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Debate Topic: Poltical/Economic Theory (Little Upsilon)

Simcountry: Simcountry Bulletin Board  Debate Topic: Poltical/Economic Theory (Little Upsilon)

Zetetic Elench dam Kahveh

Thursday, July 3, 2008 - 09:44 am Click here to edit this post
JF: "The state corporation would be vastly different. In practice, the right to unionize or perhaps even to change jobs without approval may not be there."

Nonsense. That might be true in a communist economy, but in all West European socialist countries, state corporations are governed by the same labour laws as private corps.

Just take a look at the chaos caused in Britain when Maggie Thatcher sought to take on the Unions of the (then National) Coal Board.

Regarding your comment that workers in privately run corporations are free to change jobs if unhappy with their employer "whether [the new job is] in the same kind of business or a different one" is also inaccurate. I used to work for an privately-run optical fibre company and my contract forbade me from working for another company in the same sector for five years after leaving. Fortunately, in the UK that clause is unenforceable and if they had tried to enforce it, I could have taken it to the European Court of Human Rights. In any case, as I spent the next five years at uni, so it never came up.

Re: workers becoming shareholders.

Yep, great idea. Give them a stake in the business and they'll care more about it. I'm sure I've posted about cooperatives further up, that's taking it almost as far as it can go. The company I used to work for had a slightly different scheme. It shared out some of its annual profits and even though I was only on a one-year placement contract, my share was no smaller than the site manager's. Thankfully, despite it being a terrible year financially for the company, the profit-share scheme also paid out for meeting targets on recycling, pollution-control and factory cleanliness so it was still enough to more than double one of my pay cheques!

"A market economy run by the laws of supply and demand is far more efficient".

True, but only up to a point. Britain's rail network was "designed" by the forces of supply and demand (mostly demand as there was no supply until it was built). As a result, many large cities were connected by two, three, sometimes four different companies. None of these could turn a significant profit on journeys between the two cities as there was too much competition resulting in significant waste and inefficiency (NOTE: inefficiency at the national level - the individual companies were probably fairly efficient entities). Likewise a number of significant towns were completely missed by the rail network because it wasn't deemed profitable enough to connect to them. Not so much of a problem today, but quite a disadvantage when the next best thing was a horse and carriage.

A similar situation now exists with the bus network in Manchester which is provided by private companies. Nearly all the routes serve Piccadilly Gardens and Piccadilly Station and a few suburbs for which it is considered profitable enough to connect to. There is far too much competition on these routes and the bus congestion around Piccadilly Gardens is appalling leading to excessive delays and more inefficiency.

Contrast that with the situation in Liverpool and London. The bus network is again provided by private companies, but the routes are set by the local transport authorities ensuring that most areas are connected and competition is not excessive on any one route.

The point is, sometimes state-intervention can be very healthy in a market economy. The forces of supply and demand are not often very good at providing a balanced service (see also my comments on the Irish potato famine). Americans seem to fear it, equating even modest intervention with wholescale communist command economies.

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