# Does the public sector seizing the means of production ever work out well? **URL:** \ **Category:** Great Debates\ **Created:** [June 29, 2018, 3:10pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995 "2018-06-29T15:10:59Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [June 29, 2018, 3:10pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/1 "2018-06-29T15:10:59Z")
I’m a leftist, but I’m more of a believer in social democracy. The core of that is still acceptance of capitalism, but you need a lot of regulations and redistribution to take the harsh edges off of capitalism. But what about socialism as seizing the means of production, does that ever work in the real world for the benefit of the people or to benefit economic growth? I know in some places like the UK, the health care system is socialized and it works fine.And the public sector can use incentives like subsidies or tax cuts to incentivize the market to push for one solution over another (solar power over coal, finding a vaccine for HIV, etc). But for other areas of the economy like manufacturing and selling cars, DVD players, computers, etc. does it ever work? What about oil production? Do nationalized oil fields produce at the same rates as privatized oil fields? Public transit seems to be ok in many cities, but I don’t really have a private company to compare it to. There is no system of private buses to compete with. ---
**Author:** ![PastTense](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pasttense/32/14550_2.png) [@PastTense](https://boards.straightdope.com/u/PastTense)\ **Post date:** [June 29, 2018, 4:20pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/2 "2018-06-29T16:20:27Z")
Did you know the U.S. nationalized the railroads in World War I? > **[United States Railroad Administration](https://en.wikipedia.org/wiki/United_States_Railroad_Administration)** > > The United States Railroad Administration (USRA) was the name of the nationalized railroad system of the United States between December 28, 1917, and March 1, 1920. It was the largest American experiment with nationalization, and was undertaken against a background of war emergency following American entry into World War I. During its brief existence, the USRA made major investments in the United States railroad system, and introduced standardized locomotive and railroad car classes, known as Al... ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [June 29, 2018, 4:23pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/3 "2018-06-29T16:23:48Z")
There’s the Tennessee Valley Authority, which mainly got its start because privately owned power companies didn’t want to serve poor, rural areas in the South. That absolutely stimulated economic growth. “Universal service” is an area where government intervention - either through direct ownership or heavy regulation and subsidy - actually makes sense. FedEX and UPS still use the U.S. Postal Service for delivery in rural areas. In St. Louis County, Missouri, there are some pockets that the cable companies won’t serve, and the phone company won’t upgrade, because they aren’t cost-effective to run lines in there. The local governments in those areas have gotten involved to get some sort of high-speed Internet into those areas. ---
**Author:** ![Whack-a-Mole](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/whack-a-mole/32/141_2.png) [@Whack-a-Mole](https://boards.straightdope.com/u/Whack-a-Mole)\ **Post date:** [June 29, 2018, 4:30pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/4 "2018-06-29T16:30:20Z")
Communism/socialism have been shown to be deeply flawed and ultimately unworkable but then so has capitalism. It should probably be no surprise that the better systems are a mix of the two. Of course agreeing on that mix is a topic of endless debate. Production of iPods and jetskis is absolutely best left to the private sector. Other things where competition is not really feasible are best operated by the state. Things like healthcare, prisons, police/fire, mass transit, postal service and so on. Utilities are pseudo-private…not sure if they would be better 100% under government control but definitely not all private. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [June 29, 2018, 4:52pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/5 "2018-06-29T16:52:03Z")
> [@Whack-a-Mole](#): > > Communism/socialism have been shown to be deeply flawed and ultimately unworkable but then so has capitalism. It should probably be no surprise that the better systems are a mix of the two. Of course agreeing on that mix is a topic of endless debate. > > Production of iPods and jetskis is absolutely best left to the private sector. > > Other things where competition is not really feasible are best operated by the state. Things like healthcare, prisons, police/fire, mass transit, postal service and so on. > > Utilities are pseudo-private…not sure if they would be better 100% under government control but definitely not all private. Thats my view. Some things are left to the private sector, some things left to the public sector. Military, police, prisons, mass transit, health care, infrastructure, etc. should be public sector. The profit motive doesn’t provide sufficient incentive to provide these things in the ways the public need them for security and GDP growth. other things like R&D, utilites, etc. should be a mix of public and private sector. most everything else should be private sector. But I’m wondering what happens if the public sector takes over markets for things like consumer goods, food production and distribution, real estate etc. Does it work? ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [June 29, 2018, 5:17pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/6 "2018-06-29T17:17:50Z")
> [@Wesley\_Clark](#): > > But I’m wondering what happens if the public sector takes over markets for things like consumer goods, food production and distribution, real estate etc. Does it work? We could test the idea by taking a country, splitting it up into two sections, and run one section under socialist principles and the other as a capitalist economy. Then compare the quality of the food, consumer goods, and real estate between the two. Call them, say, East and West Schmermany. Wait fifty years or so, and then [compare](https://en.wikipedia.org/wiki/Economy_of_East_Germany#Comparison_with_West_Germany). Regards, Shodan ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [June 29, 2018, 5:20pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/7 "2018-06-29T17:20:35Z")
