25 Oct 10
2 edits
Most nationalisation is aimed at industries that are considered to have a public service value and that could or would not be run at a profit. Most nationalised industries therefore must be funded from taxation. If self-sufficient, profitable industries and companies (eg, WalMart, CocaCola) were nationalised, could the profits from these enterprises be used by the state to finance everyone's dream of low taxes, low deficits and generous public services, pensions and benefits?
Incidentally, I'm not arguing this would be a just or virtuous thing to do - I'm merely enquiring about posters' views on its practicality.
25 Oct 10
Originally posted by TeinosukeThats not necessarily true. Quite often industries are nationalized for other reasons:
Most nationalisation is aimed at industries that are considered to have a public service value and that could or would not be run at a profit.
1. In order to make a profit for the government and thus reduce the tax burden and make a natural resource more fairly distributed to the populace.
2. In order to encourage beneficial policies rather than profitable ones (even though the overall business is still profitable).
3. In order to safeguard essential services.
4. In order to avoid excessive profit taking by the industry (as is common with private health or education for example).
25 Oct 10
1 edit
Originally posted by TeinosukeThe problem is, though, that they may not remain profitable at all and almost certainly would not maintain the same level of profitability. Without the profit motive, the directors (in this case, bureaucrats) running the companies would have utterly no incentive to innovate, to keep ahead of the curve and the try and outwit the K-marts and Pepsis of the World who are constantly nipping at their heals. Lazy bureaucrats would care only about satisfying the faceless and inefficient management structure and politicians would use the public companies to buy votes by, say, subsidizing wants of their constituents ("back to school special: everyone in my district gets a laptop for $100; courtesy of Congressman X; oh, and vote Congressman X Nov. 2!" ).
Most nationalisation is aimed at industries that are considered to have a public service value and that could or would not be run at a profit. Most nationalised industries therefore must be funded from taxation. If self-sufficient, profitable industries and companies (eg, WalMart, CocaCola) were nationalised, could the profits from these enterprises be use ust or virtuous thing to do - I'm merely enquiring about posters' views on its practicality.
In a couple of decades, Walmart would be just another money losing, taxpayer subsidized entitlement program.
25 Oct 10
Originally posted by sh76Yep, and I think a lot of Americans would just boycott the nationalized business to boot.
The problem is, though, that they may not remain profitable at all and almost certainly would not maintain the same level of profitability. Without the profit motive, the directors (in this case, bureaucrats) running the companies would have utterly no incentive to innovate, to keep ahead of the curve and the try and outwit the K-marts and Pepsis of the World w ...[text shortened]... decades, Walmart would be just another money losing, taxpayer subsidized entitlement program.
26 Oct 10
Originally posted by sh76One could maintain bonuses for the directors, payable on strictly performance-related grounds (unlike the situation in modern capitalist enterprises where people at the top of the company seem to get bonuses no matter what - which is hardly an incentive to performance!). Bonuses would also be paid to staff lower down the company who contributed to its profitability. The managers would be guaranteed independence in terms of market strategy, etc; the sole constraint would be that only a certain percentage of the company's profits could be kept by the company; the remainder would be the government's. In short, as much as possible of the structure of a privately owned business would be imitated, but profits beyond the level required to satisfy staff via decent salaries and bonuses would be channelled into state coffers.
The problem is, though, that they may not remain profitable at all and almost certainly would not maintain the same level of profitability. Without the profit motive, the directors (in this case, bureaucrats) running the companies would have utterly no incentive to innovate, to keep ahead of the curve and the try and outwit the K-marts and Pepsis of the World w ...[text shortened]... decades, Walmart would be just another money losing, taxpayer subsidized entitlement program.