What are the pros and cons of state owned businesses?

[Spiffor]

Originally posted by Kidicious
How do you invision it?

I envision a system intermediary between Odin's anarcho-socialism and Azazel's centralism.
The basic idea is that the company's employees decide how the company is managed (i.e dominance of the workers in an internal democracy), and what its financial objectives are.

The State fixes prices of any significant good; it is up to the companies to make enough money with it, but the State can give subsides when the fixed priced is judged artificially low. It also owns big companies (despite not being involved in its daily management, unless it is a catastrophe), and can pour money in case it deems new investments to be necessary.

The Citizen has a private property on all his goods. For those who can't afford it, however, the State puts many opportunities at disposal to cover up basic needs, such as cheap public housing, cheap food and medication, cheap or free mass transportation.

Individual businesses are possible and encouraged. The State doesn't put its nose at all in individual businesses. When they grow into several-people businesses, they are subject to the law giving a say to the employees (much like if they were associates). These private companies are restricted from being big companies, to avoid them having any disproportionate political or economic power.

Bureaucracy must be kept to a minimum. Only prices of good of national interests should be fixed by the State. Fancy consumer goods, and the intermediary products allowing to produce them, should have their price regulated by the market. The creation of an individual business should be immediately doable, and the short paperwork has not to be done immediately.
The State acts as a client of big companies, but doesn't have to enact tons of bureaucratic production processes: these are done more efficiently by people working in the company. Of course, should the company not make enough money because of incompetence, it will be out of business.

The system has to be strongly democratic. Otherwise, the whole thing is useless and free market is better.

[Az]

Originally posted by Spiffor
Az:
The real problem with a completely centralized economy is that:

- it is difficult to make sure nobody will abuse that power. If all the economic power of a Nation falls into the hands of an institution (the State), the concentration of power within this institution in the hands of one man must be avoided at all costs. It requires solid institutions and solid democratic control. Corruption is an issue as well, that requires much monitoring.

a. corruption is always an issue.
b. That's what the separation of powers is for.

- Complex societies create hundreds of new needs daily. Those can be needs for extremely small amounts of products, or new intermediary products used in some production process. If the production is wholly centralized, there will be a lag between the emergence of the need, and the time when it actually gets satisfied, after the whole bureaucratic process and allocation of resources take place. In these situations, individual initiative is much more efficient.

There is always a lag betwee the creation of a new need, and the rise of a product that would satisfy it. The companies themselves would be either big enough to have those labs themselves, or free enough to create a tender for a research facility, or other possibilities.

[johncmcleod]

Someone mentioned that the solution was for the government to run some industries and the others could be privatized. But transportation and the gathering and controlling of natural resources wasn't in there. Would it be good if the state ran those? And Azazel, how does the state run banks in Israel work? If they work just fine, than there must be a way for state run businesses to work. And, when Sweden was a democratic socialist country, how did the state run businesses there work?

How about it's like this. The government controls the leadership of the state run industry, such as an oil company, and the more profit towards the government it makes the more the leaders get paid but if the company isn't serving the people well the management can be democratically removed.

[Az]

Yes, in Israel, Banks run just fine.

[johncmcleod]

No, I know they run fine I mean how does the system work? How is the management of the business put in there? How do they get incentive to run well and serve the public?

See what I meant in my last post was that when the leaders get paid more there's more incentive for them to run the company efficiently.

[Az]

There are a couple of matters in Israel, that need adressing as a possible future model of state-run corps.:

-The power of the trade-unions must be deminished: the trade unions, and esp. their bosses have taken rediculous privileges.
-The process of appointment of directors must be cleansed, thoroughly, and politics must be removed from the appointing people. These days, all sorts of morons, and friends of ministers get appointed. And then people say "State corps don't work!". Of course they don't if you appoint your grandma as CEO.

[johncmcleod]

Well if the government doesn't appoint the leaders of state run companies, who does? Wouldn't it be better if they were put into power democratically?

How can people say socialism can't work when it has in our country? The Tennessee Valley Association or whatever it was called was sort of socialist and it worked great.

[Az]

Originally posted by johncmcleod
Well if the government doesn't appoint the leaders of state run companies, who does? Wouldn't it be better if they were put into power democratically?

The government, but a different, separate branch of the government. Elder civil servants, for example.

How can people say socialism can't work when it has in our country? The Tennessee Valley Association or whatever it was called was sort of socialist and it worked great.

Because some people are interested in not having socialism, and have lots of persuasion power through media, and other entities. Many people believe them.

[Kidlicious]

Originally posted by Spiffor
The basic idea is that the company's employees decide how the company is managed (i.e dominance of the workers in an internal democracy), and what its financial objectives are.

How is their pay determined? What happens when the company goes broke? What happens to the profit?

Originally posted by Spiffor
The State fixes prices of any significant good; it is up to the companies to make enough money with it, but the State can give subsides when the fixed priced is judged artificially low.

I thought you were against prices? How is that different from my proposal?

Originally posted by Spiffor
It also owns big companies (despite not being involved in its daily management, unless it is a catastrophe), and can pour money in case it deems new investments to be necessary.

How do you make this fair? If the govt invests in one company and not another one won't the workers in the other companies be upset? I'm assuming that you are providing some reward system for success.

