Larklight:
The USA never had colonies...
That's actually not true. US "protectorates" such as the Philippines and Guam are, for most intents and purposes, colonies.
Who said that Corperations have to be all-knowing? They don't have to be, but it is in their interests to be to a certain extent. And they only ever need a fraction of the knowledge that a state would need.
Complete nonsense. They're both groups of people. If a privately owned outfit can find out facts that helps it attend to the needs of the state and the population, then a state-owned one can, too.
And where is the problem with private individuals having all the power? It's not likely to ever condense onto one person, and as I've explained before, monopolies of vital resources are even rarer...
Hong Kong, I suppose, is as close to a Capitalism without liberal leadership as you're likely to get, and it seems fine. The fact is that there are no grand stories of Capitalism killing millions of people, unlike Communism. Becuase it doesn't.
There are no grand stories of capitalism killing millions of people because it isn't a political system. Duh.
What is the problem with private individuals having all the power? Dictatorship.
Ahh, but in a free market, life or death is given by the consumers, not actual strength. Companies cannot physically harm each other, cannot make them any less absolute in their standing. Only consumers can do that.
While all the frills of the markets seem to achieve little, on the whole they create a system with very little wastage. And any their is could be solved with more interested consumers.
Don't forget, this is what the people want. With every dollar spent they're voting for a product. Corporations are answerable to the consumers, and their share-holders.
Very little wastage? Companies spend millions and millions of dollars on marketing and advertising, efforts that do nothing except promote them over their competitors. Likewise, they spend at least as much on legal protections so that their enemies can't saddle them with patent protection lawsuits and such. Sony recently lost a VERY expensive patent battle.
I can't see this as producing anything worthwhile.
That is becuase not all the costs are covered. If they were made to pay the full cost to the enviroment, the real cost, then these problems would not arise. Air could be hard to privatise, so instead anyone who polluted it could be held liable to everyone by pollution cost/world's population. What's wrong with privatising water- it largely is already.
Ideal, ideal, ideal. Every time I point out a problem, you give me a theoretical ideal situation that doesn't exist. Why stop there? Capitalism is great because everyone who works in a capitalism suddenly develops a golden heart and powers of near-omniscience!
Stalker0
The market or the state can be in charge of regulating production of goods, pricing, and so forth. However, in general the market tends to be more efficient at this.
It's a pointless and general statement. BOTH state regulations and consumer spending are necessary forces for an efficient system to arise. Extremes of one or the other are not good.
Why? If the state is voted on by the people, it only has to make sure a minimum amount of good work is done to ensure votes. If the state isn't elected, they don't even have that much to worry about. In order for a company to sell products, it has to make products that people want. If another company comes around that makes a better product, then they will gain more money. Every business decision has a direct impact on profits, so ever decision is important.
Idiotic! Whoever said that consumer feedback can't be incorporated into a state-owned enterprise? Singapore Airlines is state-owned, but it is efficient and profitable.
Now, the issue of infighting and patent wars and so forth were brought up. These things definitely happen, and it does consume a portion of efficiency. Now when I say free market I am assuming Adam Smith capitalism and not completely uncontrolled anarchy. As such, there are governmental regulations that go into place to curb some of this infighting and to encourage companies to compete "in the marketplace."
Adam Smith's ideal free market is about as commonplace as Marx's communism. If we're going to assume an ideal Adam Smith idea, then for fairness, we ought to also assume an equal amount of theoretical ideal for state-owned concepts.
However, even with the infighting that occurs, there is direct competition that produces one very positive side effect, innovation. Companies are encouraged to make products quicker, better, and cheaper to compete against one another. The state just needs to maintain the needs of the populace, it has no incentive to produce innately better goods.
Companies in competition are encouraged to be efficient, regardless of who owns them.
They're also encouraged more directly to engage in efforts that will allow them to kill their competitors, regardless of whether it makes for a better product or if it's actually innovative.
Releasing shoddy product, for instance, at a cheaper price can result in a net benefit for the company. There are any number of shoddy product in many market places today that prove the truth and efficacy of this strategy. Product quality is a weapon, but cheap pricing, even at the cost of quality is also a weapon.
In fact, cheap pricing is so powerful a weapon that external quality controls from the state are necessary to protect consumers, even from economies that boast to be the best of what free markets have to offer.
