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The people who create those organizations do so with an expectation that they will earn a lot of money in the (not at all certain) case if they succeed and cont

The people who create those organizations do so with an expectation that they will earn a lot of money in the (not at all certain) case if they succeed and continue to own them until they sell their ownership to whomever they want at a time and a price they feel is right. It's not just a thing they would like to have, that expectation is the only reason for trying to launch such a company. If there is a credible threat of nationalization (e.g. the government has nationalized similar organizations lately or even asserted that they are considering such things), then people who have the will, skill and capital to start financial services will rather do that elsewhere, where they have larger chances of a positive outcome for them. Safe and predictable legal environment - an expectation that your business won't be taken away from you - is a strong influence on the amount of investment and entrepreneurship a country gets; and more investment and entrepreneurship generally does result in more wealth for all of society even accounting for the share of the created wealth that's taken by the owners/investors.

endisneigh 5y ago
You haven't really spelled out the issue, though. From your comment it sounds like nationalizing something is bad because the entrepreneurs won't make money? If the business being nationalized is one that is a drain on the economy in some sense, then why wouldn't it be good for the country to nationalize it? I say "nationalize" broadly here, not necessarily in the way China implemented things. It could even be the creation quasi-public organization like Amtrak. Obviously the key here is not to be as heavy-handed as China and to not nationalize everything, lest we be a communist state. However there are definitely things, like banks, that should have a public competitor.
- jhugo 5y ago
  > From your comment it sounds like nationalizing something is bad because the entrepreneurs won't make money? Nationalizing something is bad because the next entrepreneurs in that field know they won't make money, so they won't build.
  - endisneigh 5y ago
    I’m not following. My original comment called for the nationalization of things that drain the entire economy. This implies said companies have already “won,” and that they’ve made (a lot of) money. Your comment would make more sense if I was calling for the transitioning to communism. Uber, for example wouldn’t be nationalized because its product type hasn’t become so pervasive that a majority of Americans use it. Debit cards and their ilk have.
    - jimkleiber 5y ago
      I believe a lot of times in the US, those companies become public utilities [0], which are publicly owned through stock (or privately owned)[1] but are highly regulated by the government and also I think exempt from laws prohibiting monopolies[2]. I'm not sure what's the process of a company going from a regular public company to a public utility though. [0]: https://en.wikipedia.org/wiki/Public_utility https://en.wikipedia.org/wiki/Public_utility [1]: https://marketrealist.com/p/are-utility-companies-public-or-private/ https://marketrealist.com/p/are-utility-companies-public-or-... [2]: https://www.law.cornell.edu/wex/public_utility https://www.law.cornell.edu/wex/public_utility
    - rkk3 5y ago
      > the nationalization of things that drain the entire economy. Not sure how you would draw this line. Do we nationalize the apple/google app stores because they are taking 30% cuts? Or Visa/Mastercard/Stripe because they take a cut on every transaction?
  - rkk3 5y ago
    > Nationalizing something is bad because the next entrepreneurs in that field know they won't make money, so they won't build. There is noting implicit that means they don't make money. The process of nationalization doesn't have to result in 0 compensation, it could be run like any other buyout. That being said being government run has its own issues.
    - jhugo 5y ago
- dageshi 5y ago
  If you're an entrepreneur why would you attempt anything in any industry likely to be nationalised?
  - endisneigh 5y ago
    Why wouldn’t you? Nationalization does not imply profit is impossible. Not to mention the purpose of the government is to serve its citizens, not just entrepreneurs.
    - dageshi 5y ago
      Probably because raising money would be harder, would investors or venture firms weigh projects in industries likely to be nationalised lower? Probably. Any industry likely to be nationalised would have an overall depressive effect on the number of risks taken on new products and services in that industry.
      - endisneigh 5y ago
        Yes, which is why I mentioned in my original comment that only services that are a “drain on the economy” should be nationalized.
  - toomuchtodo 5y ago
    This assumes the ambitious are driven purely by explosive profit potential. Counterexamples are abound.
dirtyid 5y ago
>then people who have the will, skill and capital to start financial services will rather do that elsewhere, where they have larger chances of a positive outcome for them. Dan Wong, one the more competent China tech watchers surveying local entrepreneurs on current crackdown: "They would love to have the problems of Jack Ma" because it means they've made it really big. China isn't a dinky market, the incentives are massive, founders will settle being 100s millionaires instead of billionaires if that's the size that keeps regulator scrutiny at bay. Also the fact that PRC is willing to break incumbents via regulatory crack down is creating opportunities not seen in markets effectively captured by huge players. > rather do that elsewhere Instead of "elsewhere", it's really about "do something else". PRC doesn't consider draining the best and brightest into a massive service blackhole like adtech or fintech worthwhile. It's crushing incentivization structure of soft tech to make hard tech more appealing. Beijing wants semiconductors and turbojets that can eventually be exported world wide, not a more profitable ANT pyramid scheme that will likely be a drain on domestic market.

