Private vs. Public Sectors

[The Reasonable]

That's not full nationalization- that's welfare. It's still mostly private sector forces at work there. I'm talking about making grocery stores and the majority of housing public.

There's no need. Food stamps and public housing are enough. There's no full nationalization of healthcare required either. Supplemental healthcare can and does exist in many countries.

So essentially, you're in favor of a mixed market economy, like I am. But what is the boundary between things that the government shouldn't touch, things that the government should have a stake but not a monopoly in, and things that the government should have a monopoly in? It's a difficult question, I know.

And still, nobody has told me how government has the motive to save money without a profit motive.

[Divair]

There's no need. Food stamps and public housing are enough. There's no full nationalization of healthcare required either. Supplemental healthcare can and does exist in many countries.

So essentially, you're in favor of a mixed market economy, like I am. But what is the boundary between things that the government shouldn't touch, things that the government should have a stake but not a monopoly in, and things that the government should have a monopoly in? It's a difficult question, I know.

When coverage is critical to the lives of people, it should do what is necessary in said industry to achieve coverage. Whether it be food stamps to increase food coverage, or universal healthcare to achieve healthcare coverage.

It shouldn't be barred from competing in other industries, but it shouldn't be a priority either.

[Death Metal]

You are of course, assuming that there has to be one or the other, when a mix of both can be utilized in nearly every nonessential aspect, and a couple of the essential ones too.

In other words, it's not Private vs Public. It's Public PLUS Private.

I think pure private, pure public, and a mix are all terrible, you're talking to someone who believes in the abolition of class, state, and money. However, I think a full public sector, aka state capitalism, is more humane than a mixed or private system, perhaps not more eficient in terms of gaining wealth, but more humane.

So pure public is terrible... but pure public is great.

[Tubbsalot]

So pure public is terrible... but pure public is great.

He thinks it's greater than the alternatives he listed, yes.

[Dejanic]

I think pure private, pure public, and a mix are all terrible, you're talking to someone who believes in the abolition of class, state, and money. However, I think a full public sector, aka state capitalism, is more humane than a mixed or private system, perhaps not more eficient in terms of gaining wealth, but more humane.

So pure public is terrible... but pure public is great.

Did you even read what I said? I said all are terrible, but full public is the most humane, I never said it was ideal or great, just more humane than the other two options.

[The Reasonable]

Still, nobody has answered why governments have the incentive to be cost-efficient when there's no profit motive. Private companies lose money if they're inefficient, while governments can simply tax.

I think pure private, pure public, and a mix are all terrible, you're talking to someone who believes in the abolition of class, state, and money. However, I think a full public sector, aka state capitalism, is more humane than a mixed or private system, perhaps not more eficient in terms of gaining wealth, but more humane.

They tried that in the Soviet Union.

[Divair]

Still, nobody has answered why governments have the incentive to be cost-efficient when there's no profit motive. Private companies lose money if they're inefficient, while governments can simply tax.

Optimist's approach:
People are fundamentally good and it's all good.

Pessimist's approach:
People want to keep their job and/or get re-elected.

[Death Metal]

So essentially, you're in favor of a mixed market economy, like I am. But what is the boundary between things that the government shouldn't touch, things that the government should have a stake but not a monopoly in, and things that the government should have a monopoly in? It's a difficult question, I know.

For a stake: Case by case basis based on existing resources and viability of government return in investment by economic growth.

For monopoly: Infrastructure, law enforcement (including judges), and the military.

[Death Metal]

Still, nobody has answered why governments have the incentive to be cost-efficient when there's no profit motive. Private companies lose money if they're inefficient, while governments can simply tax.

I think pure private, pure public, and a mix are all terrible, you're talking to someone who believes in the abolition of class, state, and money. However, I think a full public sector, aka state capitalism, is more humane than a mixed or private system, perhaps not more eficient in terms of gaining wealth, but more humane.

They tried that in the Soviet Union.

And are doing it now in a little place called North Korea.

[Priory Academy USSR]

Still, nobody has answered why governments have the incentive to be cost-efficient when there's no profit motive. Private companies lose money if they're inefficient, while governments can simply tax.

Because the Daily Mail will come and rant at them if they see major crap-ups. Also, government budgets are generally fairly tight; they have to cost efficient to maintain an effective service.

[The Reasonable]

Optimist's approach:
People are fundamentally good and it's all good.