Originally posted by Spiffor
The Citizen has a private property on all his goods. For those who can't afford it, however, the State puts many opportunities at disposal to cover up basic needs, such as cheap public housing, cheap food and medication, cheap or free mass transportation.

So the losers in the system only get their basic needs met. While the winners get all the goodies? Do you have any limits to that?

btw, there are a lot of basic needs that you didn't list. People need cash to pay for things they need. Life would such very bad if people could only get the free services that you listed.

Originally posted by Spiffor
Individual businesses are possible and encouraged. The State doesn't put its nose at all in individual businesses. When they grow into several-people businesses, they are subject to the law giving a say to the employees (much like if they were associates). These private companies are restricted from being big companies, to avoid them having any disproportionate political or economic power.

Who gets to own their own business? After a business fails what happens? Is the owner responsible for the debt? Is he allowed to open up another business?

Originally posted by Spiffor
Bureaucracy must be kept to a minimum. Only prices of good of national interests should be fixed by the State. Fancy consumer goods, and the intermediary products allowing to produce them, should have their price regulated by the market. The creation of an individual business should be immediately doable, and the short paperwork has not to be done immediately.
The State acts as a client of big companies, but doesn't have to enact tons of bureaucratic production processes: these are done more efficiently by people working in the company.

That sounds a lot like the system I proposed. How is it different?

Originally posted by Spiffor
Of course, should the company not make enough money because of incompetence, it will be out of business.

Then what happens to the employees?

Sorry for just questions basically, but I can't really critique your proposal without details. Like they say, "The devil is in the details."

[Az]

What do you think about my system, Kidicious? ( x2 on the CPA location line! Spiffor, we're still waiting for you to join our maginicent party! )

[Kidlicious]

Originally posted by Azazel
What do you think about my system, Kidicious? ( x2 on the CPA location line! Spiffor, we're still waiting for you to join our maginicent party! )

I like your idea of additional branches of govt to accommodate the new functions.

Have you outlined it on this thread? I would like to look at it closer. What page is it on?

[Spiffor]

Originally posted by Kidicious
How is their pay determined? What happens when the company goes broke? What happens to the profit?

The pay is determined by the management, responsible before the employees through an internal democratic level (basically, employee's representation makes the board of directors). Every aspect of internal organization is decided pretty much the same way as today... Except that the employers will be voted out if they screw the workers too much.

I thought you were against prices? How is that different from my proposal?

I didn't throw your whole proposal in the garbage. Having the State fix prices of national's interest goods makes sure they don't get out of hand.

How do you make this fair? If the govt invests in one company and not another one won't the workers in the other companies be upset? I'm assuming that you are providing some reward system for success.

This is not a reward system for success, but rather an investment to allow the company to reach new, more ambitious goals. For example, if the State want to open a new highway between two cities, it is normal it gives a further investment in the Highway-Building company.
Investments don't have to be 'fair' to the workers, they have to follow national interests, thus being 'fair' for the population in general.

So the losers in the system only get their basic needs met. While the winners get all the goodies? Do you have any limits to that?

Don't forget: the workers have now a significant say in the management. It is most likely to result in a lower income-spread within companies, and in the society in general.
But for the losers, the State is to give opportunities of covering basic needs, and should give some money to take these opportunities (hence, the State gives some money so that the loser affords the cheap public housing - however, if he has a tad more money spared, he could take a more expensive house).
I have no problems with differences in life standards, as long as all the basic needs are well covered, and that uncertainty about immediate future is disappeared.

btw, there are a lot of basic needs that you didn't list. People need cash to pay for things they need. Life would such very bad if people could only get the free services that you listed.

The list wasn't exhaustive. Of course there is education as well, entertainment and culture should have free forms too (TV), there should be reductions for poor households to have good telecommunications etc.
However, the Disneylands, the jewels, the luxury homes, the high-end foods etc. definitely belong to how you choose to use your money. Like before, I take it the income spread will be quite low.

Who gets to own their own business?

Anyone who has an idea, and who has either resources to build it by himself, or who can convince the public Bank for a 0% business-creation loan.

After a business fails what happens? Is the owner responsible for the debt? Is he allowed to open up another business?

Nothing different than what happens today. Yes. Yes. However, making an individual business has incentives, since it gives opportunity to make big bucks while freelancing.

That sounds a lot like the system I proposed. How is it different?

Again, I did not throw your whole idea into the trash. The State as a 'super-client' rather than as a 'super-manager' has always been more appealing to me.

Then what happens to the employees?

They'll have to find jobs elsewhere, or go back to their studies. The State would need an efficient bureau coordinating the supply and demand of work, to make things faster.

[Odin]

I'm suprised Fezzie hasn't f*cked up this thread yeat.

My ideas of Anarcho-socialism is a way to get over the lag time Spiffor was talking about. If you have read the Sci-Fi novel Blue Mars you know the economic ideas I am talking about.

[Az]

I've tossed a couple of ideas into the air here. look for them a couple of pages back. If you really want to, I'll put more thought into it.

[Kidlicious]

Originally posted by Azazel
I've tossed a couple of ideas into the air here. look for them a couple of pages back. If you really want to, I'll put more thought into it.

We pretty much agree. I would tell you otherwise if it were not true .