6) Successful corporations are run by benevolent despots. The CEO of a corporation has the power to manage effectively. He decides company policy, organizes the corporate structure, and allocates resources pretty much as he thinks best. The board of directors ordinarily does nothing more than ratify his moves (or, of course, fire him). This allows a company to act quickly when needed.Read the rest. This is an excellent essay and one whose ideas I wish that our politicians in Washington understood better. But few politicians likes to admit that there is something that they can't do.
But American government was designed by the Founding Fathers to be inefficient, and inefficient it most certainly is. The president is the government's CEO, but except for trivial matters he can't do anything without the permission of two separate, very large committees (the House and Senate) whose members have their own political agendas. Government always has many cooks, which is why the government's broth is so often spoiled.
Wednesday, May 20, 2009
Economic historian, John Steel Gordon lays out why it is a bad idea to have the government run businesses. Polticians make decisions based on politics - which group will benefit, not which decision will be best for a firm. Government is, as Gordon quotes, an "unregulated monopoly." When the government is making plans, it's doing it with other people's money - the taxpayers, not their own. And the results are clear. Our government was purposely designed to be inefficient and slow so as to prevent it from being too despotic. But inefficient decision making is not exactly what we're looking for in a well-run business.