Industry & Service: Government v. Private

[Reckoner]

I searched around for any existing threads on this topic, while some of them touched on this issue, they were made for different purposes so I made this thread. Examples of search words I used were public, private, government, industry... etc.


An ongoing debate throughout much of the world, especially the U.S., is about who does a better job at controlling industry and service: government or private hands? Or where should the line be drawn between the two? When is it appropriate for government to intervene in the economy? Who is held more accountable? Does the invisible hand of the market really sort everything out?

An example that people who want more government in the economy may like to bring up is the post office to support their claims, while the opposing side may bring up schools (Which may not be very true at all).

These are the sorts of questions that have yet to be officially answered. What are your opinions on the matter?

Personally, I feel that the government should have a strong hand in our economy, but not to the point of socialism/communism. Private industry seems too motivated by greed and I feel that there needs to be more regulation so they do not get out of hand.

On the other hand, I can also see the faults of government. The workers get lazy when they do not have to worry about getting paid, and inefficiency broods.

But all in all, that is what makes this issue not just black and white in my eyes, but very gray.

So thoughts?

[tripperazn]

Originally Posted by Reckoner

this issue not just black and white in my eyes, but very gray.

That's exactly it, I'm not going to answer your poll simply because I agree with none of the options. Pure Market Economy and Pure Command Economy are both colossal failures when implemented in the past (Soviet Russia, Gilded Age US [~1890], etc).

Simply put, government run organizations are inefficient and do not push for innovation. Private industry, if unregulated, only maximize profit and will do anything to make money, often at the expense of the consumer. You need the efficiency and incentive of the market system, but also the watchful eye of the government who looks out for the best interests of the people.

[Reckoner]

Originally Posted by tripperazn

That's exactly it, I'm not going to answer your poll simply because I agree with none of the options. Pure Market Economy and Pure Command Economy are both colossal failures when implemented in the past (Soviet Russia, Gilded Age US [~1890], etc).

I see. I intended the poll to be a method of making people choose a preference. Just employing the methods of a statistician in the poll. Regardless I am more interested in people's opinions being explained.

[Vexx]

It really depends on what the tribe (the people) decide to share the load on.
Minimally most people agree that roads, police, fire, and postal are useful to have run by the People (the government). Where the line is drawn after that depends on the topic.

Anything considered essential for functioning as a citizen of the society is a candidate for either non-profit, NGO, or government operations.

Healthcare, for example, may become necessarily a government operation because - frankly - our domestic businesses are having trouble competing with nations that have taken that load off of their businesses. Even as a government operation though, there's enormous opportunity for contractors to support the operations.

I'll shut up now because having worked in all sectors: private commercial, non-profit, and government --- my only comment is that its bullshit to make sweeping statements about any sector. I've seen the most ineffective purely-survives-on-momentum terrible corporate clusterfuck commercial enterprises... and the most bang-for-the-buck efficient lean government organizations there are. Any large group of people can screw up an operation or make it wildly successful - with or without being government or private.

[yezhanquan]

I personally believe in a mixture and moderation.

[mg1942]

hmmm it's hard to decide which is better when it comes to power utilities.

[Hari Michiru]

I say a bit more on the government side, since most countries that can read this forum are probably democratic countries. I'd say to give the power to the people we can kick out if we don't like them in the next election. Business people are capitalists, and focus on the money only, but the government might actually think of the people's benefits.

[Vexx]

Unless the individuals within the government are lining their own pockets or those of their friends. Any system is corruptible without oversight. The government has a *slight* advantage of being more amenable to oversight. Corporations are only, in theory, responsible to their shareholders. One would think this would mean that customer service is paramount, or reliability, or longevity, careful planning for the long term, or even to maximize profits legally. In reality, the executives insulate themselve from the stockholders with an "in club" board of directors and rules that really prevent any but the largest shareholders from checking up and usually those institutions are friends of friends and golf at the same places if you get the idea.

[Shadow Kira01]

I believe it should be left the way it is. Letting the government take control of the industry is good at first, but eventually... Officials will grow more and more greedy just like company CEOs. In the short-run, everything would be much better. However, usually we speak of the long-run, since its the economy here.. In the long-run, it would be much worse.. Not just the government would be more corrupted, it is also possible that they might abuse their authority and the country will go backwards in the likes of a possible authoritarian, if not dictatorship.

