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I don't see a very significant distinction between "a state-run monopoly in private hands" and "a state-run monopoly in state-run hands." Each person is still a

by baddox 11y ago

I don't see a very significant distinction between "a state-run monopoly in private hands" and "a state-run monopoly in state-run hands." Each person is still an individual, after all, with "private" incentives. Whether their title is technically a government job is irrelevant, as long as their money is coming from government either directly (from the government budget) or indirectly (thanks to a government-enforced monopoly).

kristopolous 11y ago
The differences are in the kinds of risks taken, how the revenue is allocated, and how the profits are handled. The incentive structure of the two systems are different. This changes the outcome.
- baddox 11y ago
  Can you explain how the incentive structures differ? They don't seem significantly different to me.
  - kristopolous 11y ago
    Capital driven entities excel by maximizing revenue and minimizing cost. They perpetuate themselves and insulate their volatility by building vast warchests. A public equivalence however, excels by maximizing utility. They perpetuate themselves by making sure the value they provide is near the cost they incur. Take a gym for example. A private one wants to maximize membership dues but minimize actual facility use - that maximizes profit. A public one wants to be something that the community utilizes. Generally speaking, in a public equivalence, the only party to enrich in the exchange is the customer base. Now given this, a homogeneous state-run society sounds foolish ... but America's homogeneous capitalist society is equally foolhardy. We are sophisticated enough to analyze things and apply appropriate incentivized structures upon them instead of using the same one inappropriately in every use-case.
    - baddox 11y ago
      > A public equivalence however, excels by maximizing utility. I don't think that makes sense economically, and I don't think it's true empirically. It's probably what the public wants a public institution to be.

by baddox 11y ago

kristopolous 11y ago

The differences are in the kinds of risks taken, how the revenue is allocated, and how the profits are handled. The incentive structure of the two systems are different. This changes the outcome.

baddox 11y ago
Can you explain how the incentive structures differ? They don't seem significantly different to me.
- kristopolous 11y ago
  Capital driven entities excel by maximizing revenue and minimizing cost. They perpetuate themselves and insulate their volatility by building vast warchests. A public equivalence however, excels by maximizing utility. They perpetuate themselves by making sure the value they provide is near the cost they incur. Take a gym for example. A private one wants to maximize membership dues but minimize actual facility use - that maximizes profit. A public one wants to be something that the community utilizes. Generally speaking, in a public equivalence, the only party to enrich in the exchange is the customer base. Now given this, a homogeneous state-run society sounds foolish ... but America's homogeneous capitalist society is equally foolhardy. We are sophisticated enough to analyze things and apply appropriate incentivized structures upon them instead of using the same one inappropriately in every use-case.
  - baddox 11y ago
    > A public equivalence however, excels by maximizing utility. I don't think that makes sense economically, and I don't think it's true empirically. It's probably what the public wants a public institution to be.