Very true–while it’s always regrettable to bring them up, the Nazis in WWII were a good example of a quasi-command economy with private ownership of capital. After a certain point the Reich government more or less was in command of private business in terms of telling them what to make, but (as long as they didn’t politically cross the Nazis) the industrialists got to retain ownership of their firms, and day to day managerial responsibility. [This actually isn’t necessarily crazily different, in principle, from the “War Economy” FDR moved to the United States to, albeit due to the much larger size of the U.S. economy more of our economy was left outside of the system, and while FDR theoretically had clubs he could use, he mostly worked with a U.S. industrial sector that was willing to comply voluntarily.]
It’s worth noting I specifically mentioned free markets / capitalism in response to @HMS_Irruncible’s post, but the core thrust of my post was we shouldn’t broadly use those terms like we do, nor use the dichotomy of “capitalism” and “socialism”, and then I explained alternatives that are quite commonly used in econ / business journalism and in academia as well.
On a broad topic as complicated as this one, I often lack strong opinions on what must “absolutely” be the case.
The world has turned out to be much different from what I thought must certainly be the case too many times before.
I would just point out that “free markets” in the real world aren’t any kind of absolute. They exist on a spectrum, with some governments interfering “less” according to the usual measures, and others countries obviously interfering massively. There are no societies on the extreme end of pure free market practices, nor is it likely there could be. But if we actually tried to define a measure of “market freedom”, or “neoliberalism” or whatever else people wanted to call it, and did a comparison of economic results for the types of countries that actually do exist – for example, if we actually ran a regression of market freedom on per capita output – the results would be fairly obvious.
When I took my high school US Government course, the teacher had friends who worked for the Pacific Stock Exchange. They’d developed a game to teach high schoolers how an economy worked. There were kids with resources, and buyers and sellers. It was relatively simplistic, and I don’t remember all the details. But to make it more “real world” they gave one student a little more money to start the game with – me! I remember it being almost instinctual to go to all the resource owners, outbid everybody else with my financial advantage, and I had a monopoly lickety split. I always wondered if they thought I’d be less hard-nosed because I was a girl. But, nah, I wiped the floor with 'em.
This is expanding the definition of “Socialism” not just way past what Marx meant, but past what I think anyone means. In effect, you are saying socialism is the existence of a government.
As Hellestal points out, “they exist on a spectrum,” and setting socialism as being “the government exists” is putting the point so far to the right that we have no spectrum to discuss.
Socialism, in any sense that really matters and is useful in debate in 2021, is government control over the means of production. The government having an armed forces is very little in the way of socialism in any sense that matters, because the army isn’t a means of production and anyway there is no practical policy alternative to discuss. The government owning an oil company is DEFINITELY socialism.
Of course, the extent to which a government engages in government action could expand to such a massive degree that it occupies such an enormous part of the economy that it’s socialism. Or crony capitalism, I guess.
No, that is not what I said. It makes no sense.
Just because a government exists does not mean there are services run by the government. There are plenty of historical examples of governments that existed without provided the services I listed.
This is incorrect. Nothing about the above services implies the existence of a government. In fact, extremists in the US are trying to privatize some or all of those services and eliminate government involvement entirely.
The reason it’s useful to point out that things like police and school are socialized, is to get people to realize that socialism isn’t some big boogeyman. It’s something we’ve already accepted as uncontroversial in numerous different forms, because it’s an abundantly sensible thing to do.
Another example that needs to be pointed out is the socialization of risk and accountability that comes with limited corporate liability. Most people agree that corporations have historically been a great vehicle of prosperity. But nobody stops to think that the reason this works is that the government bears a lot of the risk so that people don’t need to, and furthermore the government takes on a burden of public accountability of the finances of these companies so as to create a level of trust that attracts investment.
That’s why it’s a big deal for a company to “go public”. By socializing the risk and accountability, much bigger things can be achieved. Nobody ever gets excited about corporations going private!
Having understood that we already have socialism everywhere, in ways that are seen as uncontroversially good, then we can talk about whether there are other problems that might be solved together instead of having every individual fend for themself.
As you said, “extremists.” That is not a practical policy and it’s never going to happen. Characterizing a country with a government-run armed forces as “socialist” waters the term to meaninglessness. It’s playing into Trumpist nonsense to call anything the government does “socialism.”
It’s beyond my current interest to try to research the size, the strength, the force, and the resources behind the push to increasingly privatize things like prisons, education, infrastructure, etc., but …
I don’t think these are trivial matters. I think we ignore them at our peril.
One thing the US witnessed under GW Bush was Rumsfeld’s herculean effort to privatize large portions of the Iraq and Afghanistan wars:
So – while I think you’re correct in an academic sense – I do think the calls to privatize nearly every aspect of US civil society mean it’s imprudent to ignore those calling.
I also believe it’s important to include them in the discussion because much of what we’re discussing is properly characterized as either a ‘common good,’ or contains an inherent perverse incentive – ie, profiting from misery.
IMHO, the US version of capitalism has that as one of its most glaring and corrosive flaws: the degree to which we profit from misery.
Prisons have always been government run since they started around the early 19th century. But there was a strong movement to privatize them in the nineties.
