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Tags economy , environmental policy , nationalization , private sector , regulation

View Poll Results: Should sectors of the economy with a large environmental footprint be nationalized?
Might be a good idea 6 24.00%
Socialist nonsense 9 36.00%
Planet X has no environment 10 40.00%
Voters: 25. You may not vote on this poll

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Old 29th September 2018, 08:20 AM   #1
The Great Zaganza
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Should sectors of the economy with a large environmental footprint be nationalized?

I know this isn't strictly new: in many countries, the energy sector and other industries with a heavy impact on the environment are nationalized.

There are, in my opinion, a couple of very good reasons for this:
  • it obviates the need for regulation: the state can simply run the company in an environmentally responsible way
  • it prevents the need for a trade-off between shareholder demands and regulation compliance
  • it allows for long-term investment in environmentally friendly upgrades
  • it allows for closer inspection and faster intervention in case of problems
  • it avoids having prolonged litigation of cases of pollution
  • ...

It is unfair and problematic both for the state and the private owners of companies to have a conflict over questions of environmental impact: by taking certain sectors from the open market, you remove the pressure to create profit whilst complying to regulations.


I'm sure there are more good reasons for and against this, too, but I can't think of any right now.
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Old 29th September 2018, 09:17 AM   #2
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To make it workable it seems like you would need to isolate whatever department controls the industry from the politicians, who might subvert the environmental protections out of political concerns.

I'd be more comfortable with a private sector monitored by the government than direct government control.
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Old 30th September 2018, 02:08 PM   #3
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What is the real world track record of nationalised industries vs private industries in terms of efficiency and environmental impact? I don't think governments are as environmentally friendly as they are made out to be.
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Old 30th September 2018, 02:39 PM   #4
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I'm not voting in the poll because of its options (nationalization is not exclusive of "socialism", whatever some think socialism may be)

I think a few activities might be nationalized if they depend on really heavy subsidies to comply with environmental regulations.

In general, regulations and strict control mixed control (specific government agencies, companies and public) should be enough.
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Old 30th September 2018, 03:58 PM   #5
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Originally Posted by The Great Zaganza View Post
I know this isn't strictly new: in many countries, the energy sector and other industries with a heavy impact on the environment are nationalized.

There are, in my opinion, a couple of very good reasons for this:
  • it obviates the need for regulation: the state can simply run the company in an environmentally responsible way
  • it prevents the need for a trade-off between shareholder demands and regulation compliance
  • it allows for long-term investment in environmentally friendly upgrades
  • it allows for closer inspection and faster intervention in case of problems
You really have a rosy view of how the government gets things done if you believe any of those four reasons. Governments in general have an appalling record when it comes to environmental issues.

Quote:
it avoids having prolonged litigation of cases of pollution
Largely because the government exempts itself from lawsuits.
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Last edited by Brainster; 30th September 2018 at 03:59 PM.
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Old 30th September 2018, 07:36 PM   #6
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From the New York Times in April 29, 1990:

Eastern Europe: The Polluted Lands
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Old 30th September 2018, 07:46 PM   #7
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Originally Posted by Brainster View Post
Governments in general have an appalling record when it comes to environmental issues.
Can you provide some examples?
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Old 30th September 2018, 07:52 PM   #8
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Originally Posted by psionl0 View Post
From the New York Times in April 29, 1990:

Eastern Europe: The Polluted Lands

Looks like that started to happen in the US, too, but:

https://www.motherjones.com/environm...limate-change/
Quote:
“Half the red spruce… are dead,” Dudley Clendinen wrote for The New York Times from New Hampshire in 1983. “Some of the balsam fir are beginning to look sick. Sugar maples have fallen, as have beech trees, and Dr. Richard M. Klein, one of the two directors of the university’s research project, worries that with spring, they may find that ash trees are down on the mountain, too.”

The prospect of dead forests galvanized Americans and their representatives. In 1990, Congress amended the Clean Air Act to include the Acid Rain Program. The impact on the targeted pollutants, sulfur dioxide and nitrogen oxides from power generation, was remarkable. Between 1995 and 2011, emissions of sulfur dioxide fell by 64 percent; nitrogen oxides by 67 percent.

And the red spruce? According to a study by the University of Vermont and the U.S. Forest Service, released this August, the trees are healthier than ever
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Old 30th September 2018, 07:53 PM   #9
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Originally Posted by The Great Zaganza View Post
It is unfair and problematic both for the state and the private owners of companies to have a conflict over questions of environmental impact: by taking certain sectors from the open market, you remove the pressure to create profit whilst complying to regulations.

I see your point, but I'm not sure that removing the profit-motive of private ownership solves much. In order to run the industry, government would have to tax its citizens at least at cost. Elected officials have a pretty good incentive to keep taxes down. And since elected officials probably won't know much about how energy companies run, there's not much reason to believe they'd do it efficiently - know what to cut and what to invest in.

Also, the average term for an elected official is maybe four years(?) and many have to run every two. They're inclined to create tax policies that satisfy voters immediately. The idea of spending money on research that might decrease energy costs 20 years in the future? That does not sound like an argument I'd want to have with my constituents.

I think there's a good case for nationalizing monopolies. A monopolist company has no incentive to ensure any customer satisfaction of any sort. But if there's competition - as there is in the energy and automobile sectors - I don't see how nationalization helps much.
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Old 2nd October 2018, 05:21 AM   #10
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Start with agriculture?
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Old 2nd October 2018, 05:32 AM   #11
The Great Zaganza
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Originally Posted by Distracted1 View Post
Start with agriculture?
Good point.
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Old 2nd October 2018, 05:54 AM   #12
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Originally Posted by kellyb View Post
Looks like that started to happen in the US, too, but:

https://www.motherjones.com/environm...limate-change/
Acid rain comes from power generation. Power generation is heavily tied to government fiat. Pollution from power generation is on the government's soul.
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Old 2nd October 2018, 07:43 AM   #13
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Originally Posted by aleCcowaN View Post
I'm not voting in the poll because of its options (nationalization is not exclusive of "socialism", whatever some think socialism may be)

I think a few activities might be nationalized if they depend on really heavy subsidies to comply with environmental regulations.

