Privatizatizing Water: Another World Bank Disaster

[Master Zen]

The government can also promote and/or create industries which are non-existant yet considered "strategic". This was done in Korea for good effect.

I'm all for this type of government intervention. The problem in many countries (like in Mexico) is that the government protected industries for TOO long until they became inefficient.

Soultion:

1) create industry

2) protect it (subsidies, tax, cuotas, etc.) until it matures and has good market share

3) stop protecting it, so it can go on its own

4) repeat process with different industry.

There you have it, effective government intervention in the economy! Long live democratic-socialism

[Master Zen]

Oerdin:

3rd world ****-holes???

They wouldn't be ****-holes partly if western colonial countries didn't screw them up for almost a century! Say what you say, but countries like Britain and France share MUCH of the blame for having left Africa the way it is.

[Dinner]

Originally posted by Master Zen
The government can also promote and/or create industries which are non-existant yet considered "strategic". This was done in Korea for good effect.

As far as I know all of the major Chabol were never government controled by the government. A few subunits of bankrupt companies were temporarially administered by the creditors and the government for a brief period until the bankruptcy was resolved but that's hardly the same thing as nationalizing an industry.

[Dinner]

Originally posted by Master Zen
Oerdin:

3rd world ****-holes???

They wouldn't be ****-holes partly if western colonial countries didn't screw them up for almost a century! Say what you say, but countries like Britain and France share MUCH of the blame for having left Africa the way it is.

There has been alot of work done by historians concerning the effects of colonialism and the reality is a mixed bag. In nearly every case the country at the end of colonialism was better off then prior to colonialism in that infatructure was improved (ports, roads, railroads, electricity, etc), they had an educated elite class, most of them had modern militaries, many of them benifeted from having standardized legal systems, and the economy was certainly better developed then prior to colonial times.

Sure there were problems with borders spliting different ethnic groups and the colonial powers used their colonies for raw materials but by and large it has been a half century of total mismanagement by the African political elites which has resulted in Africa being the ****-hole that it is.

[Lawrence of Arabia]

Soultion:

1) create industry

2) protect it (subsidies, tax, cuotas, etc.) until it matures and has good market share

3) stop protecting it, so it can go on its own

4) repeat process with different industry.

There you have it, effective government intervention in the economy! Long live democratic-socialism

They tried this in India with their car industry. They created the company, then protected it for 10 years, then 20, then 30, and it never got the economies of scale required to survive. IN the 50s, 60s, and 70s, Import substitution was the big thing, but protected industries never become efficient because there is no incentive.

[Dinner]

You can also ask the Chinese and Russians how well their state owned industries turned out. They've been dieing since the day they were born and many of them have pushed the state to the edge of bankruptcy by living subsidy to mouth as it were.

[Lawrence of Arabia]

Free markets are the road to success for many third world countries.

[Dinner]

Sadly many countries had to dragged through a half century of socialist misery before they figured that out. fortunately, once countries in Asia and Latin America started to figure out that socialism, protectionism, and statism wasn't going to cut the mustard they switched to capitalist democracies and there economies and standards of living have never been better. Like countries such as Korea, Maylasia, and Taiwan their going to need a half century of consistent good government policy and hard work before they'll catch up with the rest of the world but they'll do it if they stay focused. Even Afria could due it if they'd stop being seduced by the easy lies of socialism.

[Lawrence of Arabia]

Socialism is so popular because people think that they must protect their own people over others, even if it costs millions. To clean up this process will take some pain, but in the end, everyone will be better off.

[Berzerker]

Another case: Japan. We might think Japan is capitalistic, but in reality, they aren't. The government takes from productive sectors and gives to unproductive sectors as part of an overall policy, but all it does is divert resources from efficient companies to more inefficient companies. Might help explain why Japan has been in the doldrums for so long...

[Lawrence of Arabia]

Not only that, all of their consumers are getting royaly ripped off. Trade makes everyone better off.

[DanS]

Korea does a lot of government-sponsored incubation with tech companies, although I don't believe that they are government-owned.

Interestingly, they might sponsor a number of different small companies serving only one market.

Anyway, protection and long-term subsidies are unneccesary and counter-productive.

[Lawrence of Arabia]

Instead of subsidizing, they should tax the substitute.

[Dinner]

You can't charge a tax on one competetor and not the other. That's hardly fair.

[Berzerker]

You can't charge a tax on one competetor and not the other. That's hardly fair.

And counter-productive, the tax will serve as a subsidy to the favored business and punitive to the competitor.
And we know what often happens to the subsidised, bloated complacency.

LoA -

Not only that, all of their consumers are getting royaly ripped off. Trade makes everyone better off.

Isn't interesting that it appears the reluctance of France, Germany, and Russia to an invasion of Iraq is the trade deals these countries have made with Iraq? I've long thought that increased trade reduces the potential for war.