On The Role of Government

An oft-heard complaint about politicians is "but they've never run a business", or something to that effect. Largely, the complaint is based on the notion that Government is very similar to business.

In so far as any government is bound by the economic realities in which it exists, this is at least partially true. In general, we don't really want our governments to spend the public into debt unnecessarily. (That isn't to say that debt is inherently a bad thing, but rather that incurring long term debt should be connected to some long term asset or objectives - tangibles such as roads or hospitals come to mind as examples where debt is not necessarily an evil thing)

However, business is all about one thing: making money. No business I can think of does not place making a profit at the top of its list of objectives. However, we must also remember that money is fundamentally amoral - it is bound by no particular morality or ethic. From a "purely business" perspective, there is little difference between a pharmaceutical company and an organized crime gang like the Hell's Angels. At the end of the day, both conduct a form of commerce with the objective of making continued profits.

However, government does not exist purely for the purpose of making money - in fact, I think one could argue that we grant the government extraordinary powers with respect to money because government is about a great deal more than just making money.

Government also has significant responsibilities that cannot be reflected on the fiscal balance sheet. Certainly in western countries, we look to government to provide a framework to protect a variety of "public interests". Topics such as public safety come to mind (I should be able to walk down the street without fear of being mugged or assaulted); national defense; and citizen's rights in general.

It is difficult to measure some of those subjects indeed. In Canada, we have made a decision that topics such as education and health care are at least partially held to be part of the government's purview. Education, or health care are extremely expensive, and when looked at in a purely financial sense sound like bad expenses. The ethos in Alberta, for example, has been largely to starve both financially - to insist that they operate on minimalist budgets, and refuse to fund even basic repairs to infrastructure such as school roofs.

The outcomes of public education systems are measured not by the next quarter, but often decades later. Arguably, the early 1990s harvested the fruits of investments in education made in the late '70s and '80s. Meanwhile, today, we are just beginning to witness the effects of dramatic cuts that started to be made in the late 1980s.

But, it's not just about money. That's really what I'm getting at. The society we live in is shaped dramatically by the structures that governments create (or fail to create). We rise and fall on the ability of our governments to look beyond the short term concerns about money. Overemphasis on one area starves another, with inevitable consequences.

As subjects such as poverty should bring to mind, government's success or failure is measured not merely upon the fiscal balance sheet, but people also must respond to the "social balance sheet". Alberta has been going through an economic boom in recent years, and a parsimonious attitude on the part of the provincial government towards the social balance sheet has created a situation where a lot of people are faced with serious challenges just finding shelter and putting food on the table. Sure there are jobs - lots of them, but inflation has driven to cost of food and shelter up significantly for those who do not own their homes (and the threshold for ownership has moved up - way up).

The consequences of that short-sightedness on the part of Ralph Klein's government is being reflected now in plummeting polling numbers for Ed Stelmach, and a certain degree of "jaded cynicism" being expressed towards a recent round of spending announcements. There are other concerns that are attracting public attention as well - people are becoming skeptical that the Oil Sands developments are being appropriately managed, or that adequate resources are being put into place to ensure that the mining operations can be cleaned up.

Whether politicians wish to admit it, they are measured not merely upon the government's finances, but also upon the kind of society that their government (or predecessors' governments) have forged as a result of their actions.