Can private businesses solve public policy problems better than the government? It’s a question that has persisted for decades and taken on new resonance now that a career businessman is in the White House.
There has never been a clear answer. For every sign of success — a smooth privatized toll road or a gleaming charter school — there have been obstacles revealing just how difficult public works can be.
But companies haven’t stopped trying. Just this past week, the ambitions reached new heights when three of today’s most successful business leaders said they would form an independent company aimed at lowering the burden that health care places on the economy while improving the system for their employees.
In a brief statement that provided virtually no details, the chief executives of Amazon, Berkshire Hathaway and JPMorgan Chase said they were fed up with the state of the health care system, and were convinced they could do better themselves.
“The ballooning costs of health care act as a hungry tapeworm on the American economy,” said Warren E. Buffett, the head of Berkshire Hathaway. “Our group does not come to this problem with answers. But we also do not accept it as inevitable.”
Joining Mr. Buffett were Jeff Bezos of Amazon and Jamie Dimon of JPMorgan. Together, the three men have revolutionized industries, forged empires and navigated all manner of crises. But can they fix health care?
In announcing they would try, they delivered an implicit rebuke of the complex and costly American health care system, suggesting that the best minds in business could do better.
“Companies are now thinking much more about how to solve larger social problems,” said Aaron Chatterji, a professor at Duke University’s Fuqua School of Business. “When Amazon, Berkshire Hathaway and JPMorgan, three leaders in their industries, looked around, they realized that health care is a big issue facing them all.”
Their efforts stem from a feeling that, with partisan bickering and constant campaigning consuming Washington, the onus is on businesses to fill the void left by an ineffective government.
Tim Cook, the chief executive of Apple, acknowledged recently that a new imperative was challenging corporations. Government has “become less functional and isn’t working at the speed that it once was,” he told The New York Times last year. “And so it does fall, I think, not just on business but on all other areas of society to step up.”
The notion that big business might shape government policy is nothing new, of course. Lobbyists have been working to sway lawmakers for decades, and the corporate world was an influential force in the tax overhaul passed last year.
Yet for the most part, these efforts were narrowly aligned with a company’s self-interest, usually in the form of lowering taxes and loosening regulations. And rarely have business leaders tried to assume operational control of a government function, let alone something as complex and unwieldy as health care.
In recent years, however, more chief executives have begun speaking out on issues that at first glance have little to do with the bottom line, including immigration policy, climate change and gay rights.
Corporate leaders have banded together to protest laws targeting transgender and gay rights in Indiana, North Carolina and Texas. And last year, as President Trump rolled out strict immigration rules, executives spoke out against the effort, with some, like the Google co-founder Sergey Brin, joining protesters at airports.
“The lack of leadership on the national political level has left this vacuum,” said Kathleen Clark, a professor at the Washington University Law school. “Fortunately, there are some business leaders who see that there’s a role for them to play.”
The most vivid expression of this new willingness to speak out came last summer after white supremacists marched on Charlottesville, Va., and Mr. Trump equivocated in his response to the violence.
In a matter of days, top executives at the nation’s largest companies issued statements condemning racism and denouncing Mr. Trump’s response, and the president’s business advisory councils were disbanded.
Chief executives may seem like unlikely ethical leaders; Wells Fargo, Equifax, Uber and many more companies have faced questions from Congress about practices that have harmed consumers and in some instances cost taxpayers billions of dollars.
But companies have also been wading into moral debates for decades. General Motors and Pepsi pulled out of South Africa during the apartheid era. Apple, Disney and Xerox were early in extending health care benefits to gay and lesbian couples.
Similar efforts by chief executives today recall “an earlier era of corporate statesmanship,” said Lee Drutman, a fellow at New America, a research and policy institute. “A lot of these business leaders viewed a business as having a somewhat broader public mission.”
Now, he said, thanks to “the rise, over the last 15 years, of the importance of social responsibly and social mission, there is a broad movement in business.”
Even Amazon’s much-publicized efforts to select a city for a second headquarters could, in a roundabout way, influence local policymakers. Given that the company is unlikely to set up shop in a state with socially conservative laws that might alienate some employees, “Amazon could have an effect not just on prices but on what legislators pass,” Mr. Chatterji said.
Other examples of ambitious efforts by top executives to tackle social problems aren’t hard to find. Mark Zuckerberg, the chief executive of Facebook, made an ill-fated attempt to reform the public schools of Newark, N.J. Elon Musk has audacious plans to build a futuristic high-speed transportation network connecting cities in the Northeast. And billionaires across the political spectrum — from Tom Steyer on the left to the Koch brothers on the right — are spending heavily to sway public policy to their liking.
The wealthiest corporate titans are also using their philanthropy to shape public policy, in the United States and beyond. Microsoft’s co-founder Bill Gates, through the Bill and Melinda Gates Foundation, is working on myriad initiatives that might plausibly be done by governments, including efforts to curb tobacco use, slow the spread of H.I.V. and improve education in Washington State.
George Soros, through his Open Society Foundations, has been promoting democratic ideals around the globe. And Mr. Zuckerberg, through the Chan Zuckerberg Initiative, is working on ambitious long-term projects involving science, education and justice.
There is a big difference, though, between supporting social causes and research and operating a sprawling public works system. Critics will contend that some of these efforts smack of arrogance, and that businesses ought to stay in their lane and focus on offering excellent products and services, not meddle in public policy.
“There is this hubris, thinking that they can do it better,” Mr. Chatterji said.
There is also a certain irony to the fact that Amazon, Berkshire Hathaway and JPMorgan said the new company they had formed would be “free from profit-making incentives and constraints.”
The profit motive, after all, is what leads to efficiency and innovation, according to conventional business school wisdom. Operating as a nonprofit “flies in the face of the logic of the capitalist economy,” Mr. Chatterji said.
It most likely will take years to determine if the three companies can make good on their promise of building a better health care system. Even if they succeed, the rewards may be limited to their employees — a large figure, but a small portion of the American work force.
Nonetheless, the companies’ push is among the most audacious efforts by the private sector to date, and Mr. Dimon did not shy away from the scope of their ambition.
“The three of our companies have extraordinary resources,” he said on Tuesday when the initiative was announced. “Our goal is to create solutions that benefit our U.S. employees, their families and, potentially, all Americans.”