It is a common complaint that there are too many people in parliament that have little or no experience of anything other than politics. It is hard to disagree with that criticism. But alongside this line of attack a parallel positive recommendation is frequently offered to the effect that what is really required is people with some experience of business, with actually running something. On the face of it there seems little to quarrel with in such a suggestion, and the general public appears to share the view. At least candidates in local and in general elections seem to find it important to lay what claim they can to commercial experience, sometimes exposing themselves to criticism that their claims are tenuous, for example the recently successful candidate in the Newark by-election, Robert Jenrick, who apparently described himself as an "entrepreneur" in his campaign literature, only to be accused of having embellished his CV in this respect ('Newark by-election descends into class warfare over candidates' fortunes').
Part of this is doubtless intended to avoid the charge of inherited wealth, which is now generally seen as a disqualification since it indicates disconnection from the concerns of the electorate. Certainly this seems to have been a large part of the motivation in Mr Jenrick's case. However, the bulk of the credit to be gained from the association with commerce is positive rather than merely defensive. It is the suggestion that someone who has run a firm, even if not much larger than the proverbial welk stall, is competent and can be trusted with the affairs of state.
This is an interesting assumption, and it is not difficult to defend many aspects of the position. The experience of responsibility, a sensitivity to the importance of economic cost, and an ability to understand the difficulties that legislation can put in the way of a commercial organisation, all these, and many other characteristics of the businessman, are distinctly positive and desirable in politicians.
However, there is one major drawback, and it is by no means trivial. The experience of running a business or of being a significant decision maker or manager within a firm, is essentially despotic, since firms are in essence insular command economies, or at least have much more in common with such economies than with the population of competing agents that compose a macro-economy. Consequently, and entirely unsurprisingly, politicians with a business background tend to view the national economy as if it were a company, as indeed do the many others who happily use the term UK PLC as if it were a hard-headed and realistic reflection of the facts, rather than deeply misleading collectivist rhetoric, as it seems to me.
To put it another way, politicians with business experience are a mixed bag; on the one hand, yes, they have substantial virtues, but on the other they do not necessarily grasp or even appreciate the importance of distributed decision making in a free market. This seems paradoxical: surely business people understand the importance of liberal markets better than anyone? However, experience shows that this is not the case, and those successful in commerce are often enthusiastic statists of a paternalistic character, trying to transfer their monarchical behaviours from the company, where they have been richly rewarded, to the processes of national government and the oversight of the overall economy. For some reason I think of Michael Heseltine as the type specimen of this class.
The individual who succeeds in a business venture may well come away with the impression that it is possible for one mind, namely their own, to absorb sufficient information to plan an economy in the same way that a brilliant entrepreneur, such as themselves, might design a company's market strategy.
However, this is a delusion, partly because the volumes of information and the uncertainties in a national economy are of a different order of magnitude, and partly because the decision maker in a business may attribute his or her success to information or behaviour that is in fact irrelevant. – In such matters, as in everyday life, we often don't know quite why we succeed or fail. In a large population of decisions such as that in a liberal market the causal features become apparent on average and over time, and market participants can consequently learn retrospectively from experiences that were and perhaps still are relatively opaque to those who underwent the experiences.
A further problem arises from the fact that many businesses now succeed due to negotiating protected contracts with the state itself, and not through winning the favour of the free consumer by the provision of a desirable good at a competitive price. Notoriously, the state's purchase decisions are susceptible to careless inefficiency (the negotiating civil servants just don't care or know enough to make a good choice) and venal or well-wishing moral corruption. Of venal corruption it is unnecessary to say more; but bien-pensant moral corruption is a deeper problem that deserves further consideration. The state's decisions in such cases are motivated not, as a free consumer's would be, by reference to the strength of the desire for the service and the ability or willingness to pay, but by an abstract and often nebulously reasoned sense of its rectitude, of whether it is, in Mr Blair's now famous words 'the right thing to do'. This will frequently be contrarian; if ordinary people do or want one thing but not another, then the shunned behaviour or purchase will be that which the state undertakes, on the ground that this is a market failure in 'need' of correction. Business people with experience of this sort of negotiation who then move into government will bring with them a contempt for the wishes of consumer, and a sense that the producer not only knows best but that the consumer is ignorant and foolish.
This tendency it must be admitted, exists in all producer-consumer relations, since the producer is forever finding that their judgment of what the market will take up is not quite what the consumer wants, thus forcing the company to trim its course in order to stay in business. It is only human for the disappointed producer to rationalise their initial error by transferring the blame on to the consumer: "We made a stunningly good whatnot, but the bloody shopper didn't want it, so we had to offer them this piece of rubbish; they're buying heaps of it, the idiots." However, on calm reflection we should be able to admit that the population of customers is to be trusted to know better than any other party its circumstances and consequent needs and preferences.
On balance, then, while no one should wish to see commercially experienced individuals excluded from parliament, for they have many strengths, there is no reason to believe that they are uniquely fitted such positions. Indeed, on the contrary, when they have the power of the state in their hands, they are very likely to use that power to resolve the age-old dissatisfaction of the producer with the customer by forcing the market to accept what is offered. This is a recipe for error, waste and dissatisfaction, as we can see all around us.