Public administration has borrowed managerial methods from business since public administration's origin. The first statement of its principles, written in 1887 by a young college professor, the future President Woodrow Wilson, even described "the field of [public] administration" as "a field of business." One might think, then, that "privatization" is simply the logical culmination of a century-old trend. Yet, in reality, it represents an historic change. "Privatization" is more than just another management technique. Privatization reflects a desire to turn back the course of history.

For many decades, government growth everywhere outpaced the private sector. This seemed inevitable. An advanced economy raises demands-for transportation routes, for example-and creates problems -like environmental pollution-that only government seems able to meet. Yet, privatization has recently enjoyed considerable success. The collapse of communist economies in the Soviet Union and eastern Europe and the creation of new market based institutions has had counterparts in democratic socialist societies, including Thatcher's Britain, where some state-operated industries and holdings were sold to private owners.

Because the US never accepted "socialism" in a major way, there has been less for government to dispose of. Automobile companies, airlines, electricity, and so forth, have typically been in private hands. Yet, the same turning away from a government grown too costly and undisciplined occurred here in the 1970s and 1980s. The marks it left were deregulation, "zero-based" budgeting, "sunset" laws, deficit reduction targets, and all the other elements of "cutback management."

"Anything you can do, I can do better" is the theme-song of privatization's most ardent proponents, with "better" meaning one thing: "cheaper." As a respected expert in public finance declared to me, "I cannot see any reason why government should do anything the private sector can do less expensively." And that, to an economist, is nearly everything, because government is considered "monopolistic" and hence costly and exploitative, while business-presumably disciplined by a competitive marketplace-is forced to become ever more efficient.

One can challenge the claim that privatization always saves money, that competitive bidders will always be available, and so forth; many have done so. For example, some City of Chicago engineers claim that their department pays consultants as much as four times what it formerly cost to perform the same work in-house.

But this economic approach is too narrow. Cost is not the only issue pertinent to government. Questions of propriety and legitimacy are also involved. Indeed, in the historic essay quoted earlier, Wilson declared "It is the object of administrative study to discover, first, what government can properly do." (Discovering how "to do these proper things with the utmost efficiency and the least possible cost of either money or of energy" comes second.)

The primary question (what government can properly do) cannot be resolved in a day; resolving it is, very likely, a key task of each generation. But a way to begin is to reflect on not the more commonly-perceived similarities between business and governmental management, but their less-often-emphasized differences.

This, too, has a tradition. Sixty years ago, political scientist Wallace Sayre argued that surface similarities-say, the shared preoccupation with hiring, performance evaluations, and audits-were misleading. Public and private management are alike, he said, only "in all unimportant respects."

Choosing to have business, rather than government, deliver a public service ought to be a matter of consequence because the "cultures" of business and government grew out of different necessities: to beat out competitors, on the one hand, and to maintain popular support, on the other. These necessities are augmented by socialization. People in business and government generally differ on key issues because they have been "indoctrinated" differently by work experience and formal education. For example:

Attitude toward the Law. In business, the bottom line is profit. In government, there is a different bottom line, less often noted: faithful execution of the laws. Wilson himself defined public administration as "detailed and systematic execution of public law." A charge to "take Care that the Laws be faithfully executed;" directed at the president, is the principal reference to administration in the U9 Constitution.

Business, of course, should not and generally does not flagrantly disregard the law. Indeed, most business codes of ethics stipulate that employees should not "do anything unlawful or improper that will harm the organization:" There is a difference, however, between an instruction to "faithfully execute" the law and one that says "don't break it." To choose business to operate a program, then, is to choose a mechanism where adherence to the popular will expressed through legislative action is not the principal objective.

Public Interest Orientation. Business is primarily concerned with the interests of its shareholders. Public administration, in contrast, has always been grounded in some conception of the general welfare.

Those in public life necessarily "rub up against more considerations" than those in business, as Paul Appleby noted, with the result that long concentration on business functions often leave a person ill-prepared for governmental roles: "Without being venal, some thought their positions were simply a fortunate special privilege, like being the cousin of a purchasing agent. Others again had the fixed idea that the best possible way of promoting the public welfare would be to help private business and assumed accordingly that doing favors for private business was their simple governmental duty."

Involvement in Politics. Just as monks are expected to abstain from worldly pleasures, public servants are restricted in their political activity. A string of judicial decisions focused in Illinois, where this stricture was too often neglected, have now elevated it to Constitutional doctrine. Business, in contrast, considers political involvement a useful tool for enhancing its well-being; corporate PACs, in particular, have mushroomed since the mid-1970s. Not surprisingly, "politicization" has been a criticism of privatization activity; a recent Chicago Tribune series described state contracting for services as "the new era of patronage," preferred now that older forms are clearly unlawful.

Openness and Confidentiality. Government, by tradition augmented by recent open meeting and freedom of information laws, must be open to public inspection and participation -indeed, to intensive and often hostile journalistic scrutiny. Business, in contrast, is a private venture; internal operations may be considered a secret, likely to jeopardize corporate success if it falls into the hands of a competitor.

The flip side of openness is confidentiality. Government is necessarily entrusted with information that it should not and cannot use in various ways: individual census records and tax return, for example. Business, on the other hand, considers information a strategic tool in the quest for corporate advantage. To choose business to provide a service, then, is to give information to an organization inclined to use everything it knows in the service of its economic objectives and to hide what it knows from public view.

These few examples do not exhaust the differences between business and government bearing on privatization. Others include the greater continuity of employment that marks the public service, as well as the strong "mission orientation" of many of its workers; the concern with "appearances" that is essential for those in public life; the enhanced stress on "process" and "fairness" in every aspect of governmental operations; and the greater need for clear lines of accountability, lines privatization often muddies. But the list is, I hope, long enough to prompt greater thought about privatization as a potentially troublesome, if also potentially useful, device.

Forecasting is perilous. But my bet is that, ten years from now-. we will look back on the recent infatuation with privatization as a dead-end in the quest for more productive and trustworthy government. That's the bad news. The good news is that excesses by proponents of privatization could well produce serious debate about the primary task Woodrow Wilson set before us a century ago: reconsidering "what government can properly do." That would be good news, indeed.