Successful state run enterprise

On an historical note in the UK (but not just the UK), it's worth pointing out that at least some of the early nationalizations were carried out because the private sector simply failed to properly modernize, update and invest - for example the steel industry, which massively increased productivity after the immense drag factor of the private sector was removed - and that it wasn't just parties of the left who nationalized: for example, Rolls-Royce was nationalized by Ted Heath in 1971, again because of private sector short-termism and incompetence. And if it really is as awful as its critics suggest, it certainly isn't so awful that governments of the right and centre-right don't resort to it when the private sector implodes or they need the work to be done properly: Bush and US airport security in 2001 (thanks,Tea Party comrades!), the partial renationalizations of the banks in 2007-8 by governments of all complexions, East Coast mainline here by a centre-right New Labour government.

Nationalization has always worked. The real question is why it wasn't accompanied by socialization, as opposed to being left in its invariable imago form - dirigisme-style public boards, initially often run by the same private sector bureaucrats who ran their industries and companies into the ground in the first place.

Originally posted by finnegan
I am tired of American ideologues repeatedly parroting claims about public sector enterprises and government planning in the economy. I have decided to refer to one useful article - written in 2010 - that sets out some of the achievements of the French public sector. [quote]Even after repeated rounds of privatization, a substantial share of France’s econom ...[text shortened]... e market orthodoxy which presently holds us all (especially in the US and the UK) in its thrall.

in at least one sense, public sector projects ought to always succeed, in that they can and almost always do distort the system in their own favor. In addition, they can and often do use up resources, and get additional funding from the unsuspecting taxpayer, often from people opposed to their notions and methods.

In most cases, when public sector goods are transferred to the private sector (privatized), there remain substantial distortions which hinder the free market operation via regulations which limit or make competition impossible.

The "successes" of state run operations seem to me to be somewhat "fixed" as are the successes of mob gambling operations.

Originally posted by normbenign
in at least one sense, public sector projects ought to always succeed, in that they can and almost always do distort the system in their own favor. In addition, they can and often do use up resources, and get additional funding from the unsuspecting taxpayer, often from people opposed to their notions and methods.

In most cases, when public sector goo ...[text shortened]... un operations seem to me to be somewhat "fixed" as are the successes of mob gambling operations.

Struggling for a rational response to the evidence, our ideological hero can be relied on to run away from the evidence and dive into the long grass of conspiracy theory.

Originally posted by finnegan
Struggling for a rational response to the evidence, our ideological hero can be relied on to run away from the evidence and dive into the long grass of conspiracy theory.

Doesn't it make sense that government-run businesses get more funding from the government? Our that tax-payer money would be an advantage for them over private sector businesses that don't benefit from tax-payer cash? Or that government-run businesses could have loopholes that benefit them in ways the private sector wouldn't see?

Originally posted by vivify
Doesn't it make sense that government-run businesses get more funding from the government? Our that tax-payer money would be an advantage for them over private sector businesses that don't benefit from tax-payer cash? Or that government-run businesses could have loopholes that benefit them in ways the private sector wouldn't see?

What that post does, and many Americans seem devoted to doing, is to debate an empirical topic as though it were an exercise in pure reasoning. Your speculations make plenty of sense but have the status only of a hypothesis, which remains to be tested against reality. I have not argued that government is perfect or flawless nor that governments consistently operate brilliant businesses and services. I have argued differently and pointed out the practical, real world, it actually happened examples from post war France to say that government can plan well and effectively, that government can run businesses well and for the public good.

Turning to pure rational thinking is a device to avoid dealing with the empirical evidence. In that way, Americans protect their ideological beliefs against reality testing.

Take one example, Compare and contrast the way France handled the closure of its coal mining industry with the way Thatcher's Britain handled the same process. That is not hypothetical or abstract or based on something amusing that Locke wrote a few centuries back or dependent on the attitudes of some founding fathers or for that matter the ideologies of Left or Right. No it is a factual comparison for which the results are available and summarised above.

Originally posted by finnegan
What that post does, and many Americans seem devoted to doing, is to debate an empirical topic as though it were an exercise in pure reasoning. Your speculations make plenty of sense but have the status only of a hypothesis, which remains to be tested against reality. I have not argued that government is perfect or flawless nor that governments consistentl ...[text shortened]... Right. No it is a factual comparison for which the results are available and summarised above.

Your post is completely logical. It's just that your response to Norm seemed like you believed it was on par with a stereotypical conspiracy nut, like those who argue the first moon-landing was a hoax. But in light of your last post, combined with the others, it seems that you have a rock-solid argument.

Originally posted by finnegan
Struggling for a rational response to the evidence, our ideological hero can be relied on to run away from the evidence and dive into the long grass of conspiracy theory.

