Stephen Monrad

The last few posts have been exploring the idea of non-profit organizations doing the work that for-profit businesses currently do.

In commenting back and forth with Ken G on his blog, I briefly mentioned an analogy I like. For-profit business is similar to for-profit government.

In the past, kings governed their realms on a for-profit basis. They provided law and order and other services and extracted as much as they could in taxes from their subjects. In good times when wars weren’t being fought, kings could extract far more in taxes than they needed to run their kingdom. They pocketed the rest and built themselves fancy castles and palaces.

At the time, I’m sure kings could justify their lavish lifestyle. They would tell themselves that ruling was hard work. Perhaps they believed that they were favored by the gods. They might even convince themselves that they are improving the lot of their subjects because there would be anarchy without their wise rule.

We now know that ruling is just a job like any other. In democratic countries, we elect leaders and pay them more ordinary salaries. They don’t govern perfectly, but they do at least as good a job as kings used to do. The idea that kings were special somehow and deserved huge financial rewards for the work they did has faded over time.

I think that for-profit business is very much like for-profit government. Business owners claim ownership of productive capacity instead of land. They extract as much profit as they can. Instead of providing law and order, they provide things like toothbrushes and beer. Like kings, they try to charge more for what they provide than it costs to produce.

Why is it that we disparage for-profit governments as dictatorships while still accepting for-profit businesses? I think it is because we believe that business owners are special in some way. We believe that we are better off with them than without them. If kings can be replaced by elected governments, however, surely there is another way to set up toothbrush manufacturers without allowing private owners to siphon money out of our pockets.