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Restoring the Business of Government

One of my favorite quotes from the social critic H. L. Mencken: “Living with a dog is messy like living with an idealist.” The same could be said about democracy living with big business. It’s messy. And the clean-up is a bitch.

In the past few days, a number of newspaper articles and editorials around the Atlanta area have focused on the large engineering firm CH2M Hill and its contracts to run city government and services for three area municipalities: Johns Creek, Milton, and Sandy Springs, some of the first municipalities in the country to have government out-sourced. Out-sourcing government is such a bad idea, so obviously bad that it almost seems pointless to dwell upon it. Right up there with privatizing the running of schools and privatizing military operations around the globe.

The gist of this current spate of articles on CH2M Hill focuses on the refusal of this Denver-based company to reveal much about how much it is expending on items like code enforcement, processing building permits, and general operations. These cities, quite naturally, are asking for some basic financial accountability. And the company, doing what comes naturally to a privately-held corporation, is claiming that its P&L sheet for running a city is proprietary. As Herb Washington, CH2M Hill director of operations for municipal services says: “Even as a partner, we are a private firm. Are we obligated to reveal our profit margin? No more than any other contractor.” Washington’s statement unwittingly captures the essence of the whole bad idea: Open, participatory government cannot be managed by private enterprise that is hardwired to be run by its own internal rules of accountability and narrower self-interests. As my kids would say, “duh.” The issue is not new. The roots of this problem probably date back to an 1886 Supreme Court decision, Santa Clara County v. Southern Pacific Railroad, in which the 14th amendment is interpreted to proclaim corporations as “persons” (see Eric T. Freyfogle, The Land We Share, for a more thorough treatment). In recent years, though, extending corporations Constitutional protections rightfully focused on individual human rights has gotten so far out of control that we now have a governance structure so eviscerated that it could aptly be described as “government of the corporation, by the corporation, for the corporation.” So much for Lincoln’s Gettysburg Address. It will take more than Obama speaking against the backdrop of the Lincoln memorial to set things right. Sheldon Wolin’s brilliant critique in Democracy, Incorporated and Robert Reich’s Supercapitalism should be mandatory reading for any civics class today. So what is to be done? How do we get our various distinct social “tribes” government, business, social organizations, academia, faith-based institutions to focus on what they each do best while also working in concert together to restore our lands and communities? Here are a number of big-ticket suggestions, reforms that would actually suit well successful implementation of the current stimulus package:

· Campaign finance reform, with publicly-funded elections, equal access to public airwaves for free public advertising, etc.

· Overhaul of lobbying regulations, including banning corporate contributions and prohibiting the dizzying cross-overs now occurring between folks taking jobs in government and the private sector.

· Formalizing the principles of the ancient Justinian Public Trust doctrine by developing trusts for our natural capital (see Peter Barnes, Capitalism 3.0).

· Resuscitate the Fairness Doctrine, which for many decades mandated that our broadcast media serve to inform the public, before it was abolished by Reagan in 1988 (see Robert Kennedy, Crimes Against Nature).

· Pass legislation strictly regulating the manner in which corporate support of academic research inhibits the free flow and exchange of ideas, technological development, etc. (see Denise Caruso, Intervention)

· Limiting (if not outright prohibiting) private management of public areas of responsibility such as the running of municipalities like Johns Creek, Milton, and Sandy Springs.

Messy? Yes. Necessary? No question.


Ray Anderson: Oh Captain, Our Captain

Ray Anderson, founder and chairman of Interface, Inc., author of two books on sustainability and a tireless champion for re-inventing business to service the environment, passed away last Monday at the age of 77. Ray was vice-chairman of my company for eight years, a mentor, a guide, and a dear friend. I write this in […] Read More..

In Praise of Late Bloomers

It’s already spring in my hometown of Savannah, GA. Partiers have already blown in and out of town to celebrate a raucous St. Patrick’s day. The tourists are in full swing, enjoying a three-week music festival and the annual tour of homes. And, of course, there’s the early bursting onto the scene of azaleas, the […] Read More..

A Tale of Two Banks

Several hundred billions of dollars in commercial real estate loans are up for expiration in the coming year, with a multiple of that ($1.7 trillion) coming in the ensuing 12 months.. Reports of vulture capital in the $500 billion + range are reportedly poised to pounce on anticipated flea-market pricing. And the question on the […] Read More..

Leveraging Business For Change: It Ain’t About the “Where”

George S. invited me to have coffee with him the other day. George is a young real estate developer in town (Savannah, GA), passionate about strategies to reduce our carbon footprint. He and his wife and two young daughters have been in town about five years. Foremost in his mind, the reason he wanted to […] Read More..

Doing the Scapegoat Thing – Not So Profitably

During the past nine months, virtually every board I serve on has gone through crazy tumult. A few execs have lost their jobs in the process. You could say that each situation is unique, and that these terminations were called for. Perhaps that’s true. But I think there are systemic forces at work that call […] Read More..