tfp20

"THE FINE PRINT"

The musings of Michael Schrader

CITIZEN AN OWNER, NOT A CUSTOMER, OF GOVERNMENT
(Written February 1996 and published abridged and edited in the newsletter of the Little Rock Public Works Department. Posted in toto with Preface and Epilogue 3 September 2001)

PREFACE -- This was the only column that I wrote between January 1995 and August 1996. At the time that it was written, I was working for the Little Rock Public Works department, which insisted on calling citizens “customers”, much to my personal chagrin and annoyance. This column was written to express my disgust with the term. I never expected it to see the light of day, and fully expected some kind of disciplinary action for my “attitude”; instead, the satire was completely lost by management, and it was published and praised. Employees who knew me enjoyed both the satire of the column and the irony of the satire being completely lost on those who were being satirized. This remains one of my favorite columns, and elements of it were used in later columns.

       In the quest for self-improvement, many governments have “re-invented” themselves as businesses, and have tried to instill a “business mindset” in their employees. Citizens are no longer citizens, they are “customers”; troubleshooters are no longer troubleshooters, but are “customer services representatives.” While government self-improvement is commendable, some of the business analogies used as a basis for this self-improvement are flawed. In particular, the analogy of the “citizen as the customer.”
       Why is this common analogy flawed? Freedom of choice, or lack of. Businesses and individuals can choose who they can provide for and be provided by; governments and citizens cannot.
       In the business world, a customer chooses to be a customer. If a potential customer chooses not to buy the goods or services being offered by a vendor, then that potential customer does not have to. In other words, an individual is not required to pay for electricity, clothing, food, transportation, etc., if that individual elects not to receive that particular good. Citizens, through taxation, are required to pay for governmental services whether they want them or not. It does not matter if Mr. Smith does not want paved streets; he is still paying for them.
       Not only do customers have the freedom to choose who to buy from (if anybody) and what to buy (if anything), but vendors have the freedom to choose who to sell to or provide services for (if anybody). Many restaurants have signs saying “No Shoes, No Shirt, No Service”; these restaurants are choosing to not have the shirtless or barefoot as customers. Certain retailers cater to only one gender; others cater to only one age group. Government, on the other hand, does not have the privilege of choosing for whom it will provide services; it must provide the same services to all of its citizens, young and old, male and female, well dressed and shirtless.
       Since the “citizen as customer” analogy is flawed, are there any government - business analogies that are appropriate? The answer is yes; the “citizen as owner” analogy.
       Publicly held corporations are owned by the shareholders, for the shareholders, by purchasing stock in the corporation, provide the corporation with capital. Analogously, municipal corporations are “owned” by citizens, for like shareholders, citizens, through taxes, provide the corporation with capital. When the performance of a publicly held corporation does not fulfill the expectations of its shareholders, the shareholders divest themselves of the stock of the corporation and then are no longer affiliated with that corporation. So to, citizens. When citizens are not satisfied with the performance of a municipal corporation, they divest themselves by moving out of the corporate boundaries, and thus are no longer affiliated with that municipal corporation. This citizen “divestiture” has occurred in many cities nationwide, especially in the Northeast and Midwest.
       The shareholders of a publicly held corporation elect representatives to a corporate board of directors. It is this function of this board to set policy for the corporation. Citizens elect representatives to a city board. It is the function of this board to set city policy.
       Continuing with the analogy, the mayor of a city board is analogous to the chairman of a corporate board. The city administrator, hired by the city board to oversee the day-to-day operations of the municipal corporation, is equivalent to a corporate CEO, as the CEO is hired by the corporate board to oversee the day-to-day operations of the corporation.
        The new analogy of “citizen as owner” should provide a much more powerful incentive to improve the quality of government service than the old analogy of “citizen as customer.” While many corporations do not hesitate to alienate potential customers that they do not want as customers, few, if any, are willing to alienate potential or existing investors (shareholders). So too, government should strive to satisfy its current and potential investors, its citizens. If the shareholders/citizens take their investments elsewhere, layoffs, cut-backs, and unemployment will result due to the loss of capital. Thus, jobs are the ultimate benefit of keeping the shareholders/citizens satisfied. It is thus in the self-interest of every worker, whether of a publicly-held or municipal corporation, to ensure that that “owners” are satisfied with the performance of the corporation.

EPILOGUE -- Interestingly, I did receive a veiled threat of “action” from some higher-ups at Little Rock Public Works about a later column published in a different forum that was similar to, and contained an excerpt of, this column.