I did not run from anything, or resort to conspiracy theory. The facts are that government good is always going to be funded by the people, either by taxation or by devaluation of money via inflation. There is no need to be profitable, or even cost neutral, so government enterprises have none of the economic constraints which private, for profit businesses have. Minus those constraints, they tend to be rather reckless in projecting their desires, as was the case in the housing crisis from 1972 through the eventual crash of banks in 2008. With the government bully pulpit, it is often able to deflect the blame for its bad policies onto others, usually in the private sector, people who can't raise taxes or print money.

Extensive borrowing and deficit spending allow governments, and to a lesser degree large corporations, to prolong the appearance of everything being good, when the same conditions in a small business or household would be bankruptcy.

Nobody asks the same questions about government enterprises as are asked of private entities. It is often presumed that they are for the public good, even when some portions of that public are victimized, or at least neglected or left out of the so called good.

Originally posted by finnegan
What that post does, and many Americans seem devoted to doing, is to debate an empirical topic as though it were an exercise in pure reasoning. Your speculations make plenty of sense but have the status only of a hypothesis, which remains to be tested against reality. I have not argued that government is perfect or flawless nor that governments consistentl ...[text shortened]... Right. No it is a factual comparison for which the results are available and summarised above.

You are quite right that rationalism is in conflict with empiricism. The question is which is more reliable and not contradictory.

Both empiricism and rationalism may produce wrong results as a result of leaving out a single variable. It is the rational mind that distinguishes men from beavers, who can build a dam, but aren't rationally able to understand why it works or doesn't work on a given river. Sometimes men can't understand why a beaver dam works, but empirically it does. In most cases the rationalism of engineers does discover the practical empirical reasons a beaver dam works.

The point of all this is that empirically contradictory results never invalidate rational conclusions. Rationalists will rationally seek the missing variable.

Originally posted by vivify
Doesn't it make sense that government-run businesses get more funding from the government? Our that tax-payer money would be an advantage for them over private sector businesses that don't benefit from tax-payer cash? Or that government-run businesses could have loopholes that benefit them in ways the private sector wouldn't see?

Note that Fin doesn't answer even one of your three very good questions. He deflects, and attacks you with arcane arguments about empirical proof in opposition to rational thinking. Rational thinking doesn't ignore measured truth (empirical proof), but searches for the missing factors which seem to put rationalism and empiricism in conflict.

Originally posted by normbenign
I did not run from anything, or resort to conspiracy theory. The facts are that government good is always going to be funded by the people, either by taxation or by devaluation of money via inflation. There is no need to be profitable, or even cost neutral, so government enterprises have none of the economic constraints which private, for profit businesse ...[text shortened]... portions of that public are victimized, or at least neglected or left out of the so called good.

You run from reality in every post.

You want to build your argument on the ideal private sector success compared with the ideal pubic sector failure. Any idiot can run up a list of failures or triumphs in either sector.

I have not attempted to argue that all governments are good, nor all public sector enterprises, nor all economic plans. I have only demonstrated that some can be and have been, by reporting the examples above.

What you want to argue is that all public / government sector activity is deeply flawed and a failure, or the result of cheating in some way. That is an extreme position, ideologically driven, which relies on a jaundiced account.

I say that my examples demonstrate you to be wrong. For example, the reality is that the French government got a perfectly acceptable return on its investments (as described) and at the same time also obtained a range of social benefits which the private sector would not even consider interesting let alone attempt to deliver. So there was no waste or misuse of taxpayer funds, not at all. Obviously there was investment of other people's money which was then repaid with interest, but what does a private business do only borrow to invest? Except the private sector routinely fails to pay back, fails to give a fair return, fails to compensate for the social costs and environmental harm imposed, routinely demands direct and indirect taxpayer subsidies and routinely fails to pay or underpays taxes.

You misunderstand my contrast of "pure reason" with "empiricism." I intend to say that your arguments are speculative and lack empirical justification; you rely on hot air, smart alec easily uttered allegations that lack support; politically familiar slogans about "the government bully pulpit" as though you would want a world without government, when what you vote for routinely is corrupt government in the pockets of private corporations, like say Exxon and New Jersey.

http://www.nytimes.com/2015/02/28/nyregion/exxon-mobil-settles-with-new-jersey-over-environmental-damage.html

Originally posted by finnegan
You run from reality in every post.

You want to build your argument on the ideal private sector success compared with the ideal pubic sector failure. Any idiot can run up a list of failures or triumphs in either sector.

I have not attempted to argue that all governments are good, nor all public sector enterprises, nor all economic plans. I have on ...[text shortened]... times.com/2015/02/28/nyregion/exxon-mobil-settles-with-new-jersey-over-environmental-damage.html

norm is a proponent of praxeology which holds that a priori beliefs derived from "logical" reasoning is superior to observations of empirical reality. Thus, his economic assertions can never be proven wrong by facts no matter how inconvenient to his axioms.

