What are the pros and cons of state owned businesses?

[johncmcleod]

I can't decide which economic system is the best. I don't like communism because one should have the freedom to own their own business, I don't think communism and democracy mix, communal ownership sucks, and because many people could just not work and still get paid. I don't like pure capitalism either. I don't like the idea of rich corporate owners running our country and the unemployed need welfare and stuff like that. So I thought socialism is the best. Well, moderate socialism, as in the government owns all banks, service industries, transportation, and companies that deal with resources.

I like the idea of the government owning service industries (such as insurance) because who would you rather get insurance from? A company that just wants your money or a government program with elected leaders that want to actually serve the people. And then there's the transportation business. Airlines pretty much control how people leave and travel around the country. Should something so big and important to our country be controlled by some businessman? I think not, but it's not enough reason for the government to be in control of it. The same goes with resources, such as oil. Resources are very vital to this country (especially oil), I mean one with control over the resources practically runs the country because, so shouldn't the government control companies that deal with the resources? But then if the government owns resource industries because resources are so important, shouldn't it own all production of food, clothing, and shelter?

So I can't decide whether certain industries should be publicly or privately owned. I think the best way to decide is to look at pros and cons. What are the pros and cons of the state owning certain businesses?

[Kuciwalker]

Privately owned but regulated. That's how the American economy works, and it works pretty well.

[Flubber]

The biggest pro and con at the same time is the one that you have identified-- A government-run business will not necessarily be profit driven and may continue money-losing operations for political reaseons. Whther that is good or bad depends on the industry and the political ideology of the person judging it.

Personally, I find many government run businesses to be unnecessarily "fat". The goverrment run liquor stores in Newfoundland, Canada, paid their employees about 60-100% higher wages as compared to other retail stores.

Personally, I am of the view that government should not be involved in business. The role of government should be to provide certain services as efficiently as possible.

[Kuciwalker]

The biggest pros of democracy and capitalism is that they are inherently self-regulating.

[Myrddin]

The biggest problem for government-owned businesses is that they are spending someone else's money.

The worst part of this is not outright waste but good intentions gone mad; they must have a policy on everything, and a system to enforce the policy, and someone to check the system is working...

Eventually thy lose track of what the business is REALLY about

This happens in the private sector as well to very big businesses, but if they get it wrong they go bust

[Agathon]

Originally posted by skywalker
The biggest pros of democracy and capitalism is that they are inherently self-regulating.

And the winner of this week's most patently absurd statement on Apolyton goes to...

[Agathon]

Originally posted by Flubber

Personally, I am of the view that government should not be involved in business. The role of government should be to provide certain services as efficiently as possible.

One man's service is another man's business.

[Kuciwalker]

They are. If something makes money, it survives. Survival is determined by success, because success is defined by survival.

[Bugs ****ing Bunny]

We could use the British example of how the state-run Royal Mail was, through the 80's and up to the mid 90's, the most profitable mail service in the world.

And then look at how markedly our rail services have improved since they were privatised (Note to non-Brits- Laz is being sarcastic here).

[Imran Siddiqui]

Um... Agathon.... skywalker is right.

If capitalism gets too far, the democracy will pass a law constraining it. If there is too much regulation, and capitalism is stifled, then democracy will elect people that will remove legislation.

What's wrong with his statement?

[Myrddin]

On the rail service it is privatisation, or is it something else that has wrecked the rail industry in the last 5 years (clue: Prescott., Byers, etc)

[Imran Siddiqui]

Laz: Or you could use the example of British airliners after privatization (ie, a more favorable example to use).

[Kuciwalker]

How is the british mail service run, exactly? Is it state-run in the sense that NASA is state-run? Or is it state run in the sense that the Postal Service is state-run (our postal service is guaranteed a monopoly on 1st-class mail, but is required to charge the same for all locations). The latter example is more reflective of capitalism than communism.

[Flubber]

Originally posted by Agathon


One man's service is another man's business.

True-- However, I think the role of government should be to determine those areas that government should involve itself and work to deliver those services. Now if private business can get involved, I see no problem with that.

For instance, I see garbage collection as a valid municipal government function. But if government hires a company in the business of garbage collection, I have no problem with that/

A lot of people differ on what services government should involve itself. For instance, I accept government's involvement in the provision of health care. I don't expect everyone to agee with this.

[Agathon]

Originally posted by Imran Siddiqui
Um... Agathon.... skywalker is right.

If capitalism gets too far, the democracy will pass a law constraining it. If there is too much regulation, and capitalism is stifled, then democracy will elect people that will remove legislation.

What's wrong with his statement?

Because capital can subvert the democratic mechanism by flooding elections with money and making it hard to successfully run for office without the backing of capital. Like in your country.

Any country that wants both capitalism and democracy has to be very careful about separating the former from the latter.