During my attempts at elaborating any prior research or analysis, I realized I was answering the question myself. I will post that partial answer below.

Nonetheless, one thing which I deliberately do not go into and instead encompass is that there are both different types of businesses and governments. If anyone has anything to add beyond my answer, especially if it addresses the different types of each, feel free.

  • 1
    Do you mean a government in the sense of a political entity in charge of policy or do you mean the larger government that does the "day to day" management and implementation of existing and new policies, as well as helping to advise on (but not usually create) new policies ? Commented Oct 5, 2020 at 4:18
  • The more I ponder on this question, the more interesting it becomes and the less clear an answer seems to become. Especially considering the two most well-known East India Companies straddling that boundary.
    – Jan
    Commented Oct 7, 2020 at 10:44

6 Answers 6


I think you would have to answer the question "what is their reason for existence" to distinguish one from the other. A business has primarily an economic interest; whereas government, political.



Arguably, it could be said that a business is the most direct/pure manifestation of economics. Arguably, again, it could be said that a government is the most direct/pure manifestation of politics.

A business, an entity, is a means through which a stakeholder's interests are represented. A government, an entity, is a means through which a state's interests are represented.

This question simply inquires about a specific level of abstraction among the following (from macroscopic to microscopic): private versus public, economics versus politics, businesses versus governments, and stakeholders versus states.

(Note: I am open to different orders of the above abstractions, or any additions. However, I am fairly certain that is the correct arrangement.)


(In regards to intent) Besides the level of abstraction, on a more sociological and psychological level, they are different degrees of self interest versus selflessness. A government, most types, would be more utilitarian and have the interests of more people in mind than just the immediate stakeholders of a business.

(In regards to consequence/impact) However, it is nonetheless noteworthy that it is possible for each to solve the same problems. This is because a hypothetical model of future governance (which is seemingly where the world is heading at the moment) is that governments would not really exist and the world would be entirely run by businesses (specifically, large companies/corporations).


Going off of the hypothetical ruling of the world through businesses, a key distinction could be said that a government has what is called enforcement. Specifically, physical prowness through military, police, etc. If anything, that ability to attack or defend in the physical sense is what distinguishes the two. However, would private security for business not count as a form of this..?

  • 1
    A business concentrates on doing things to turn a (short-term) profit. A government regularly invests in things that don't turn a profit or are even profit-negative (e.g. military spending), or things that may pay-off in the (very) long term (e.g. education).
    – Dohn Joe
    Commented Oct 5, 2020 at 7:32
  • @DohnJoe Arguably, there is a business benefit from investing in armed forces: Shoring up the negotiation position by waving a big stick, and being able to ignore other people's big stick, as well as staving off total loss of assets, also known as a hostile take-over or invasion. Commented Oct 5, 2020 at 16:33

Few if any businesses* have armies, police forces, or prisons. Business relationships must fundamentally be based on mutual consent; governments can use force.

*OK, there are the occasional mob-owned businesses that have their enforcers, but these are the exception.

  • 2
    A business with armies? The United Fruit Company comes to mind.
    – Dohn Joe
    Commented Oct 5, 2020 at 7:29
  • 2
    East India Company - "twice the size of the British Army"
    – Jontia
    Commented Oct 5, 2020 at 8:19
  • Anarcho-capitalists would like businesses to have armies, yet insist that this does not result in businesses becoming governments. Commented Oct 5, 2020 at 9:39
  • @Jontia: But the East India "Company" was a de facto government, and effectively an arm of the British government.
    – jamesqf
    Commented Oct 5, 2020 at 18:22

A government is sovereign, beholden to none. A Business is not.

Usually there are more things involved, to ensure the people doesn't rebel/strike and put a new government/leader in charge. Though none of that really changes the answer.


A speculation inspired by this question and several answers, with a few qualifications:

As other answers note, a normal stable government makes laws, issues currency, collects taxes, and has a monopoly on force and coercion within its borders and territories.

As other answers also note, a normal stable business follows laws not entirely of any single business's making, pays taxes, and relies not on force, but on trust, trade, mutual satisfaction among public traders, and profit. Where force is required businesses must rely on their government.

There are (at least) two main combinations of business and government:

  1. For profit. A more correct name for any business or business alliance that makes laws and uses force with impunity in collusion with its government is an empire. Like a business, an empire seeks profit by offense, it no longer relies on trust and mutual satisfaction, (excepting the secret trust and satisfaction required among private traders in graft), instead it publicly relies on one-sided bargains, propaganda, highly preferential legislation and sponsorships, and coercion.
  2. For survival. A normal stable government or alliance defending against an empire may find it necessary to declare martial law and temporarily subsume militarily useful businesses the better to strengthen that nation's defense.
  • Assuming "empire" to describe #1 is correct, no English term comes to mind for #2.
    – agc
    Commented Oct 5, 2020 at 15:21
  • While #1 might be legal, (like the British East India Company), or illegal, (the Mafia, or whoever), it's not obvious whether it makes much practical difference.
    – agc
    Commented Oct 5, 2020 at 15:24

The Difference between a Government and a Business

A Government is a political administration for Representation and Fulfilling of its civilians and the organization for society's affairs and of national order but manifestation and portrayal, representation on international disputes and affaires. A Government is a political institution consistent of both Legislative, Executive and Judiciary. When one says for example (X government) there's an indication but also symbolisation of the nation's society and sovereignty but also how relationship is between government and people but also government and foreign nations. Governments follow each of their own political ideology for example, (China = communism; Germany = Democracy). "A Government is necessary to the existence of civilized society"

the political direction and control exercised over the actions of the members, citizens, or inhabitants of communities, societies, and states; direction of the affairs of a state, community, etc.; political administration: Government is necessary to the existence of civilized society. -- https://www.dictionary.com/browse/government#:~:text=noun,the%20existence%20of%20civilized%20society.

A Business is an economic enterprise done by a single being or more (Group, company...-) to gain profit (money) by selling and offering goods, services, profits to the buyers, where every business has a model which varies a lot. Business models may also vary from what Business Industry one is laid on. Business may be for-Profit or Non-profit.

The term "business" also refers to the organized efforts and activities of individuals to produce and sell goods and services for profit. Businesses range in scale from a sole proprietorship to an international corporation. Several lines of theory are engaged with understanding business administration including organizational behaviour, organization theory, and strategic management.

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