endisneigh 5y ago

You haven't really spelled out the issue, though. From your comment it sounds like nationalizing something is bad because the entrepreneurs won't make money? If the business being nationalized is one that is a drain on the economy in some sense, then why wouldn't it be good for the country to nationalize it? I say "nationalize" broadly here, not necessarily in the way China implemented things. It could even be the creation quasi-public organization like Amtrak. Obviously the key here is not to be as heavy-handed as China and to not nationalize everything, lest we be a communist state. However there are definitely things, like banks, that should have a public competitor.

jhugo 5y ago
> From your comment it sounds like nationalizing something is bad because the entrepreneurs won't make money? Nationalizing something is bad because the next entrepreneurs in that field know they won't make money, so they won't build.
- endisneigh 5y ago
  I’m not following. My original comment called for the nationalization of things that drain the entire economy. This implies said companies have already “won,” and that they’ve made (a lot of) money. Your comment would make more sense if I was calling for the transitioning to communism. Uber, for example wouldn’t be nationalized because its product type hasn’t become so pervasive that a majority of Americans use it. Debit cards and their ilk have.
  - jimkleiber 5y ago
    I believe a lot of times in the US, those companies become public utilities [0], which are publicly owned through stock (or privately owned)[1] but are highly regulated by the government and also I think exempt from laws prohibiting monopolies[2]. I'm not sure what's the process of a company going from a regular public company to a public utility though. [0]: https://en.wikipedia.org/wiki/Public_utility https://en.wikipedia.org/wiki/Public_utility [1]: https://marketrealist.com/p/are-utility-companies-public-or-private/ https://marketrealist.com/p/are-utility-companies-public-or-... [2]: https://www.law.cornell.edu/wex/public_utility https://www.law.cornell.edu/wex/public_utility
  - rkk3 5y ago
    > the nationalization of things that drain the entire economy. Not sure how you would draw this line. Do we nationalize the apple/google app stores because they are taking 30% cuts? Or Visa/Mastercard/Stripe because they take a cut on every transaction?
- rkk3 5y ago
  > Nationalizing something is bad because the next entrepreneurs in that field know they won't make money, so they won't build. There is noting implicit that means they don't make money. The process of nationalization doesn't have to result in 0 compensation, it could be run like any other buyout. That being said being government run has its own issues.
  - jhugo 5y ago
dageshi 5y ago
If you're an entrepreneur why would you attempt anything in any industry likely to be nationalised?
- endisneigh 5y ago
  Why wouldn’t you? Nationalization does not imply profit is impossible. Not to mention the purpose of the government is to serve its citizens, not just entrepreneurs.
  - dageshi 5y ago
    Probably because raising money would be harder, would investors or venture firms weigh projects in industries likely to be nationalised lower? Probably. Any industry likely to be nationalised would have an overall depressive effect on the number of risks taken on new products and services in that industry.
    - endisneigh 5y ago
      Yes, which is why I mentioned in my original comment that only services that are a “drain on the economy” should be nationalized.
- toomuchtodo 5y ago
  This assumes the ambitious are driven purely by explosive profit potential. Counterexamples are abound.

dirtyid 5y ago

>then people who have the will, skill and capital to start financial services will rather do that elsewhere, where they have larger chances of a positive outcome for them. Dan Wong, one the more competent China tech watchers surveying local entrepreneurs on current crackdown: "They would love to have the problems of Jack Ma" because it means they've made it really big. China isn't a dinky market, the incentives are massive, founders will settle being 100s millionaires instead of billionaires if that's the size that keeps regulator scrutiny at bay. Also the fact that PRC is willing to break incumbents via regulatory crack down is creating opportunities not seen in markets effectively captured by huge players. > rather do that elsewhere Instead of "elsewhere", it's really about "do something else". PRC doesn't consider draining the best and brightest into a massive service blackhole like adtech or fintech worthwhile. It's crushing incentivization structure of soft tech to make hard tech more appealing. Beijing wants semiconductors and turbojets that can eventually be exported world wide, not a more profitable ANT pyramid scheme that will likely be a drain on domestic market.