> [@Shodan](#): > > We could test the idea by taking a country, splitting it up into two sections, and run one section under socialist principles and the other as a capitalist economy. Then compare the quality of the food, consumer goods, and real estate between the two. Call them, say, East and West Schmermany. Wait fifty years or so, and then [compare](https://en.wikipedia.org/wiki/Economy_of_East_Germany#Comparison_with_West_Germany). > > Regards, > Shodan Yeah, or north and south Korea. But I’m wondering if there are instances where the opposite happened. Socializing the means of production resulted in higher standards of living, higher levels of wealth, higher levels of productivity, etc. Also as I mentioned in another thread I posted, once the USSR fell then many ex-USSR states started undergoing rapid economic growth. I do not know if part of the reason their growth was so rapid was because under the socialist systems there was large investments in education, health care and infrastructure which resulted in higher levels of human capital that could build wealthy civilizations. But it was only when the centrally planned market economics of communism fell and was replaced with market economics could the people start building a society that took advantage of all that human capital. If true, in those situations the USSR was both the cause and roadbock of rapid economic growth in their satellite states. ---
**Author:** ![Sage\_Rat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sage_rat/32/399_2.png) [@Sage\_Rat](https://boards.straightdope.com/u/Sage_Rat)\ **Post date:** [June 29, 2018, 5:37pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/8 "2018-06-29T17:37:34Z")
> [@Wesley\_Clark](#): > > But I’m wondering what happens if the public sector takes over markets for things like consumer goods, food production and distribution, real estate etc. Does it work? I’m not aware of any examples, but the government usually intermixes its duties when it comes to things like this. Minus a pure profit motive, motives like wanting to keep people employed - regardless of performance - can take priority. The end result of that being less efficiency and worse quality of products. Those products would then not be particularly competitive and so they would need to be partially supported by tax revenues. I was reading this article recently: [https://www.bloomberg.com/news/articles/2018-06-20/workers-paid-to-do-nothing-a-ghost-army-that-haunts-gulf-rulers](https://www.bloomberg.com/news/articles/2018-06-20/workers-paid-to-do-nothing-a-ghost-army-that-haunts-gulf-rulers) ---
**Author:** ![senoy](https://avatars.discourse-cdn.com/v4/letter/s/dbc845/32.png) [@senoy](https://boards.straightdope.com/u/senoy)\ **Post date:** [June 29, 2018, 6:02pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/9 "2018-06-29T18:02:34Z")
China might be an example, although it too is a mix. About 1/3 of its businesses are private with 1/3 being completely state-owned and 1/3 being state-controlled with private investment. Regardless, all enterprises regardless of which category they fall in are controlled in large part by the state. China Investment Corp is absolutely humongous and completely state owned. Large parts of their industrial base including most of their steel manufacturing is state owned. They have a number of state-owned electronics firms, Philips mobile phones might be the ones you’re most familiar with in the west (There has long been speculation that Lenovo is state-run since it began as a State-Operated Enterprise. It consistently denies this and says it is now completely private. Of course, that’s what you’d expect it to say if it wants to keep selling to the West.) Regardless though, China has many, many, many fully state-owned corporations that are wildly successful. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [June 29, 2018, 6:24pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/10 "2018-06-29T18:24:50Z")
“Work out well” depends on what you’re trying to accomplish. More efficient with higher quality goods/services? Maybe not. If you want to sacrifice some of that to ensure equal-ish service/access to everyone? Maybe. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [June 29, 2018, 7:18pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/11 "2018-06-29T19:18:13Z")
> [@Shodan](#): > > Call them, say, East and West Schmermany. > [@Wesley\_Clark](#): > > Yeah, or north and south Korea. West Germany and South Korea have systems that are a mix of capitalism and socialism. So they don’t necessarily prove that capitalism works better than communism. They might instead prove that a mixed system works better than a single system. I tend to agree with Wesley Clark’s previous post; things work best when you accept both systems and use the one that works best in a particular situation. Capitalism generally works better in most areas of business; its reward system drives progress (although it’s worth remembering that capitalism needs free market competition to work well). But there are some areas where a single non-profit system like the government works better. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [June 29, 2018, 7:49pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/12 "2018-06-29T19:49:43Z")
> [@Little\_Nemo](#): > > West Germany and South Korea have systems that are a mix of capitalism and socialism. So they don’t necessarily prove that capitalism works better than communism. They might instead prove that a mixed system works better than a single system. The question under discussion was specifically about “consumer goods, food production and distribution, real estate etc.” What parts of the West German and South Korean systems for those things are socialist, in your opinion? Regards, Shodan ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [June 29, 2018, 8:52pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/13 "2018-06-29T20:52:59Z")
