It should surprise no one that I believe that the success of economies is built on the efforts of the private sector, and that government’s role is to provide oversight to maintain open competition, prevent and detect fraud, and regulate activities to the extent necessary to prevent unfair business practices. Furthermore, I do not believe it is an unfair business practice to be great at competing, developing problem-solving products, services, and technology, or having a business model that serves the customer. Being successful does not typically mean you have an unfair advantage; it usually means you are good at what you do.
As an advocate of the free-market system, I do not believe that the phrase “fair business practices” can be used to describe the broad range of government-provided “free services” that small businesses compete with for customers. There are no free services from the government: They are taxpayer-financed or paid for from the ever-growing national debt.
While some government service programs are providing valuable content to a segment of the business community, for me it is hard to make a case that it is better for such services to be “free” or extremely low cost, while the small business has to pay rent, employees, advertising costs, and taxes to fund government programs!
A small business may be able to give away some aspect of its services, products, etc. as a marketing tool, but it will not survive giving away “the business.” A small business could lower its prices if the costs of doing business were lower. Lowering the cost of doing business includes streamlining regulations to be effective not burdensome, and by reducing the tax burden by limiting the programs to those that are appropriately part of the government role.
Emails from readers around the world indicate that regardless of the country or the governmental system, the private sector loses when it competes with government programs. In the long run we all lose because economic growth, innovation, and infrastructure costs of providing the “free” services are burdens the private sector has to bear in its cost structure. Burdens especially heavy for the small business and start-up entrepreneur.
As the economic, regulatory, and competitive burdens of doing business grow, small businesses have to perform beyond “good” to stay in business. On a “level playing field” that would be part of the expectation of a free enterprise system. However, too often when government is a key player (i.e., provider of goods and services), then the playing field is tilted against private enterprise.
Think of it this way. Governments are the 800-pound gorilla in the room with the power to dictate the terms, prices, conditions, etc. Furthermore, they also do not have the burden of taxation. They have an advantage in promoting products and services directly to prospective customers because they have greater (sometimes unlimited) access to the “prospecting” information and they can frequently dictate the participation in a program by legislation, regulation, terms and conditions of funding. Then they go further and route their “clients” to companies that they “prefer,” in essence picking winners and losers.
Finding, acquiring, keeping and serving the customer becomes increasingly complicated and costly when an organization has to go head-to-head with a government or quasi-government entity who makes the rules. Yet many organizations are successful despite of the conditions and when these turbulent waters and times are overcome. The “winners” are challenged to pay a “fair share” (more) of the costs of government, supporting less successful entities and individuals, and to swim even harder against the currents of government overreach.
It is time for governments, their programs, and their results to be reviewed with a critical eye toward keeping the true role of government in place, effective, and functioning. Defend us, facilitate open and honest competition, monitor and ensure that truly unfair business practices with reasonable, understandable and enforceable rules. But do not pick winners and losers; leave that to the customer and the market. Task the private sector with the role of economic growth, job creation, and innovation. Let us provide the products, services, and technology.
It is well past time for the governmental powers that be to get out of the way and let the entrepreneurial, small business, and corporate organizations be the engine that fuels the world’s economies. We can’t afford to fund our own competition from our own governments any more.
Copyright ©2008 Lea A. Strickland, F.O.C.U.S. Resource, Inc.