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Your idea assumes the state will run it as efficiently as private businesses would. That sounds nice in theory but in the vast majority of cases isn't the reali

Your idea assumes the state will run it as efficiently as private businesses would. That sounds nice in theory but in the vast majority of cases isn't the reality of it.

bobthepanda 3y ago
There’s a mixed track record. Saudi Aramco for instance became the largest oil operator generating lots of profit for its home country. Norway’s Statoil is another.
- dmix 3y ago
  Wasn't Saudi Aramco a 50/50 arrangement with the private American company for most of it's history when it was developing the main oil fields? I believe the companies agreed to this because the Saudi's threatened to nationalize it completely. The Norwegian one was a gov corporation from the beginning though and was there from the beginning of exploration/development. There can also be a long-term benefit that post-nationalized orgs from their past state as private structures, living off the fat as they say. The existing talent/prior knowledge/industry relationships are still there, just with a new owner and more capital. Similar to NASA absorbing a well established and already highly productive private industry / university researcher pool, and merging them under one umbrella and then having a golden era of productivity before sliding back into a more normal public agency. That sort of productivity naturally fades over time as the gov bureaucracy increasingly takes over and the natural constraints of politicized funding. It helps if your business is a slow changing monopoly industry like oil/gas though.
- williamcotton 3y ago
  And economic ideology is less important to that mixed track record than is generally believed, regardless of which camp people subscribe.
digdugdirk 3y ago
I'm always intrigued/entertained/confused by this line of reasoning. What companies have you worked for that were highly efficient and made rational long-term strategic decisions? I'm not saying a state entity would be inherently better (though a case could be made for the benefits of long-term thinking that are more built-in) but I'd like to see the evidence that corporate businesses are inherently better themselves.
- isignal 3y ago
  Individual corporate entities have their own flaws but the competition between them is a structure that eventually forced inefficient entities out. So Intel eventually finds themselves overtaken by a TSMC. But with govt entities, no such structure exists.
  - gota 3y ago
    I understand the argument, but it seems large companies are seldom, or never, overtaken by others. They entrench themselves by regulatory capture, advantages of economy os scale, and survive virtually indefinitely even in shrinking markets If we don't count "missing the boat" (as happened regarding search/mobile/social media), which arguably happens because of disruption from the newcomers and not mismanagement/underperformance at the oldtimers, what large companies have failed in the last 20 years? Core to this point is that mega companies are only at threat from disruption, and it doesn't matter whether they're private or state owned for that (I am of course ignoring companies that go under from criminal, as in corruption, mismanagement. I guess those are much more prevalent between the state-owned, for obvious reasons)
  - pg_1234 3y ago
    The state can own the capital/resource and make multiple corporate entities compete (efficiently) as workers. There's a shortage of key mineral reserves, but an abundance of corporate entities.
- FredPret 3y ago
  In capitalism, competition is on a higher level of abstraction than the employee’s (even the CEO)’s performance. The entire company will go up or down according to output, even if due to external circumstances. Capital gets reallocated to better performing companies. Examples: IBM, HP, Dell went from dominating to the doghouse; Microsoft made excellent strategic choices and remained relevant; Apple went from the doghouse to dominating, and so on. This filters down to the employees. There is much more turnover and harder work (and higher pay) in private companies than at the government.
flangola7 3y ago
>in the vast majority of cases isn't the reality of it. Extraordinarily claims require extraordinary evidence, of which none is provided. Public actors do not have, among many other negative characteristics, enshittification incentives. Greed is a malignant cancer that ruins human lives if left untreated.
- FredPret 3y ago
  Capitalists are greedy for profits. But bureaucrats are greedy for power.
pg_1234 3y ago
It doesn't have to be as efficient ... a hyper-efficient private business that shift most of it's profits to a tax haven (as they all do) provides less benefit to the country than a moderately efficient state enterprise that invests all the gains back into the country. The point is for the country to take the role of "business owner", and to relegate the private businesses to the role of an "employee" (with a commensurately smaller slice of the upside) ... and if they don't like it, someone else will take their place ... after all the country has a guaranteed monopoly (they own the entire resource).