[Slice of Life]

In communist societies, the state denies you your human rights and provides the basic goods and services. In capitalist societies, that is done much more efficiently by private companies. ^___________^

OK, seriously. General principle: the goal of any economy is the wellbeing of the people. Since private enterprises are in general indeed more efficient than state-run enterprises they should be recruited foremost for this cause. The duty of the state is it to provides a framework of rules, keeping the above principle in mind and ensuring that the market works for the benefit of the people and not vice versa. As long as that is assured, only what cannot be done in a profitable way at all should be tax-funded.

A smart man has once compared the market economy with the engine of a car. It is very useful but only as long as there's somebody who steers the car.


That sounds all very vague but I can't help it. It's just pragmatism. The only -ism one should trust in in the long run.

[WanderingKnight]

Wheee, here comes the South American Marxist-Leninist-pinko communist and terrorist Che Guevara to ruin the fun!

Well, you can't blame me for seeing "The Government" for what it actually ought to be: an extension of the people--the true crystallization of what a society expects of itself.

Of course, that would presuppose a shitload of conditions, namely, a general sense of altruism. It's not meant to be applied to today's society... but ruling it out completely seems ridiculous in my opinion.

[Aoie_Emesai]

Originally Posted by yezhanquan

I personally believe in a mixture and moderation.

That's what I believe in also. While a privately owned and ran business is there to seek max profit through Capitalism, it can get out of hand if doesn't know how to handle it's own gains and profit. The government, I think should only be and exist there to regulate, maintain and support them as a whole. Though the government shouldn't be used as a shield or fail safe.

[yezhanquan]

I think it's paranoid to assume that all private companies would be efficient, or all government agencies would be corrupt. Like Vexx mentioned, it's hogwash. Oversimplification is as bad as turning the issue into quantum physics.

[Slice of Life]

Originally Posted by yezhanquan

I think it's paranoid to assume that all private companies would be efficient, or all government agencies would be corrupt. Like Vexx mentioned, it's hogwash.

I don't know if you're talking to me but since I'm the only one who used the word "efficient" since your last post I assume that you are. If so, please also note the "in general" in my post.

Originally Posted by yezhanquan

Oversimplification is as bad as turning the issue into quantum physics.

I wish economics would turn into quantum physics. Because then we would have a sound and experimentally well-tested theory. And the field would be less populated with ideologues and mouth pipes.

[yezhanquan]

Originally Posted by Slice of Life

I don't know if you're talking to me but since I'm the only one who used the word "efficient" since your last post I assume that you are. If so, please also note the "in general" in my post.


I wish economics would turn into quantum physics. Because then we would have a sound and experimentally well-tested theory. And the field would be less populated with ideologues and mouth pipes.

Er no, SoL. I'm using "efficient" as a generic term. No offense directed or intended.

Aye, economics: science or art? probably a bit of both.

[ZephyrLeanne]

Depends on where you are.
In places with good governance, like Singapore, HK and Japan, usually the government can run things well. But so can the private.

Take JR for instance. It started out as JNR under the Japanese Government. It did relatively well, and the Shinkansen came out between '64-'65. Where it failed was to pander to as many consumers as possible and tried to stretch to Okinawa - which failed. Therefore JNR was split into different sections. Each section hived off or discontinued unprofitable parts and generally concentrated on giving the best service they can.

Or take another example, Singtel. It had a monopoly on Singapore phones for the longest time till M1 and Starhub came in. Not that Singtel was bad, but it was not competitive enough. The private operators gave it a run for their money.

But if you're in US/UK - things are different.

[ashesatdusk]

In places with good governance, like Singapore, HK and Japan, usually the government can run things w

That form of governance also means sacraficing western notion democracy. All those countries have authoritarian or semi authoritarian regimes (weak democracy, strong beuracracy). You can add taiwan and south Korea to those lists. Lastly their still relying on market out comes, many of those countries don't have that much state owner ship, just close networks with private sector with government ability to implement policy. Also keep in mind east Asia is a proxy economy. Their economy is more or less sustained by U.S economy not internal demand. Meaning governance alone doesn't explain the success of the economies.