Originally posted by no1marauder
norm is a proponent of praxeology which holds that a priori beliefs derived from "logical" reasoning is superior to observations of empirical reality. Thus, his economic assertions can never be proven wrong by facts no matter how inconvenient to his axioms.

Yes both of his heroes - Rand and Mises - claim to have constructed a complex theory from fundamental axioms. Mises for example claims to have constructed his economic theories on the principles of psychology. The fact is that there is no such construction - the claims are spurious and not supported by the work of those two heroes, who neither assembled a coherent body of axioms nor erected any serious structure on their foundation. In addition, when confronted (in several threads) with evidence that such a process is intrinsically impossible, norm runs for the hills. It is a type of philosophical enterprise that engaged great minds, such as Bertrand Russell, for many years before they realised (and it was proved to them) that it is a logical nonsense. Instead, what we see is an impressive seeming claim that does not stand up to examination. When Rand and Mises make such claims, that is already sufficient information to demonstrate that they are fraudulent clowns.

This is the norm who wants to lecture me on the nature of reason.

Originally posted by finnegan
What you want to argue is that all public / government sector activity is deeply flawed and a failure, or the result of cheating in some way. That is an extreme position, ideologically driven, which relies on a jaundiced account.

Not so at all. I argue that public or government goods are assisted in appearing to be so in a number of ways. They are usually/almost always monopolies. If not pure monopolies, they get monopolistic benefits. When they are obviously failures, it is in spite of these self created advantages.

When a small private entrepreneur fails, it is his investment that is lost, and this inspite of the fact that government taxed his operation when it was profitable, and did little or nothing to assist it. Large corporations, such as big banks or automakers can count on being assisted from mismanagement, and so behave more irresponsibly than smaller enterprises. Government enterprises tend to behave even less responsibly. Witness that barely clear of bankruptcy, city of Detroit officials want to raise their salaries.

No, not all government entities are failures, but there are real reasons why failure or incompetence is more likely than in private enterprises, at least those run by the actual owners.

Originally posted by normbenign
Not so at all. I argue that public or government goods are assisted in appearing to be so in a number of ways. They are usually/almost always monopolies. If not pure monopolies, they get monopolistic benefits. When they are obviously failures, it is in spite of these self created advantages.

When a small private entrepreneur fails, it is his investme ...[text shortened]... ncompetence is more likely than in private enterprises, at least those run by the actual owners.

Fine so you concede - in your backhanded manner - there are actually advantages to public ownership of enterprises. If I was a British coal miner in the Eighties, I would have wished for the advantages enjoyed by a French coal miner in the Eighties. Obviously a neoliberal cares nothing for most stakeholder interests - employees least of all - but public enterprises are obliged to balance them carefully and accountably.

When a small private entrepreneur fails, it is his investment that is lost, and this inspite of the fact that government taxed his operation when it was profitable, and did little or nothing to assist it.

No, for all that the entrepreneur has often risked his own wealth, and even his home, at an early stage of evolution. the reality is that a business cannot expand without external investment and that, together with loan debt and debts to suppliers, are very much greater than the sums typically lost by the business owner who also, remember, will have sheltered much of his personal resources through limited liability. I am sorry to remind you of a golden rule for any entrepreneur - make sure you risk other people's money as much as possible while keeping the rewards to yourself. Gearing up is a technique to maximise the upside potential wins, while not caring so much about the downside risks.

Every business enjoys all sorts of benefits from national and local government. The idea that taxes paid from profits are not justified by benefits received is just right wing ideology and a plain lie.

I cannot comment on Detroit public salaries but I do notice that our bankrupt banking system continues to fork out chunky salaries and bonuses and rewards to their executives. Only Iceland has really tried to call them to account for virtually bankrupting us all and nearly destroying our social welfare systems.

Large corporations, such as big banks or automakers can count on being assisted from mismanagement, and so behave more irresponsibly than smaller enterprises.

So by your account, the private sector has difficulty functioning responsibly and frequently calls on government for support or, indeed, rescue. One has to ask why it is then that government obtains so little in return - not even good manners it seems. One has to ask why government cannot sometimes offer more responsible, more accountable and more effective management than the mediocrities who currently preside over our larger corporations, sitting on their immense piles of cash without investing it properly or without returning cash to their shareholders or else burning it in futile, doomed mergers and acquisitions.

As for your confidence that competence is a feature of the private sector more than the public, this again ignores for example the evidence of nepotism and egomania that ruins the leadership of so many private enterprises, and ignores the evidence that executives are paying themselves excessive and still growing rewards at the expense of their shareholders, and ignores the extent to which performance related rewards are paid out for good luck far more than for skill or judgement.

Sorry norm, but the more you struggle the more you sink into the sands.