> [@Wesley\_Clark](#): > > But I’m wondering what happens if the public sector takes over markets for things like consumer goods, food production and distribution, real estate etc. Does it work? Work in what sense? I’m sure it could manage to feed people, but the real beauty of the free market/capitalist system is that it responds to wants better than the government does, because people stand to make a buck by doing so. The government doesn’t. Heck.. I’ve recently started working for a branch of government, and I see it here; stuff gets delayed, not because people don’t care, but because there’s not that relentless top-down pressure to get things done/make a difference on the bottom line. And upper management doesn’t seem to have the motivation or authority to cut the Gordian knots that hinder getting things done in the commercial-sector timely fashion. Don’t get me wrong- it’s a great place to work as a result. But a project that would take 6-9 months in the commercial world is more like a year and a half here. ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [June 29, 2018, 9:16pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/14 "2018-06-29T21:16:00Z")
> [@Shodan](#): > > The question under discussion was specifically about “consumer goods, food production and distribution, real estate etc.” What parts of the West German and South Korean systems for those things are socialist, in your opinion? I’m not seeing that. The OP mentioned several different things: health care, manufacturing consumer goods, oil production, and public transit. I interpret the question under discussion as _“What type of things work better under a capitalist system and what type of things work better under a different system?”_ not _“What’s the best system for producing consumer goods?”_. ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [June 30, 2018, 1:24am UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/15 "2018-06-30T01:24:40Z")
Well, eonomics is complicated, but the provision of Public Goods is usually the major case considered if you ask what government is good for. Public Goods are very specific, thowever, and hilariously enough are usually actually created or provided by private means even if the government is paying for it. A Public Good is non-excludable and non-rivalrous, which is the fancy economist (or Wikipedia) way of saying it’s really hard to charge people for. Note that it’s not impossible to charge people for them - it happens all the time. It’s just usually more trouble than it’s worth. A common example is that roads are usually provided by for the government. It’s difficult (not impossible, just tedious and expensive) to charge poeple for using roads all the time). So it’s easier to do so through taxation. But that is hugely different than Seizing the Means of Production, which basically never went well. Some municipalities have road crews, but most road construction is done through private companies, because it’s much more efficient that way. Many of the “government” services people think of, such as the United States Post Office or power companies, are actually private companies who get certain priveleges in exchange for undertaking a public service, _some_ of which may be money-losing. This is actually the classic form of the corporation and goes back at least the Middle Ages, and maybe much earlier depending on what you think of Roman-Republican-era _Publicani_. If you want to talk about real Socialism or Communism, you run pretty rapidly into the fundamental organizational limits of human society. Entire social classes or nation can’t really take overnership or anything, because it’s impossible to coordinate effectively. Left-wing revolutions, no matter how idealistic, have more orless inevitably fallen into dictatorship not just because of corrupt men, but because they are trying to do something literally impossible. Government, at least in the human sense, requires some way of selecting a small selection of leaders who make decisions. Exactly how small that group is, whether it coordinates decisions with an entire nation or people, and what limits exist on its power is ultimately the question of political science. You get the same issue in the economic sphere. You can get relatively small Co-ops. They exist, and they function just fine. But they haven’t been winning against the wide array of corporations, limited partnerships, and sole proprieterships and don’t show much in the way of long-term advantages over those forms of ownership. Further, since it turns out that we simply don’t have a better way to signal value than price, any form of economics that tries to remove price signals will inevitably underperform or even go backwards. ---
**Author:** ![CelticKnot](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/celticknot/32/3392_2.png) [@CelticKnot](https://boards.straightdope.com/u/CelticKnot)\ **Post date:** [June 30, 2018, 2:00pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/16 "2018-06-30T14:00:54Z")
> [@Wesley\_Clark](#): > > I’m a leftist, but I’m more of a believer in social democracy. The core of that is still acceptance of capitalism, but you need a lot of regulations and redistribution to take the harsh edges off of capitalism. > > But what about socialism as seizing the means of production, does that ever work in the real world for the benefit of the people or to benefit economic growth? > > I know in some places like the UK, the health care system is socialized and it works fine.And the public sector can use incentives like subsidies or tax cuts to incentivize the market to push for one solution over another (solar power over coal, finding a vaccine for HIV, etc). > > But for other areas of the economy like manufacturing and selling cars, DVD players, computers, etc. does it ever work? > > What about oil production? Do nationalized oil fields produce at the same rates as privatized oil fields? > > Public transit seems to be ok in many cities, but I don’t really have a private company to compare it to. There is no system of private buses to compete with. Communism or Socialism (but I repeat myself), in whatever form, cannot work unless everyone is willing to sacrifice their own interests for the common good in every decision made, all the time. Humans don’t do that. Corruption among those in power will become the rule. If any system appears successful, it is because it hasn’t yet degraded, or the powers that be have enough weapons to sustain it. ---