Schools in this country have always been a mixture of government run and privately run. But there was a strong push to promote private schools twenty years ago.
We’ve also seen the growth of private companies that compete with the government run post office.
Uh… you’ve heard of private schools? Private prisons? Private fire departments run by insurance companies are now a thing. Take a look around. The extremists are winning.
Not sure if this was bobbled phrasing, but they haven’t always been government run, because the push you mentioned in the 1990’s had some success. I’ve seen a figure that says 8% of incarcerated people are in private prisons at this point, and the industry is trying to grow that number.
Understandably, you’ve cherry-picked the weakest example in the set to focus on. But the point still remains… there are already a ton of government services that we’ve socialized. If we’ve socialized the mail, if we’ve socialized the fire department, are there not other services that might benefit from being socialized?
Anyhow, the overarching point that you missed is that fire departments and police departments aren’t automatically implied by having a government. It’s actually the other way around. People decide that certain social services are needed, and that everybody ought to pay for them, so we have a government to do that.
Sorry if I wasn’t clear. My point was that prisons were something that started out as government run institutions. They were not a part of the private economy that the government took over.
The larger point is that there is no clear line that divides what is a private business from what is a government service. The same entity might be run by a private business in one location and the government in a different location. In some cases, you might even see government and private entities being run alongside each other in the same location.
Wait, what? Fire departments aren’t a thing that make any sense to privatize. If my neighbor’s house catches fire, I don’t give a fuck if he’s insured - I want the FD to put that shit out before it spreads to my house. It’s inherently a public good.
Googling a bit I didn’t find any private fire departments that function like actual municipal FDs. Just a bunch of things where a corporation with a large plant would have an onsite fire suppression team that is part of that corporation.
Of course it makes sense. Privatization is about profit, not the public good.
Can you guess what sort of entity might carry so much direct financial risk from fires that it might want its own fire department to prioritize its own customers?
Answer: an insurance company.
OH, yeah.
The article from the Guardian which is subsequently cited actually has nothing to do with privatization.
It’s about people not wanting their homes to burn down, which is what has been happening. Most people tend to consider losing their home a bad thing. It’s also about insurance companies not wanting their clients’ homes to burn down, and how the local firefighters’ group is not entirely thrilled with those companies taking a more proactive stance to stop the destruction of insured homes. Mysteriously, the spokesperson for the group somehow fails to mention that the inability of the group’s membership to protect those homes by themselves, without assistance, is the underlying reason additional resources are being brought in.
This is not a story of municipalities selling off all their fire engines to the highest bidder. Marcus Licinius Crassus is not showing up at people’s houses in order to negotiate the fee for putting out the blaze while the fire still burns.
Whether “privatization” or “nationalization” benefits the public good depends – as any reasonable person knows – on the particular costs and benefits of each individual case. But this is not an example of that.
It’s not just that. By taxing Bezos on his unrealized gains, you do not gain the ability to then use that wealth for your own purposes. To actually extract the value of the company’s resources to be repurposed elsewhere in the economy, you have to actually take them from somewhere.
What actually happens with the tax is that the government winds up controlling part of Amazon rather than Jeff Bezos. But assuming your are going to keep Amazon going and maintain its cost structure, you really haven’t gained any real resources you can put to work on whatever it is you want to do.
This is really important. If a company is as successful as Amazon, you want the guy who brought you there to keep running the company. Is there anyone who really believes that the success of companies like Amazon and SpaceX have nothing to do with the rather unique and rare qualities of the people who built them? Why would you want to punt them aside and have someone else take over?
And the most important factor over the long term is the compounded effect of the disincentive to invest in high risk / high reward ventures. This increases the cost of risk and volatility, so you get less investment in that, and more in stable growth like real estate or blue chip stocks. We’d be suppressing the most vital part of the economy to future growth. As Hellestal said, it’s eating the seed corn. It’s really bad policy.
Given that the guy who brought amazon there is actually not involved in running the company anymore are you guys predicting that amazon will now crumble?
Actually it does. You seem to be narrowing the definition of privatization to an overt conversion of a public resource to a private one. What’s happening here is a private company simply jumping in and take on the profit-generating parts of that job - and only that portion. This creates an incentive for homeowners to say “my personal home is taken care of, I don’t want to pay for the broader mission of protecting my neighbor’s home.”
Ah, ah… not so fast… proactive? You think the private companies are proactive? Are they suppressing fire in surrounding neighborhoods to stop any potential spread? Are they performing safety inspections of structures to avoid fire hazards? Are they maintaining fire breaks, are they performing any public fire prevention? No. They’re not doing any of this. Almost no proactivity happening here.
Perhaps you’re reading something into the article that isn’t there? We only know that a private company wanted their own interests to get priority fire protection, and sent in their own resources without coordinating with the public entities, who aren’t thrilled about that.
If insurance companies really wanted to do some good, they could supplement the local fire departments. Increase the budgets for both prevention and response. Serve homes that are actually at immediate risk, and surrounding areas, instead of parking themselves at insured properties and watching the fire spread in locations that aren’t paying for help.
Ever heard of Underwriter’s Labs? That’s an insurance agency. UL approval is required for a lot of insurance. That would be proactive. Insurance companies drive all sorts of safety activities.