Pessimist's approach:
People want to keep their job and/or get re-elected.

The latter is the only thing that I could possibly think of...but raising taxes, even if it's for good causes, tends to not be so great in terms of election prospects. Running massive deficits isn't helpful either if you're unwilling to tax.

But, if democracy plays a role in keeping government services efficient, then why is it a truism that private sector = quality and efficiency? After all, they have the profit motive.

[Dejanic]

By the way, the idea that a public sector can have no profit motive and is only their to serve the people isn't true. Look at North Korea, the goverment their uses their state owned industry to try and gain a profit to keep the country afloat, they don't share all the money they gain to the population, do they? I don't think anyone, Left or Right, would claim North Koreas public industry is used to serve or improve the lives of the working citizens.

[Death Metal]

Still, nobody has answered why governments have the incentive to be cost-efficient when there's no profit motive. Private companies lose money if they're inefficient, while governments can simply tax.

Because the Daily Mail will come and rant at them if they see major crap-ups.

I was under the impression that a lack of major crap-ups wouldn't stop them from ranting anyway.

[Divair]

Optimist's approach:
People are fundamentally good and it's all good.

Pessimist's approach:
People want to keep their job and/or get re-elected.

The latter is the only thing that I could possibly think of...but raising taxes, even if it's for good causes, tends to not be so great in terms of election prospects. Running massive deficits isn't helpful either if you're unwilling to tax.

But, if democracy plays a role in keeping government services efficient, then why is it a truism that private sector = quality and efficiency? After all, they have the profit motive.

The profit motive is also why the private sector is driven by greed and doesn't offer as much coverage as is needed.

That's why we mix the sectors. Coverage AND quality.

[Priory Academy USSR]

By the way, the idea that a public sector can have no profit motive and is only their to serve the people isn't true. Look at North Korea, the goverment their uses their state owned industry to try and gain a profit to keep the country afloat, they don't share all the money they gain to the population, do they? I don't think anyone, Left or Right, would claim North Koreas public industry is used to serve or improve the lives of the working citizens.

Of course it can. Look at any state owned regulatory bodies. Chances are, they actually harm economic growth, but they do it to protect the citizens of the country.

[The Reasonable]

By the way, the idea that a public sector can have no profit motive and is only their to serve the people isn't true. Look at North Korea, the goverment their uses their state owned industry to try and gain a profit to keep the country afloat, they don't share all the money they gain to the population, do they? I don't think anyone, Left or Right, would claim North Koreas public industry is used to serve or improve the lives of the working citizens.

This also brings me to another important point: why has China benefited so much from market reforms? The reforms lifted no less than 400 million people, my family included, out of poverty, which brings into question the notion, so oft-repeated on NSG, that capitalism is evil and inhumane.

[Priory Academy USSR]

Because the Daily Mail will come and rant at them if they see major crap-ups.

I was under the impression that a lack of major crap-ups wouldn't stop them from ranting anyway.

Nah. They normally focus on Muslims stealing all the benefits money if the Government isn't messing something up.

[Priory Academy USSR]

By the way, the idea that a public sector can have no profit motive and is only their to serve the people isn't true. Look at North Korea, the goverment their uses their state owned industry to try and gain a profit to keep the country afloat, they don't share all the money they gain to the population, do they? I don't think anyone, Left or Right, would claim North Koreas public industry is used to serve or improve the lives of the working citizens.

This also brings me to another important point: why has China benefited so much from market reforms? The reforms lifted no less than 400 million people, my family included, out of poverty, which brings into question the notion, so oft-repeated on NSG, that capitalism is evil and inhumane.

Most communists will state that capitalism isn't evil. It's merely outdated, like mercantilism was before capitalism. Communists (and socialists) simply see communism as the next step, with capitalism having played it's role fairly well.

[Tubbsalot]

Still, nobody has answered why governments have the incentive to be cost-efficient when there's no profit motive. Private companies lose money if they're inefficient, while governments can simply tax.

Well it's obvious that the government operates with a reasonable degree of efficiency right now, so whether it's the case isn't in question. It's just how.

And the how is of course that while the government may not be economically accountable to its customers, it is politically accountable to the electorate. From there, everything proceeds as with private enterprise - business isn't efficient by use of magic pixie dust, it's efficient because internal rules and regulations are in force to prevent undesirable behaviour and promote the converse. People have to obey their superiors. If a) their superiors don't want them wasting money and b) their superiors have some way to know about waste which does occur, that waste will be minimised.