**Author:** ![k9bfriender](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/k9bfriender/32/3283_2.png) [@k9bfriender](https://boards.straightdope.com/u/k9bfriender)\ **Post date:** [June 30, 2018, 2:51pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/17 "2018-06-30T14:51:18Z")
> [@CelticKnot](#): > > Communism or Socialism (but I repeat myself), in whatever form, cannot work unless everyone is willing to sacrifice their own interests for the common good in every decision made, all the time. Humans don’t do that. Corruption among those in power will become the rule. If any system appears successful, it is because it hasn’t yet degraded, or the powers that be have enough weapons to sustain it. There is a spectrum of public ownership of the means of production. What you describe is only the far end of the spectrum with total state ownership and no private control. We currently have socialism, and it works. Many other countries are further along the spectrum, and they work too. Your prediction that they just haven’t degraded yet has no evidence, and in fact, all evidence points to the very opposite. There are countries that are more socialistic than ourselves, and they are more stable, have better overall standards of living, and have a higher social and economic mobility. Yes, there are times when the more well off are required to sacrifice some level of luxury in their lives in order for the less well off to receive the basic necessities of life, but they are not “sacrific[ing] their own interests”, they are just tempering their personal hedonism. That one has to sacrifice their interests for the common good is the very basis of civilization. There are people who would like to murder and rape, but sacrifice their desire for the common good. We do not allow theft or vandalism, even if the thief or vandal really wants to. At the same time, we also require that people contribute part of the largess that civilization has allowed them to accumulate in order to help their fellow man to give them an opportunity to try to achieve their goals as well. Now, you are correct in that people don’t like doing that. If you gave a murderer an option whether they were allowed to murder or not, they’d take the allowed to murder option. Same as with the wealthy. If you give them the option to contribute a part of the wealth that society has allowed them to control or to keep it to themselves, then yes, they will take the option to keep it for themselves. The corruption is not generated among those in political power, but among those who are using the wealth that living in a civilization has allowed them to acquire to change the system to allow them to retain even more of their wealth, and even to dip into the treasury of other people’s tax dollars to further enrich themselves. ---
**Author:** ![DavidwithanR](https://avatars.discourse-cdn.com/v4/letter/d/3bc359/32.png) [@DavidwithanR](https://boards.straightdope.com/u/DavidwithanR)\ **Post date:** [June 30, 2018, 7:31pm UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/18 "2018-06-30T19:31:49Z")
> [@CelticKnot](#): > > Communism or Socialism (but I repeat myself), in whatever form, cannot work unless everyone is willing to sacrifice their own interests for the common good in every decision made, all the time. Humans don’t do that. Corruption among those in power will become the rule. If any system appears successful, it is because it hasn’t yet degraded, or the powers that be have enough weapons to sustain it. Everyone in every society does exactly as you’ve described though. Unless you personally hire private contractors to build a new road just for you every time you want to travel, and unless you’ve privately hired police and firefighting services, and so on, then you do it too. Human independence from each other is pure unadulterated fantasy. ---
**Author:** ![lonesome\_crow](https://avatars.discourse-cdn.com/v4/letter/l/a587f6/32.png) [@lonesome\_crow](https://boards.straightdope.com/u/lonesome_crow)\ **Post date:** [July 1, 2018, 9:08am UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/19 "2018-07-01T09:08:46Z")
> [@Wesley\_Clark](#): > > edited quote… > But what about socialism as seizing the means of production, does that ever work in the real world for the benefit of the people or to benefit economic growth? Yes. I think that is how it works. I think many starter companies would like to get a government contract to help fund and underwrite all the risks involved in developing a company. ---
**Author:** ![Hari\_Seldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hari_seldon/32/5173_2.png) [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)\ **Post date:** [July 3, 2018, 12:47am UTC](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995/20 "2018-07-03T00:47:48Z")
In general, I would advocate for free markets (meaning, among other things, strong strong anti-monopoly action on the part of the government, something Adam Smith also realized was necessary). But if something was a natural monopoly (like telephones before VOIP gave us choices), then the government should run it. But to answer the OP, I do know of one example. Until the mid-60s there were many power companies in Quebec. The Quebec government decided to nationalize them and did so. The person who actually carried this out was Rene Levesque, later to found the separatist party and become provincial premier. The company, Hydro-Quebec seems to be well run and extremely successful. Essentially all our power is hydro-electric and our rates are much lower than just about anywhere else. They also sell a lot of power to NY and New England and return substantial profits to the government. It would be interesting to hear from some Brits on the subject since a few of their industries were nationalized and then privatized. [Next page](https://boards.straightdope.com/t/does-the-public-sector-seizing-the-means-of-production-ever-work-out-well/816995.md?page=2)