Your idea assumes the state will run it as efficiently as private businesses would. That sounds nice in theory but in the vast majority of cases isn't the reality of it.

bobthepanda 3y ago

There’s a mixed track record. Saudi Aramco for instance became the largest oil operator generating lots of profit for its home country. Norway’s Statoil is another.

dmix 3y ago
Wasn't Saudi Aramco a 50/50 arrangement with the private American company for most of it's history when it was developing the main oil fields? I believe the companies agreed to this because the Saudi's threatened to nationalize it completely. The Norwegian one was a gov corporation from the beginning though and was there from the beginning of exploration/development. There can also be a long-term benefit that post-nationalized orgs from their past state as private structures, living off the fat as they say. The existing talent/prior knowledge/industry relationships are still there, just with a new owner and more capital. Similar to NASA absorbing a well established and already highly productive private industry / university researcher pool, and merging them under one umbrella and then having a golden era of productivity before sliding back into a more normal public agency. That sort of productivity naturally fades over time as the gov bureaucracy increasingly takes over and the natural constraints of politicized funding. It helps if your business is a slow changing monopoly industry like oil/gas though.
williamcotton 3y ago
And economic ideology is less important to that mixed track record than is generally believed, regardless of which camp people subscribe.

digdugdirk 3y ago

I'm always intrigued/entertained/confused by this line of reasoning. What companies have you worked for that were highly efficient and made rational long-term strategic decisions? I'm not saying a state entity would be inherently better (though a case could be made for the benefits of long-term thinking that are more built-in) but I'd like to see the evidence that corporate businesses are inherently better themselves.

isignal 3y ago
Individual corporate entities have their own flaws but the competition between them is a structure that eventually forced inefficient entities out. So Intel eventually finds themselves overtaken by a TSMC. But with govt entities, no such structure exists.
- gota 3y ago
  I understand the argument, but it seems large companies are seldom, or never, overtaken by others. They entrench themselves by regulatory capture, advantages of economy os scale, and survive virtually indefinitely even in shrinking markets If we don't count "missing the boat" (as happened regarding search/mobile/social media), which arguably happens because of disruption from the newcomers and not mismanagement/underperformance at the oldtimers, what large companies have failed in the last 20 years? Core to this point is that mega companies are only at threat from disruption, and it doesn't matter whether they're private or state owned for that (I am of course ignoring companies that go under from criminal, as in corruption, mismanagement. I guess those are much more prevalent between the state-owned, for obvious reasons)
- pg_1234 3y ago
  The state can own the capital/resource and make multiple corporate entities compete (efficiently) as workers. There's a shortage of key mineral reserves, but an abundance of corporate entities.
FredPret 3y ago
In capitalism, competition is on a higher level of abstraction than the employee’s (even the CEO)’s performance. The entire company will go up or down according to output, even if due to external circumstances. Capital gets reallocated to better performing companies. Examples: IBM, HP, Dell went from dominating to the doghouse; Microsoft made excellent strategic choices and remained relevant; Apple went from the doghouse to dominating, and so on. This filters down to the employees. There is much more turnover and harder work (and higher pay) in private companies than at the government.

flangola7 3y ago

>in the vast majority of cases isn't the reality of it. Extraordinarily claims require extraordinary evidence, of which none is provided. Public actors do not have, among many other negative characteristics, enshittification incentives. Greed is a malignant cancer that ruins human lives if left untreated.

FredPret 3y ago
Capitalists are greedy for profits. But bureaucrats are greedy for power.

pg_1234 3y ago

It doesn't have to be as efficient ... a hyper-efficient private business that shift most of it's profits to a tax haven (as they all do) provides less benefit to the country than a moderately efficient state enterprise that invests all the gains back into the country. The point is for the country to take the role of "business owner", and to relegate the private businesses to the role of an "employee" (with a commensurately smaller slice of the upside) ... and if they don't like it, someone else will take their place ... after all the country has a guaranteed monopoly (they own the entire resource).