What are the pros and cons of state owned businesses?

[Az]

Originally posted by johncmcleod
I think state-run companies can work, but the question is, where's the incentive for the company to do well? If you make it so the members of the company get better wages (like I previously suggested without thinking) it's just like a private business. BTW, why is everyone talking about how the Soviet Union didn't work? It did work, for a while they were the second most powerful nation in the world.

The incentive is simple: don't work well? you'll be fired. You'll be without a job. The soviet union's problem was that it wasn't democratic. If it was democratic, it wouldn't spend so much resources on their military, and would've advanced their economy and science instead.


I still want to know how Sweden's system worked. Certain industries were state-run there and there wasn't a disaster. [/QUOTE]

[DAVOUT]

Originally posted by Spiffor

About the same way the citizens of a country decide of its future. This concept called "democracy" was very alien 250 years ago, and only a few illuminati thought it could work

Comparing the ability of the citizen to express preferences regarding the future of the country is entirely different than asking the same kind of question to the workers of a company.

The citizens has all his life to be acquainted with the main issues of his country; the workers on the contrary spend a limited time in a company (even in Japan the life time employment is no longer recongnized as an obligation), and we can really question the relevance of opinions about business plans or capital expenditures by people, even educated, with a short seniority.

The danger is that instead of increasing the democracy, it will just let the actual power to people in the top without any check and balance. This was sadly illustrated during the last twenty years, in this country, by the failure or scandalous appropriation of the bigest co-ops.

[DAVOUT]

Originally posted by Spiffor


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.

You have not addressed the question about the relations with the rest of the world.

State-fixed (and controlled) prices imply that the foreign trade is selected and controlled also by the state. This creates the conditions for a prosperous black market.

This system also discourages to the point of forbidding the foreign investments in the country.

The foreign currencies will be therefore in short supply, and the state will forbid the locals to export their money; serious limitation of freedom. But the state will also consider that people should not leave the country because this would weaken the work-force. This is a denial of freedom.

As all this is contrary to the very principles on which the EU was founded, a country would have to leave the EU before enjoying this socialist regime.

[DAVOUT]

The last interesting feature of this socialist regime would be the taxation system.

It can be assumed that the income taxe will not yield a lot, so the main sources of revenue for the state would be primarily the sales taxe and for a small part the import duties, all that being complemented by the totality of the companies profits.