"Supposing you are running Marks and Spencer or Sainsbury or whatever it is, you will be constantly trying to work out whether your consumers are satisfied with the product that they are getting," he said.
"I don't think there is anything wrong with government trying to do that in the same way, but it is not government by focus group or by opinion poll."
Tony Blair also gave a clear signal that he wants to reduce the power of the union barons over the Labour Party, on the eve of moves to water down their influence on National Executive Committee.
Challenged on the party's relationship with the unions, Mr Blair said: "I'm sure we will have a relationship with the trade union movement but it should be based ... insofar as possible, on individual trade unionists wanting to be part of the Labour Party."
Mr Blair stopped short of seeking to break the link between Labour and the unions, which would cause a row with Labour traditionalists, and threaten a split in the Cabinet.
But his remarks on the Jimmy Young programme on BBC Radio 2 will be seen as part of the strategy for distancing the decision-making of the party from the power of the trade union executives.
The national executive of the Labour Party today will approve the final draft of the Party into Power document which is designed further tomodernise the party and its annual conference, with more seats on the executive for local authority leaders.
The Labour Party could not afford to represent only the trade unions, but had to be a broad coalition of people who believed in social justice, Mr Blair insisted.
He encapsulated his problem in seeking to reconcile Labour stalwarts with his modernising approach, saying: "It is my aim to make sure that the Labour Party is a modern party - that it sees absolutely no contradiction between compassion and full support for ambition and enterprise and all the things that make an economy dynamic."
Mr Blair insisted that the party had to change, in spite of criticism over the direction in which he was leading it by former Cabinet minister Tony Benn and former deputy leader Roy Hattersley.
He said of Mr Hattersley's charge that Labour no longer represented a force for a more equal society: "I believe in levelling up, not levelling down.
"I say to people - and I say to Roy Hattersley and others - better to give people the chance to stand on their own two feet and earn a living than just pay them a few quid extra on benefit, and tax those who are higher income earners in a way that actually doesn't do much good for the economy and much good for the rest of society."
He added: "But I do think that any political party has to keep changing with the times."
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