Senior Trump adviser Jared Kushner declared in an interview last weekend at his West Wing office: “We should have excellence in government. ... The government should be run like a great American company. Our hope is that we can achieve successes and efficiencies for our customers, who are the citizens.”
This assumption is widespread in American politics: that competence in business translates to competence in politics. In 2012, during his presidential campaign, Mitt Romney said he’d like a provision in in the Constitution to “say that the president has to spend at least three years working in business before he could become president of the United States.”
But is there any evidence for this belief? Historians haven’t found any.
I reached out to Gautam Mukunda, a professor at Harvard Business School who works at the intersection of business and politics. I asked Mukunda if business acumen is a useful indicator of political ability, and if it isn’t, why not? I also asked about the conflicting incentive structures in government and business, and why that matters in terms of defining success.
Let me start by reading you a recent quote from Jared Kushner: “We should have excellence in government. ... The government should be run like a great American company. Our hope is that we can achieve successes and efficiencies for our customers, who are the citizens.”
I’m not sure the axiom that business and politics are equivalent can be expressed more clearly than this. What’s your response?
The government should be run as well as a great American company, but that's profoundly different from saying it should be run like a great American company — those are two completely different things.
The first and most obvious problem with that is that American citizens are not customers. Someone has to tell Jared Kushner that citizens are his boss, not his customers. When you've inherited your job, that might be difficult to understand, but it's an important idea.
More broadly, we can separate this into two different things. One is the broader idea of what's the relationship between being good at business and good at government, and the second is the specifics of what the Trump administration is trying to do. As to the first question, it's worth nothing that until Donald Trump, there had never been a president without any political experience. So the category of electing someone with zero political experience did not exist.
But we have a lot of research on the extent to which skills are transferable from one area to another. And when you look at studies within the business world, what you see is that, in fact, skills don't even transport from one company to another. So even if you're working in functionally equivalent jobs in comparable areas, performance at one place doesn't necessarily correlate with performance at another.
If skills don't transport well from, say, one investment bank to another, why would we believe they transport well from business to the completely different environment of government?
Presumably, the lack of transferability within the business world has to do with organizational and cultural differences, but those differences are infinitely greater when you're moving from business to government.
It's almost silly to ask, but the persistence of this trope makes it necessary: What are the essential differences between a company and a country?
It's not that there are no skills in common. If you asked me, would the CEO of a randomly selected, highly successful company do a better job as president than a person you selected at random off the street, I'd say yes. But we don't, the most recent election excepted, select our presidents at random off the street. We select them from a pool of people who have been governors or senators or congresspeople. So that's your comparison set.
Now let's talk about the differences between running a democracy and a company, which are profound. First, there are differences in ends. Companies are supposed to run at a profit. If your government is running at a profit, you have a problem; it’s not an indicator of success. More broadly, almost all companies have a level of authority that flows upward that much more resembles a dictatorship than a democracy.
At the end of the day, a CEO can fire just about anyone who disagrees with him or her, and that's not an uncommon thing to do. Presidents don't have that option. However much Donald Trump wants to fire Chuck Schumer, the people of New York are not going to cooperate. So something as simple as that reveals how profound the differences between government and politics are.
In business, the question of ends [is] far less important. Everybody wants the company to make money, and maybe we want to do that by treating our workers better or maybe we want to make money by treating our workers worse — but we all want to make more money. There's nothing wrong with that — this is the whole point of business.
But the ends of government are far more debated. Is it, for example, the job of the government to provide health insurance for citizens or not? That is not a question of tactics but of objectives, and this is far different than the challenges you face in a boardroom.
You just hit on a crucial point about the "ends" of government. Businesses exist to turn a profit. Countries exist to preserve a way of life, and that way of life has to be perpetually redefined and rearticulated. So a president has to have a vision, and to persuade citizens of the "ends" of that vision. I don't see an equivalent to that in the business world.
You're absolutely right about countries existing to preserve a way of life, but I don't totally agree that there isn't an equivalent to expressing a vision in the business world. What you find is that the best business leaders do precisely that. Steve Jobs, for example, clearly presented an image of Apple that went far beyond the product and the profit motive. He articulated an identity and cultivated a culture.
We often forget that "organization" and "organism" have the same root word. Companies are organizations, and they are living things in a very real way, and living things have spirit and culture and soul, and the best companies have those things.
But this is still profoundly different from the idea of a government. The power of the presidency is the power to persuade. The most dictatorial presidents in American history — Lincoln and FDR, for example — didn't have anything vaguely approaching the power that a weak CEO does in their organization in terms of pure formal authority.
So the president is compelled to inspire and persuade in a way that CEOs are not.
Where does the belief that business skills translate to governing skills come from? Is it just a function of our fetishization of business success?
I think it comes from different things. One is that there's absolutely the fetishization of business success. We have this idea that because a person is rich, they must also be brilliant. If they're self-made rich, there's at least something to that. But if you've inherited the money, like Kushner or Trump, it's preposterous.
There's also this illusion, often called the "halo effect," which is the impression that if someone is good at one thing, they appear to be good at everything. This is a fallacy, of course, but it's part of our psychology.
If you were in that room when Kushner made those comments, what would you have said in response?
I would've asked him a few things. First, why do you think the relationship between government and citizens has anything in common with the relationship between companies and customers?
Second, have you identified specific examples of places where the sort of skills you're describing will be of any help in improving the efficiency of government? Third, have you looked at previous attempts do things like this (like, for instance, when Al Gore tried to "reinvent" government)?
Finally, what is it in your background that should give anyone any confidence that you're the person to do this right? Why should we trust a real estate developer that just got bailed out by a Chinese government–sponsored entity to turn the ship of state around? Why, other than the fact that you're married to the president's daughter, are you in this position at all?