I'm someone heading off to econ grad school next year, naturally like most people in my field I support markets. That being said I think government intervention is necessary, as well as believe that political policy can have positive economic consequences. I'm not a free market fundmentalist.

Aye, economics: science or art? probably a bit of both

More like philosophy or a science. Economic theory is based of mathematical notions, subject to certain constraints and assumptions.
Analytic philosophy argumentation (Formal logic) uses the same way. The one thing about econ is that the study is using statistics and historical evidence. Though there are different interpretations of what causes those stats in different acedemic subfields.

[Spectacular_Insanity]

Private runs things better, but government has many merits as well.

As a consumer, I think government intervention is important when it comes to things like the food and drug industry. Regulation for things like the medical device industry is also important. Frankly, though the businesses themselves should be run by their respective owners, the government needs to be there to make sure the big (and small) corporations are doing what they should be.

[ZephyrLeanne]

Originally Posted by ashesatdusk

That form of governance also means sacraficing western notion democracy. All those countries have authoritarian or semi authoritarian regimes (weak democracy, strong beuracracy). You can add taiwan and North Korea to those lists.

North Korea = fail. Even a 3-yr-old can tell you that.

Taiwan =/= authoritarian.

Watch their parliament. On CBC.

Singapore has a uber-complex system consisting of Temasek Holdings, GIC and the semi-state-owned corps. Bascially Temasek/GIC buys a chunk of shares of the compny and injects retired/current MPs into the corporations. This isn't really authoritarian, it's just the government being a little too interested, I guess?

Look at Malaysia. Freedom? You bet. Anwar, Dr M, whatever. Mudslinging. But from down south across the Causeway, it's either laughable or saddening.

[ashesatdusk]

North Korea = fail. Even a 3-yr-old can tell you that.

Taiwan =/= authoritarian.

Watch their parliament. On CB

I meant south korea. That post was posted at 4 a.m. Sorry about that.

Taiwan was authoritarian during their economic miracle and development story. The democracy you speak of in Taiwan exists is a grand total of 20 years.


All of east asia's success was under authoritarian or semi Authoritarian regime. The key to understand all of the authoritarian regimes though that economic development was crucial to their success and hence promoted an interventionist market capital society, that promoted policies aimed at maximizing G.D.P growth.

Japan = Beauracracy rule, MITI, MOF, weaker Parliament
Taiwan= KMT dictatorship until 1988
Korea = Military Dictatorship until 1988
China = Authoritarian
Singapore= Authoritarian democracy

The term auhtoritarian =/= dictatorship necessarily. It means having considerable autonomy, enough to go against the peoples immediate will. Which all of these countries have had. Singapore does not have trial by Jury or free speech, despite being a democracy. It also has the highest execution rate per capita as a result.



East Asia is the only example in the entire world of countries in the modern world of countries that were economically impoverished in comparison to the rest of the world, to propsperous. Fastest to industrialize. There government isn't exactly the type of governments that westerners tend to want. That again their economies aren't stronger than most western economies at the moment. High growth was more or less catching up to the western economies. Industrialized countries have a hard time maintaining anything higher than a 5% growth rate. Its usually 2 to 3%. The U.S. is weakening at the moment but its still 25% of the world economy by it self. People seem ot want to forget that.

I personally think that american (MY) government could take some lessons east asia. Part of the reason for lack of effeciency of government projects is the politicization of beauracracy. I think the public sector would be more effecient in general in both Europe and america, if a parliaments/congress was weakened, and bearacracy was left autonomous and hired on qualifications and ran like private enterprises. In america government agencies have numerous regulations on how funds are spent. It would be better if a program was given broad policy goals, and told their budget and let have add it. Our most trusted institutions the Courts, and Federal Reserve are run this way. Though appointments might be given to people with particularl political leanings, they are all qualified. This is not the case in other agencies. It bugs me why politicians who're largely lawyer or business men, write detailed laws on science or economics.

Look at Malaysia. Freedom? You bet. Anwar, Dr M, whatever. Mudslinging. But from down south across the Causeway, it's either laughable or saddening.

Not part of East Asia in my definition. Currently going through economic miracle. Government has considerable autonomy. Handling of East Asian Financial crisis demonstrates this. Also they have an elected monarchy. I'm not sure if I'm willing to call that democracy.