Why is the state not run like a company (some thoughts on Paul Krugman’s article “The State is Not a Company”)

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Ivane Javakhishvili Tbilisi State University Press
It has been more than two decades since the mistaken belief got a foothold in Georgia piecemeal that a minister should be a good manager and his professional suitability for the field in which this “good manager” becomes the head of the ministry is ignored in political circles. As a result, for years the Ministry of Finance was headed by a physicist (who even boasted of being a good manager), the Ministry of Economy – by a biologist and a physician, the Ministry of Agriculture – by a lawyer, the Ministry of Energy – by a sportsman, the Ministry of Health Care – by a lawyer first then a philosopher who was replaced by a historian. Questions arise as to whether professional education is required in taking a high political position or whether it is sufficient for a minister to be a good manager only. More specifically, who should lead the country’s economy – an economist or a manager? To answer these questions, it is necessary to understand the difference between the country and the company. More than two decades have passed since a prominent American economist, the Nobel prize winner in economics, Professor Paul Krugman, published an article with an intriguing title, “A Country Is Not a Company,” detailing the fundamental difference between a country and a company according to which the first is closed system, and the other – open (Krugman, 1996). This article discusses a number of visible examples of the principle difference between an economist’s thinking style and a manager’s thinking style. The goal for the rulers of the state is to increase the well-being of its population, to achieve sustainable economic development and inclusive economic growth. As for the company, its determinant is the increase of profit and/or the value of the company itself. This is the principle difference between the goals of the state and the company and the criteria for evaluating success (Papava, 2018). Given that state and company have different goals, the answers to these questions are simple: Of course, high-level government positions require the appointment of professional economists, and managers’ place is in business only. Although it has been a long time since Professor Krugman’s article was published, it has not lost its relevance and it must surely be read by heads of state, politicians, journalists, economists, and students of economics. Thanks to the editorial office of the journal Economics and Business, Paul Krugman’s article has now become available in Georgian, and I am sure it will enable readers to pay close attention to many of the interesting aspects of economist’s profession.
 Krugman P. (1996). “A Country Is Not a Company.” Harvard Business Review, January– February, https://hbr.org/1996/01/a-country-is-not-a-company.  Papava V. (2018). “ratom stchirdeba sakartvelos ekonomistebi [„Why Georgia Needs Economists.”] rondelis blogi [Rondeli Blog,] October 12, https://www.gfsis.org/ge/blog/ view/871 (In Georgian).
Economics and Business, №3, 2019, pp. 24-26