handful of elected officials? I suspect most of the current discontent people have with government is from a perception that the government is not responsive to the people. Fewer elected officials would probably increase this perception of unresponsiveness. A smaller board is also more likely to be controlled or manipulated by a special interest group than is a large legislature.

The corporate model looks a lot like a dictatorship.
 
Likes: stevev
Sep 2017
109
Pennsylvania
#4
The corporate model actually did contribute to American ideas about government. Some of the 13 colonies started out as business ventures and so were structured like corporations, ie, voters = shareholders, legislature = board of directors, constitution = corporate charter. It's one reason why the US does not have a prime minister and why in the early republic the percentage of citizens who could vote was much higher in the US than in Britain. Unlike in Britain, all (or almost all) citizens of the colonies were shareholders with voting rights. It's why the US has a written Constitution while the UK does not - because corporate charters are always written.
The US is a Federal Republic, specifically one administered by a Representative Democracy. The fact that some of the original 13 Colonies were settled via private financing doesn't mean that the government created during the American Revolution was inspired by or has parallels to any particular corporate model.

The Bi-caramel legislature for instance directly parallels the British Parliamentary model. Similarly corporations are expected to pay their shareholders, while the Federal Government is expected to take money from them. Obviously these are just basic, disconnected points, but I don't really feel like it should be necessary to go into great detail as to why the American (or any other) government bears little resemblance to private enterprise.

The corporate model looks a lot like a dictatorship.
This point I would agree with.
 

stevev

Ad Honorem
Apr 2017
2,774
Las Vegas, NV USA
#5
Thanks for the critique. Rather than put everything in the OP, I have additional thoughts about the issue of responsiveness. There are sophisticated measures of quality of life that can be used for rating the Board. The constitution would guarantee press/media freedom. Every citizen would maintain an electronic rating of the Board: approve/disapprove. It's a standing rating that can be changed at any time. If the Board's rating falls below 50%, it is on probation . The Chair can make a public defense of the Board, replace the CEO, make changes in the board membership, or resign. The defense may be to promise to improve or explain why unpopular decisions are necessary such as raising taxes. If after some reasonable period of time the Board cannot regain a majority level of support it will have to resign and a new Chair elected. Day to day management of the government would be by the deputy CEO or or other high executive.
 
Last edited:

Chlodio

Ad Honorem
Aug 2016
3,467
Dispargum
#6
One criticism of the American corporation is that it is too short-sighted - focused only on the next quarterly earnings report at the expense of the long-term health of the company. Having an instantaneous electronic approval meter would increase this short-sightedness even more. The board would be encouraged to focus only on its approval ratings and not on what actually makes the country succeed. Basically, it would be the corporate equivalent of politicians who only follow the polls, doing only what is popular, not what really needs to be done.
 
May 2017
118
Monterrey
#7
The real issue with most governments and government types is corruption(or basic human behaviour). What I've seen of the corporate world it is quite clear that they'd succumb to corruption pretty much instantly.
 

stevev

Ad Honorem
Apr 2017
2,774
Las Vegas, NV USA
#8
One criticism of the American corporation is that it is too short-sighted - focused only on the next quarterly earnings report at the expense of the long-term health of the company. Having an instantaneous electronic approval meter would increase this short-sightedness even more. The board would be encouraged to focus only on its approval ratings and not on what actually makes the country succeed. Basically, it would be the corporate equivalent of politicians who only follow the polls, doing only what is popular, not what really needs to be done.
Business corporations' goal is to maximize profits. The sovereign corporation's goal is, I believe, to maximize the quality of life of the citizens. If that goal can be achieved with corporate efficiency, why not? Any democratic process has the issue of short sightedness. In parliamentary systems a no confidence vote has immediate consequences. I described a more stretched out process where the Board can defend its position.

The issue I see with existing government is not only shortsightedness, but ideological hangups on the part of candidates that ignore what government should be doing by appealing to people's worst instincts. If quality of life is not the business of government, what is? It entails security, fairness, safety, jobs, educational opportunities , environment protection, access to quality health care, and other things most people say they want.
 
Last edited:

Chlodio

Ad Honorem
Aug 2016
3,467
Dispargum
#9
Business corporations' goal is to maximize profits. The sovereign corporation's goal is, I believe, to maximize the quality of life of the citizens. If that goal can be achieved with corporate efficiency, why not? Any democratic process has the issue of short sightedness. In parliamentary systems a no confidence vote has immediate consequences. I described a more stretched out process where the Board can defend its position.

The issue I see with existing government is not only shortsightedness, but ideological hangups on the part of candidates that ignore what government should be doing by appealing to people's worst instincts. If quality of life is not the business of government, what is? It entails security, fairness, safety, jobs, educational opportunities , environment protection, access to quality health care, and other things most people say they want.
I get that you want to change the goal of the corporation and make 'quality of life' the new currency of how the corporate government is judged or rated.

But your system of instantaneous and constant electronic polling only requires the board to defend its position if its popularity falls below a certain threshold. Then the board only has to defend its position so long as its popularity remains below the threshold. The threshold itself becomes the focus, not 'quality of life.' So the board need only do something quick and easy like cut taxes and its numbers will go up. But you can't keep cutting taxes forever. At some point government has to be paid for. Your system would encourage the governing board to only think about the next short term idea to keep its numbers up. The long-term difficult policy decisions that are inevitably necessary would be put off indefinitely. For example, look at the decline of TV journalism after the networks started focusing on ratings. Or consider the Kardashian Effect - people who are so focused on how many social media likes or clicks they have instead of on quality of content. When the focus becomes ratings or popularity, quality of content or quality of service always declines. Do we want a government that is popular or one that is effective? Because they are rarely the same thing.

Actually, in parliamentary systems, most governments can see a no confidence vote coming in plenty of time to head it off, if they have the political skills and the position to save themselves. No confidence votes are the result of a situation that can't be saved and are already the end of a long, slow political collapse. There's no need to tinker with that process by giving the board time to defend its position.
 
Sep 2017
109
Pennsylvania
#10
One criticism of the American corporation is that it is too short-sighted - focused only on the next quarterly earnings report at the expense of the long-term health of the company. Having an instantaneous electronic approval meter would increase this short-sightedness even more. The board would be encouraged to focus only on its approval ratings and not on what actually makes the country succeed. Basically, it would be the corporate equivalent of politicians who only follow the polls, doing only what is popular, not what really needs to be done.
I think this is accurate. I would add that the more awareness and involvement consumers have in the market the more susceptible it tends to be to panic. I would also say that this trend seems to have bled over into politics over the last two decades, at least in America. IMO that in turn empowers special interest groups to manipulate various aspects of the political agenda simply by being "loud, offensive and scary," hence the increasing radicalization in politics which isn't just restricted to the American political landscape. News media feeds off of that which just makes the situation worse.

Further incentives, or making short-term metrics the focus of the political agenda would just breed reactionary politics and disorder.

The Unincorporated Man, by Dani and Etyan Kollin does a good job of examining how a world governed by corporate interests and methodologies might look although it is a work of fiction, it's might be useful to the OP as one possible example of what this would look like, and how it would be likely to go off the rails.

Even if it didn't I can't really imagine that a Corporate political model would be any better than current political models.