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  1. #1
    MoneyMan
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    Question Government in Business

    I was semi-debating this with a friend. I was talking about how the market and business could be better controlled if many goverment businesses were set up. For example, if they government set up a federal business to deal with any sort of mass product, be it produce, raw materials like steel and coal, or even various consumer goods. I believe this would make it so businesses with a lot invested into them, and by that I mean American citizens money and the thousands of workers they have, would be much safer. We all know about the bailout. If we had many businesses run by the government there is almost no chance for it to go bellyup because the government control the amount of money made in the company. The best thing is, the government would not have to solely focus on huge profits. It could spend time to improve worker benefits and compensation.

    What do you think? Should the federal government have a hand in the market? If so, how should they do it?

  2. #2
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    Re: Government in Business

    Several things here... One, you're talking about a more socialist/communist economy, eh? You're talking about government owning business in place of individuals, not in conjunction with, right?

    Second, the government very much has a hand in the market today, otherwise there wouldn't be bailouts.
    "And that, my lord, is how we know the Earth to be banana-shaped." ~ Monty Python


  3. #3
    MoneyMan
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    Re: Government in Business

    Quote Originally Posted by ladyphoenix View Post
    Several things here... One, you're talking about a more socialist/communist economy, eh? You're talking about government owning business in place of individuals, not in conjunction with, right?

    Second, the government very much has a hand in the market today, otherwise there wouldn't be bailouts.
    Yes, I am talking about where the government has ownership in some sectors of the market. That being said, free enterprise still would be easily optioned for many consumer goods.

    I know the government know has a hand in many companies due to bailouts, but when the time comes in the near future they say that will release them to be public enterprises. What I am saying is not the government buying out these companies, but starting up a company for a large resource, like oil or power,such as electrical or solar.

  4. #4
    Puck
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    Re: Government in Business

    Quote Originally Posted by MoneyMan View Post
    how the market and business could be better controlled if many goverment businesses were set up.
    Controlling the market - i.e. regulation defeats the purpose of the free market itself. Where the government tries to exert limits on how a business runs, it inevitably leads to propping up some businesses unaturally at the cost of competing ones. See also, collapse of banking industry.

    Quote Originally Posted by MoneyMan View Post
    For example, if they government set up a federal business to deal with any sort of mass product, be it produce, raw materials like steel and coal, or even various consumer goods. I believe this would make it so businesses with a lot invested into them, and by that I mean American citizens money and the thousands of workers they have, would be much safer.
    A governernment owned enterprise firstly, requires the wealth of others to operate, maintain and start - i.e. theft from tax. Secondly as government owned it has a specific stake in its success - one it has no business of having. One it has invested interest in maintaining at the expense of competition. Such stakes lead to subsidies - the use of government legislation to actively inhibit competing alternatives - especially when the free market trend is away from whatever the government has invested in. Stifling competition - the use of subsidies to enforce in essence one product over another is inimical to any industry. Energy needs will change - they type of energy produced and use will most likely change as well. Under free market economics these will happen as the need for these alternatives arise. The recent heavy spenditure of Arab Emirate nations - traditional heavy oil production countries -on alternative energy production for sale is evidence of this.

    Quote Originally Posted by MoneyMan View Post
    We all know about the bailout. If we had many businesses run by the government there is almost no chance for it to go bellyup because the government control the amount of money made in the company.
    This is socialism and inimical to the maintainence of wealth. Firstly the banks failure - the most heavily regulated industry short of being illegal, should be warning enough about what government ownership entails. The Education system would be another good example where it is precisely government policies that prohibit the education of all citizens. Something privatisation would allow.

    The message government ownership sends to business is this. This is my wealth - this wealth is not secure in this country. My production will be limited. My production will not be rewarded equal to what I endeavour. State ownership means state control of the industry. It means alternatives will not be allowed. Competition will be stifled. The value of goods will be set artificially - it will not be congruent with supply and demand. New technology will be suppressed. Workers skill level will increasingly be less productive in relation as such.


    Quote Originally Posted by MoneyMan View Post
    The best thing is, the government would not have to solely focus on huge profits. It could spend time to improve worker benefits and compensation.
    Where exactly are these benefits and compensation coming from if not the profit of the business the worker is in? That only leaves higher taxes elsewhere i.e. an even stronger message that ones personal wealth is not secure and is of only of value to those who are less capable.

  5. #5
    ODN Community Regular

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    Re: Government in Business

    Well, I think that when the government does run a business it should definitely not disallow competition. This happens sometimes and I can't say I care for it. So I've got no issue with the post office so long as other carriers are allowed to deliver mail as well. They should also be required to break even if there are competitors in the market or they would have an unfair advantage.

    In Washington state we have a state owned utility and it is run quite well. Power is cheap, reliable and when the rest of the west coast was having blackouts and crap from the Enron fiasco we were just fine.

    In one city the cable company was so bad the state opened its own and generally folks were happy about it because it didn't gouge them like the old company did.

    For me, government should run enterprise only when there is a need and the private sector is for whatever reason failing to get needed work done. Also sometimes you need the state to take risks on big projects and then hand it over to private interests so long as the state gets paid market value for it.

    A bit like Obama my stat/private philosophy is, what proves to work best.

  6. #6
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    Re: Government in Business

    Quote Originally Posted by Sigfried View Post
    Well, I think that when the government does run a business it should definitely not disallow competition. This happens sometimes and I can't say I care for it. So I've got no issue with the post office so long as other carriers are allowed to deliver mail as well. They should also be required to break even if there are competitors in the market or they would have an unfair advantage.
    Do you think tax revenues should be applicable to this break-even requirement?

    In Washington state we have a state owned utility and it is run quite well. Power is cheap, reliable and when the rest of the west coast was having blackouts and crap from the Enron fiasco we were just fine.
    Yes, the power was cheap because it was subsidized (read: tax-funded).

    In one city the cable company was so bad the state opened its own and generally folks were happy about it because it didn't gouge them like the old company did.
    Yes, because the new company was subsidized. The old company, being a private enterprise, could not (legally) steal money from people. It had to rely on people voluntarily paying it for its services. However, I'm sure it had also been granted a legal monopoly prior to the state creating its own company. Furthermore, only the state could create a competitor in this situation.

    For me, government should run enterprise only when there is a need and the private sector is for whatever reason failing to get needed work done.
    I need a million dollars. So far, the private sector has failed to get this needed work (providing me a million dollars) done. I propose that the government start an enterprise to give me what I need.

    Also sometimes you need the state to take risks on big projects and then hand it over to private interests so long as the state gets paid market value for it.
    I fail to understand why you deem it necessary for the state to "take risks" on "big projects". Also, how does one determine the market value for something unique, like (presumably) a "big project"?

    A bit like Obama my stat/private philosophy is, what proves to work best.
    Yet that depends on your criteria for "working", doesn't it? Different people have different ideas of what "works" and what "doesn't work".
    “When men hire themselves out to shoot other men to order, asking nothing about the justice of their cause, I don’t care if they are shot themselves."

    - Herbert Spencer

  7. #7
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    Re: Government in Business

    I think that is a good idea, the government could make more businesses with their bailout money, not for the sake of having the business, but rather the oppurtunity for job creation, and the world needs more jobs. So, they could make a few businesses and then make them public so that they could engage in the market, and then once they are established and turning a profit investors woudl want to buy into them, making them money all the while, and comapnies that make money increase in value. That will lead to a demand for them, and they will have a knock on effect to suppliers of them, rasing their value too, and there would be incresed investment, and better life for all.
    !! Servant of Gaia !!

 

 

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