Musk calls for federal efficiency, but privatization brings problems

“We have a once-in-a-lifetime opportunity to deregulate and reduce the size of government,” Musk said in a summit appearance on a potential Trump victory.

But two political scientists told Business Insider that Musk’s desire to run the U.S. government like a private business — an approach that many private-sector professionals have advocated for decades — isn’t as secure as they might think. the CEO.

Musk did not respond to a request for comment.

Musk has done a 180 in his support for Trump. The billionaire endorsed Hillary Clinton in 2016, but after Trump won, he accepted a role on two of the then-president’s economic advisory councils. He later left the administration, citing Trump’s environmental policies.

But since Musk officially endorsed Trump in July, he has repeatedly posted on X about the need for government efficiency.

“The idea that you can run the whole government like a business, it’s just not designed that way,” said Patricia Crouse, a political science and public administration practitioner-in-residence at the University of New Haven. “You have to work around our system of federalism.”

Trump, a businessman turned politician, built much of his first presidential campaign on the idea that his experience in the private sector would guide his approach to politics.

While they’re probably wrong, both experts said it’s not a completely unfounded line of thinking. According to academics, the government it is ineffective in many ways, and accusations that federal agencies waste time and money are not always unwarranted.

But the push to make government run more like a business misunderstands a fundamental element of American federalism — profit is not the be-all, end-all, political science experts said.

“Government is almost always more inefficient than the private sector because their motives are just different,” said Christian Grose, a political science professor at the University of Southern California.

Profit vs. Protection

Efforts to privatize parts of the US government date back several decades. The modern push for business-like government has its roots in Reaganomics, the economic policy proposed by President Ronald Reagan in 1981 that reduced regulation, reduced government spending, and reduced the federal workforce.

The other side of the aisle took a similar approach in 1993, when then-Vice President Al Gore launched the Reinventing Government initiative, which sought to streamline government processes and minimize red tape.

Former President George W. Bush also had a background in business, making his fortune before his presidency in the Texas oil industry. Once in office, Bush cut regulations with his Faith-Based and Community Initiative, which sought to outsource some social services to faith-based groups.

Grose said the pro-business mentality is also present in local and state governments, adding that private sector professionals often run gubernatorial races on such platforms.

Political experts said it makes sense for business leaders like Musk to see only inefficiency and waste in government operations.

“In the private sector, the motive is profit. The less efficient you are, the less profitable you are,” Grose said. “But inefficiency in the private sector is not the same.”

The government’s job is not to make money, but to regulate and keep people safe.

“Sometimes that’s not economically efficient,” Grose added.

Also consider that government and businesses serve very different stakeholders, Grose said. The CEO must answer to shareholders and a board of executives—the president must answer to every American in the country.

The pitfalls of privatized government

Crouse said the consequences could be dire if Trump and Musk succeed in making massive cuts to federal agencies.

“If you decide you want to run government entirely like a business, you’re going to see things like poverty and unemployment go up because it becomes every man for himself,” Crouse said.

For all its faults, the federal government has a kind of safety, thanks in part to its massive size, Crouse said. She added that outsourcing essential government services to private companies risks those services disappearing if the company went bankrupt.

“A business doesn’t really self-correct, at least not as easily as government,” Crouse said.

Crouse said privatization of the federal government could also lead to increased corruption, pointing to the for-profit prison industry as an example. In 2008, two Pennsylvania judges were convicted of accepting money in exchange for sending children to private detention centers to increase occupancy.

“Businesses want to make a profit, so they’re going to do whatever they can to increase profits, and if the consumer gets hurt in the process of doing that, well, that’s part of business,” Crouse said.

Beyond the logistical issues associated with a business-like government, Grose said he was skeptical of the sentiment at the heart of Musk’s comments earlier this week, casting doubt on whether a second Trump presidency would result in a “once in a lifetime life” deregulation.

Although Trump engaged in deregulation during his first term, Grose said he did not behave like a traditional business Republican, citing his tariffs and tax cuts, the latter of which helped increase the national debt.

“It’s not obvious to me that he’s a massive budget mover based on past experience,” Grose added.

Both Crouse and Grose also expressed reluctance to take business advice from Musk, pointing out that Twitter, now X, after the billionaire bought the site in 2022.

Ultimately, though, both said the 235-year-old federalism that governs America is simply not equipped to handle the pressures facing private enterprise.

“My fear is that it’s going to collapse,” Crouse said.