Government Needs Business

Government Needs Business

At the turn of the last century in NYC, there was an alignment of business and political interests that got things done that seems lacking in today’s political environment. We have a taste of that in NYC with our current Mayor Mike Bloomberg who has brought a business mind to job of governing NYC.

Fred Wilson had a great post a little while back that I copied the above quote from.  Wilson, uses the construction of the NYC subway as an example of a time gone by when great men of business got things done in the public sector too.  It’s a time that allowed things like Gateway Center, Urban Renewal, the Civic Arena, and the first Pittsburgh Airport, and it was a time that I miss.

The problem with the separation of politics and business is that the best people aren’t in politics, they’re in business.  This is due to the simple problem of incentives.  They Mayor is effectively the CEO of 6,000 odd city employees and makes roughly $95,000.  Do you know anyone in business who makes $95,000 to manage a group of 6,000 people?  I’d venture a guess that there is no one in private industry that manages 6,000 people and consistently makes less then $500,000, many make much more.  If you were a best and a brightest, which position would you aspire to?  This is why we don’t end up with the best sane, rational people in charge of city (and really any) government.

There is a benefit to this compensation problem though, the captains of industry in most cities can/will benefit directly from the city improving.  Consequently, many are/would be willing to dedicate much of their valuable time at prices far less than it is worth.  Unfortunately, we live in a society where this is no longer feasible.  In my opinion both the public and the private sectors have moved dangerously away from a system that could help both of them.  The public sector has put up barriers in an effort to avoid upsetting a public that has an enormous (and only partially rational) fear of government being “in bed with business”.  The private sector hasn’t exactly been  knocking down the door to help the city either.

I’m not saying we need to start awarding no-bid contracts or elect a mayor like Bloomberg mayor.  I think we, as Pittsburghers, need to think twice before we allow our blood to curdle over the mingling of business and government.  I think we, as industrialists, need to look at ways we can improve the city beyond paying our taxes and voting.