Lavoie: Should Carney, the businessman, really run Canada like a business?

One of the better explanations of the difference between business and government:

…Business has one objective that trumps all others: maximizing profit and shareholder return. Shareholders care little if their product serves no noble purpose, nor is the welfare of their workers necessarily a priority. Consumers care little if a company goes bankrupt because of poor decisions – they simply buy elsewhere. And the bad decisions that eventually sink a company may have already generated fortunes for CEOs and shareholders, who often depart before the collapse. 

The government’s goal is providing the institutional framework that allows current and future constituents to enjoy a good quality of life. This means tackling complex, interconnected issues such as poverty, public health, the environment, justice, security and the functioning of markets – not optimizing a single metric. The trade-offs between various government objectives and between current and future generations require careful analysis, consultation, collaboration and compromise.

Governments must be more risk-averse than businesses. Failing to provide Old Age Security, the Canada Pension Plan, public security or law enforcement – or leaving a crushing burden to future generations – would have far more dire societal consequences than a company bankruptcy. Government cannot act without societal acceptance or outside accepted cultural norms, both of which change slowly. This means it will never be as nimble as a business. And that’s a good thing….

Source: Should Carney, the businessman, really run Canada like a business?