Musk Pushes for Federal Efficiency, but Privatizing Brings Problems

“We do have an opportunity to do a once-in-a-lifetime deregulation and reduction in the size of government,” Musk said at the summit appearance about a potential Trump win.

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

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, accepted a role on two of the then-president’s economic advisory councils. He later departed the administration, citing Trump’s environmental policies.

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

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

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

While perhaps misguided, both experts said it’s not an entirely unfounded line of thinking. According to the academics, the government is inefficient in many ways, and accusations that federal agencies waste time and money are not always unwarranted.

But the push to make the government work more like a business misunderstands a fundamental element of US federalism — profit is not the end-all, be-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 professor of political science at the University of Southern California.

Profit vs. Protection

Efforts to privatize parts of the US government date back decades. The modern-day push for a business-like government has its roots in Reaganomics, the economic policy put forth by President Ronald Reagan in 1981, which reduced regulation, slashed government spending, and scaled down 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 attempted to streamline government processes and minimize bureaucracy.

Former President George W. Bush also had a business background, making his pre-presidency fortune 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 present in local and state government, too, adding that private sector professionals often run gubernatorial races on such platforms.

Political experts said it makes sense that business leaders like Musk would see only inefficiency and wastefulness in the government’s 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 isn’t the same.”

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

“Sometimes that’s not efficient in an economic sense,” Grose added.

Consider, too, that the government and businesses serve very different stakeholders, Grose said. CEOs have to answer to stockholders and a board of directors — the president has to answer to every American in the country.

The pitfalls of privatized government

Crouse said the consequences could be dire if Trump and Musk are able to make massive cuts to federal agencies.

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

For all of its faults, the federal government has a fail-safe of sorts, thanks, in part, to its massive size, Crouse said. She added that outsourcing critical government services to private companies runs the risk that those services could disappear if the company went bankrupt.

“A business isn’t really self-correcting, at least not as easily as government is,” Crouse said.

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

“Businesses are out to make a profit, so they’re going to do what they can to increase profits, and if the consumer gets hurt in the process of doing that, well, that’s all a 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 “once-in-a-lifetime” deregulation.

While Trump did engage in some deregulation during his first term, Grose said he didn’t behave like a traditional business Republican, citing his tariffs and tax cuts, the latter of which helped the national debt surge.

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

Both Crouse and Grose also expressed hesitation about taking business advice from Musk, pointing to the breakdown of Twitter, now X, after the billionaire bought the site in 2022.

Ultimately, however, both said the 235-year-old federalism that governs America simply isn’t equipped to handle the pressures faced by private businesses.

“My fear is that it would collapse,” Crouse said.