Quality control is what makes better product, not competition. State-owned outfits with quality control are just as likely if not more to produce quality product and innovative ideas.
The argument of innovation has been brought up, and the talk of scientific research has been discussion. However, pure science is a small part of innovation. Changes in product lines, distribution networks, chemical formulas to increase product quality, etc are all innovations that are important.
Further, I agree that not all innovations are rewarded under a capitalist system. There have been people with great ideas that aren't rewarded for them. But at the same time, innovation is an important part of competition. If company B is doing better than company A, company A has to improve through innovation or die out. That means workers that get laid off. Those workers have innate incentives to promote innovation in their own company for their own individual interest (keep their job) which translates into a benefit for the whole company (improved innovation).
Complete nonsense. Senseless propaganda. If you're going to present an argument, you should present a credible one.
You're
assuming that Company A has to improve through innovation to survive. That's not true. If it was engaging in efficient practices, then one way to compete would be to remove these practices. It could also saddle Company B with legal attacks, or nasty rumors, or any number of completely permissible attacks. It can form exclusive deals with associated product or arrange a merger with a larger company, or flee to a niche market.
It could find an alternate position on the supply/demand curve that sacrifices quality over price, and if that's a more profitable position, then it might even encourage Company B to make shoddier product to compete.
Product development is a major concern of entities at war, but that's not the only way to win, and it isn't an exclusive property of the free market.
The example of Italy and the Renaissance were mentioned as a model for innovation. I agree, that system produces some wonderful scientific discoveries. Unfortunately it requires a very wealthy upper class supported by a large poor population. Basically you need people who have tons of money and all the time in the world to sit around and think of stuff. The middle classes of today's countries would not tolerate such a system.
Modern companies are essentially a very wealthy upper class who have tons of money and all the time in the world to sit around and think of stuff. It's much the same.
The only difference is, Americans belong to a wealthier nation and thus assume that all nations that adopt capitalism will achieve equal amounts of wealth.
In fact, one of the key properties of free markets is the accumulation of wealth by powerful individuals at the expense of the many, and state regulations have to fight this tendency for a more equitable distribution of wealth.
Compared to its upper 500 companies, most of America's middle class ARE poor.
Speaking of the wealthy and poor, it was mentioned that capitalist systems tend to breed wide distributions between wealthy and poor. Problem with statistics like these is you have to be careful of how you define poor. I mean, is a person who has a car and a television but little free income considered poor? Do you have to be starving to be poor? There are many people in the united states that are considered below the poverty line, yet they have no problems feeding themselves and have things middle class people in other countries don't. Should poor be defined country by country, or should there be a worldwide definition of poor?
This is just pointless rhetoric. The tendency of capitalist systems to concentrate wealth is well-known but not fully understood. This is a observable phenomenon that's empirical, and needs no proof.
Finally, I come to the issue of pollution. Speaking as someone with experience in the oil industry of the United States, I can say that free market and environmentalism are not so spread apart as you think. The thing is, often times being green is good for the wallet!! Free companies in the US plant more trees than they cut down, its just good business. Companies are learning to waste less because increasing efficiency increases profits. A company with heavy water pollution may be paid incentives by a fishing company to decrease pollution so that they can increase fishing. Probably the biggest example recently is the increase in gasoline prices, which has caused phenomenal innovation in alternate fuels and gas efficient cars.
Apparently, free market is defined as whichever economic system happens to be winning...
General
If I'm coming across as hostile, please forgive the tone, but I'm getting rather weary of repeatedly refuting rosy idealized views of the free market idea. It's not the best system that exists. It has flaws. Having the state own most if not all of the nation's property doesn't mean that everyone suddenly turns into morons.
State owned companies aren't confined to the Soviet Union, not are they tied to so-called "communist" totalitarian governments.
If you want a study of free market gone bad, I direct you to Philippine economic history from its occupation by American to circa 1990.
A state-owned company that prioritizes efficiency, profitability, and innovation is
no different from a private one. I challenge anyone who thinks otherwise to fault Singapore Airlines for being an inefficient company
because of its state-owned status.
These aren't some sort of rules we imposed on them, they agreed to the terms. We didn't force them to take the money.
And neither did Ireland or Hong Kong or Syngapor...
