I am a businessman. A pretty successful one. I want to understand politic.

Currently I think I am just a customer of a state, namely, my state, where I paid protection fee called tax. However, politic seems a bit different than regular business. Moving to a different protection provider (i.e. changing citizenship/residency), is extremely difficult for example. Tax, unlike most fees are not consensual.

I used to think that politic and business are totally different. As a libertarian, I used to think that politicians are "evil" and businessmen are "good." But then, I saw cases where things just don't fit in those boxes and I am very confused.

For example, as a libertarian, I used to think that regulation is bad, and free market is good. It turns out, regulation is actually good for big businesses and bad for small businesses. What prevents a large corporation from subdividing itself in order to avoid internet sales taxes?

I was wrong.

What should businessmen like me understand about politic? What political theories help businessmen understand politics more easily?

I read somewhere that most people are good with money but weak at politics (relative to professional politicians of course.) I myself am a businessman and I want to understand politic. Usually I am able to use what I understand to understand what I don't.

What kind of events can typical politicians see coming from miles away that businessmen and other people don't see coming?

Something like the Top 10 similarities and differences between political and business. Or what about top 10 differences and similarities between typical politicians and typical businessmen, between typical political processes and typical businesses.

For example, in businesses you can't just lie or force people around. It's usually illegal. In politics it's part of the game. Of course, that is just what's typical. In business, like in politic, you would make a fortune if you can deceive without being considered "lying".

It seems to me that politicians are actually a special kind of shady businessmen. Politicians are in a specific "industry" namely political industries, where they get richer if they get more votes and income comes from either donation or corruption. Are there theories that treat politicians like CEOs?

The states themselves seem to be in the industry of protection rackets. Most states declare that protection of their population is the aim of the state and people that live in the state pays tax, or protection fee, for that. Are there any political theory that treat states like protection racket businesses?

In most states, politicians official salary is low and in most states there doesn't seem to be any way politicians can legitimately earn large amount of money. Are there any political theory that treat politics as a business?

On the other hand, businessmen are actually politicians too, except that businessmen are usually use their political skills on a specific settings. Businessmen are politics under "market mechanism". I wonder if there is any political theory that analyze businessmen as a special kind of politician.

What should businessmen know about politics? What aspects of politics do most businessmen not know?

Most businesses have utility function, namely return of capital. What is the utility function of a state? Any theory teaching that?

Perhaps a better similar question would be, as a businessman, what political theory I should understand? What is so obvious for politicians and businessmen that expert knows but lay people don't? What are the main similarities and differences between business and politics? How do political incentives differ from business incentives? When and where does business becomes "like politic" and via versa, and why not?

1 Answer 1

  1. Politicians need to achieve consensus; business people only need to convince individuals in large numbers. E.g. to pass a law in the United States requires a majority of both chambers of Congress plus presidential approval (or two thirds of each chamber). A small business might survive with just a hundred customers.

  2. Businesses can act individually. If they make mistakes, they go out of business. Politicians cannot act individually, so if they fail as a group, they can blame it on other politicians.

  3. Political success helps all incumbent politicians, not just those who actually caused the success.

  4. If two businesses disagree about the best strategy, they can choose different strategies. So their customers can choose different businesses to get the benefits of different strategies, even if the customers live next to each other. In politics, only one strategy can be followed in a given area.

  5. We can't stop politicians from lying without eliminating valuable options: politicians need to be able to change their mind later, so they can't be bound to campaign promises; politicians may intend to mean something different from what listeners think is meant, so restrictive rules may catch even those trying to be honest and leave only the non-committal; voters may not regard the politician as lying, even if someone else does. In general, except in extreme circumstances, politicians are only beholden to their own voters so as not to disenfranchise their voters. Business people are required to be truthful to each of their customers; if one customer is unhappy, the business may be legally required to make adjustments.

  6. What return on capital is to a business person, votes are to a politician. Politicians may care about intermediate statistics like approval rating and fundraising totals, but the reason they care about those is that they predict election results. In the end, winning elections is the thing about which politicians must care to be successful. This is true even if they say they don't care.

  7. If a business loses twenty percent of its market, it might go bankrupt, but more commonly it will just resize itself. If politicians lose twenty percent of their vote, chances are that they lose their office. If they do not lose their office, then there is no immediate result. Business people are graded on a scale; politics is pass/fail.

  8. If a business person goes out of business or is fired, then there is a good chance that the business person can get a similar job. If a politician loses an election, it can be difficult to get even a smaller job back. Most politicians change to a different (albeit possibly related) job.

  9. Business people can lose their job at any time. Politicians are often elected to fixed terms, so they can only lose their job at specific points in time.

  10. If a business' profits grow but another business grows faster, the business is OK. If a politician receives fewer votes than another politician in an election, the politician loses.

  • Interesting. Perfect. I need more similar answers
    – user4951
    Aug 18, 2018 at 6:43
  • 1
    Can any of this be backed up? Aug 20, 2018 at 19:00

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