[Dejanic]

This is true, Marx himself praised Capitalism for the improvements it brought to society compared to Feudalism, we simply believe it is an outdated system.

[The Reasonable]

The latter is the only thing that I could possibly think of...but raising taxes, even if it's for good causes, tends to not be so great in terms of election prospects. Running massive deficits isn't helpful either if you're unwilling to tax.

But, if democracy plays a role in keeping government services efficient, then why is it a truism that private sector = quality and efficiency? After all, they have the profit motive.

The profit motive is also why the private sector is driven by greed and doesn't offer as much coverage as is needed.

That's why we mix the sectors. Coverage AND quality.

The thing is, what if the government is wasteful and inefficient, but lies about it to the voters, claiming that the waste and inefficiency is because of underfunding? How can anyone remedy that?

[Divair]

The profit motive is also why the private sector is driven by greed and doesn't offer as much coverage as is needed.

That's why we mix the sectors. Coverage AND quality.

The thing is, what if the government is wasteful and inefficient, but lies about it to the voters, claiming that the waste and inefficiency is because of underfunding? How can anyone remedy that?

It has happened before, gets uncovered by someone (usually individual workers or non-partisan organizations), and then there's a scandal. Inevitable that things like this will happen.

[Neutraligon]

The profit motive is also why the private sector is driven by greed and doesn't offer as much coverage as is needed.

That's why we mix the sectors. Coverage AND quality.

The thing is, what if the government is wasteful and inefficient, but lies about it to the voters, claiming that the waste and inefficiency is because of underfunding? How can anyone remedy that?

That is where you get into third party research, the media, and whistle blowers.

[Priory Academy USSR]

The profit motive is also why the private sector is driven by greed and doesn't offer as much coverage as is needed.

That's why we mix the sectors. Coverage AND quality.

The thing is, what if the government is wasteful and inefficient, but lies about it to the voters, claiming that the waste and inefficiency is because of underfunding? How can anyone remedy that?

The free press normally finds out any secrets, since most government employees aren't totally loyal mindslaves who'd turn down cash for facts. IIRC, this is what happened in the Soviet Union; information was made freer, and people found out how bad it was.

[Neo Art]

Things that are necessary for the safety, security, and well being of a populace should not be subject to the whims of the free market.

Indeed, the free market does gravitate towards the most profitable solution. And sometimes the most profitable solution is "scrap it all". Sometimes, when profit motive is concerned, the only winning move is not to play.

For example, the MBTA. Massachusetts public transit system. It's old. It's run down. It's expensive, and it loses billions. A few years ago, during the Romney administration (surprise surprise) when "let's run government LIKE A BUSINESS" was all the rage (this was the man who wanted to be president, by the way), he ordered a study to determine to what extent the MBTA, if operated LIKE A BUSINESS, could be made profitable. The study concluded...it can't.

Simply put, the public transit system in Massachusetts is too big, too sprawling, and serves too many poor communities to be profitable. If you raise prices, you'll just price out the people who need it the most. The cost, per person, of running the system does not, and can not be made to, exceed the fair revenue per person. Shut down lines, lose fairs, raise prices, lose customers. And if you tried to run it "like a business" then the first thing a business would do is shut it down, and sell off the parts. It is a money pit, and it will never be anything but. It can not be made profitable, at any price.

And the people of massachusetts have realized that they have two options, subsidize a money pit of the MBTA, or don't have public transit. We've opted for the former.

When dealing with public versus private, we have to accept one fact, no matter how critical a service is to the public good, if it can not be provided at a profit, the private sector will not provide it. Critical public services MUST be provided, regardless of whether they be provided at a profit or not.

To believe in the free market solutions, you must accept, as a premise, that sometimes the free market solution is to not provide the service at all, if that's the most economically viable choice. To believe in the free market is to accept that not EVERYTHING can be provided at a profit. And any person who bangs the drum of privitization has to ask themselves, is are we willing not live without it all?

Because if you privitize something, that may be exactly what happens. The private entity decides it's not worth the effort, and shutters the whole thing. The libertarian paradise always envisions private police, private firefighters, private roads, private courts, a paradise of efficient services. None of them ever stop to wonder what happens if those private entities determine "you know what? a private police force in your area just isn't profitable enough. Best of luck to you". They never quite seem to wonder, what happens when you're not worth it.