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22 2012

Big Government vs Big Business

Syndicated from: Paul Bridle

I am slightly amused at the recent debates and comments about the role of Government in society. Of course in the US it is a major rallying cry to the conservative base and a way to get them excited. However, I want to challenge some of the assertions being made and offer a different angle to this discussion. Just to set the record straight at the outset of this blog, I have traditionally been a champion of less Government and very, very much a champion of free enterprise. So I am not coming at this as some sort of socialist or liberal extremist. I simply want to take an objective look at this, especially in the light of the recent Olympic Games in London. When Republicans accuse Democrats of wanting “Big Government” and Democrats accuse Republicans of “Big Business”, it creates the perception that one is right and the other is wrong. My contention is that there is middle ground that is worth considering. Let me explain…. The Olympic Games is the largest example of Government and Business getting together in partnership to accomplish something that neither could do on their own. In fact it seems that the first private-public partnership started 350 years ago in Boston with the Massachusetts Bay Company and the Private Water Works company, and today the average US city calls on private entities in partnerships to deliver 23 out of the 65 utilities they operate. In fact in modern business the ‘Joint-Venture’ (JV) route is providing the most significant opportunities for growth for many companies….in fact for some it is the only real growth opportunities available to them any more. JV’s are great ways to provide opportunities for investments whilst spreading the risk and even reducing costs. So if JV’s are the significant growth opportunities in the world today, why should not Government not be a JV partner that can add a significant value to a partnership? Besides the obvious partisan cry on both sides….. (“as long as it is my Party in power, then I agree”), there is certainly significant evidence to show that Government has a lot to offer or bring to the table in these partnerships. In contrast, there is also a lot of evidence that a Government totally divesting itself of ownership can also have bad consequences. I could give a number of examples, but let me just use one. The privatisation of the railroad system in the UK under Margaret Thatcher. This has failed in the long term at a number of levels. True….under sole Government ownership it was an embarrassment, but under private ownership it has become an embarrassment in a different way and quickly becoming a national disaster. However, in the same country there is the NATS (National Air Traffic Services) who is in charge of all air traffic over United Kingdom. The Government has a 49% stake and the 51% stake is held by private individuals and employees. This business has been a great success, it has an improving safety record and looking at expanding its expertise outside UK through acquisition. A successful JV between Government and Private Sector. There is increasingly more opportunities for the middle ground to provide meaningful business models that also ensure a balance. I hesitate to say this, but would the banks have got themselves into the mess they (and all of us) are in, if they were 49% or 51% owned by Government and Private enterprise? Obviously there is a lot more to this than my simple comments, but I do feel that the debate being narrowed to “Big Government vs Big Business” is not the basis for a good debate, and is certainly is not helping the situation. It may rally the Party base, but isn’t providing solutions. Lets move away from ‘my idea’ vs ‘your idea’ and find what works in the current world and the world of the future. What worked in the past is not a guarantee that things will work in the future…..and visa-versa. Time for some fresh thinking.

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