In general, regulations and strict control mixed control (specific government agencies, companies and public) should be enough.
I disagree with the second paragraph, but otherwise correct, and since that isn't a poll option, I voted Planet X. Regulation is necessary. Nationalization isn't. Government ownership should be limited to areas that are the natural function of government, public safety (police, fire), military, roads, etc.
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Old 2nd October 2018, 07:50 AM   #14
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Originally Posted by kellyb View Post
Looks like that started to happen in the US, too, but:

https://www.motherjones.com/environm...limate-change/
Accomplished without nationalizing any of the offending industries. Regulation and/or a system to force internalization of costs when there are environmental externalities has proved to be effective, I see no reason to deviate from this model.
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Old 2nd October 2018, 08:02 AM   #15
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Whether through regulation or other means, what other entity is there but the government to protect the environment? Certainly private institutions aren't going to hobble themselves by protecting the environment at the cost of profit?

I rather like this.

Originally Posted by Brainster View Post
Governments in general have an appalling record when it comes to environmental issues.
Originally Posted by kellyb View Post
Looks like that started to happen in the US, too, but:

https://www.motherjones.com/environm...limate-change/


Brainster, if not the government, who do you expect to protect the environment?
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Old 2nd October 2018, 12:02 PM   #16
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I feel like "Regulation" and "Nationalization" are being treated as the same thing.

It's perfectly possible, in some/most/a lot of cases regulate an industry without taking it over.
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Old 2nd October 2018, 12:30 PM   #17
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@OP: No. I favor private enterprise.
  • I also think citizens can make laws that constrain private enterprise (and also insist it not ignore tangible long-term costs). If not, democracy is a farce.
  • I further hold that democracy should not be self-contradictory and ignore its foundations, meaning that human rights cannot be hand-waved away, nor can political equality. In fact, achieving political equality should be a primary stated goal in any system of governance claiming to be democratic. Translation: Unfettered, universal adult suffrage without material restriction, resulting in the closest proportional match possible in terms of votes and elected representatives.
  • The foregoing should include awareness that all of the people some of the time, and some of the people all of the time, will be total and complete ********. This means republicanism in governance and separation of powers, never direct democracy (lynch mobs, "lock her up).
  • Matters of fact may be resolved using only fact-based reasoning and science. Preferential reasoning may most definitely not so resolve, regardless of electoral outcomes, who is in power, or who sits on a bench.
Above all, I believe the moment a democracy is considered writ in stone and the subject of statues and honors, it embarks on the path to certain death. Democracy must be argued from first principles each generation, so that law may fairly change while commitment to fair and just governance does not.
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Old 2nd October 2018, 01:16 PM   #18
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Originally Posted by 3point14 View Post
if not the government, who do you expect to protect the environment?
Protect the environment? Sure.

Run a profitable enterprise with taxpayer money? Not so much.
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Old 2nd October 2018, 03:12 PM   #19
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Originally Posted by theprestige View Post
Protect the environment? Sure.

Run a profitable enterprise with taxpayer money? Not so much.
I am not convinced that profitability should be the main concern in many endeavors.
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Old 2nd October 2018, 04:39 PM   #20
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Originally Posted by Distracted1 View Post
I am not convinced that profitability should be the main concern in many endeavors.
If it's not the main concern in enough endeavors, the entire thing falls apart.

New endeavors are funded from the surplus wealth of existing, profitable endeavors. Government survives entirely by skimming the surplus wealth of profitable endeavors.
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Old 3rd October 2018, 03:06 AM   #21
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Originally Posted by theprestige View Post
Protect the environment? Sure.

Run a profitable enterprise with taxpayer money? Not so much.
I don't believe I said that they did. Why do you mention it?



Originally Posted by theprestige View Post
If it's not the main concern in enough endeavors, the entire thing falls apart.

New endeavors are funded from the surplus wealth of existing, profitable endeavors. Government survives entirely by skimming the surplus wealth of profitable endeavors.
Profitable endeavors only exist due to the extremely stable environment created by governments. The taxes they pay at a rate decided by the electorate for services received to enable them to operate is not something I would describe as 'skimming'
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Old 3rd October 2018, 03:12 AM   #22
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A Carbon Credit system would need to be run by the State (or something accredited by it).
And it might be cheaper to pay the government in taxes than the companies for products plus profits.
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Old 3rd October 2018, 08:05 AM   #23
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Originally Posted by 3point14 View Post
I don't believe I said that they did. Why do you mention it?
I was relating my reply back to the larger scope of discussion in this thread.

Quote:
Profitable endeavors only exist due to the extremely stable environment created by governments. The taxes they pay at a rate decided by the electorate for services received to enable them to operate is not something I would describe as 'skimming'
Please consider the possibility that I am not using that definition in this context.
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Old 3rd October 2018, 08:07 AM   #24
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Originally Posted by theprestige View Post
I was relating my reply back to the larger scope of discussion in this thread.


Please consider the possibility that I am not using that definition in this context.

In financial terms 'skimming' always comes with negative connotations. It's just the wrong word to use. But I get what you mean now, thanks.
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Old 3rd October 2018, 04:03 PM   #25
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Might I suggest "taxing"
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Old 3rd October 2018, 09:30 PM   #26
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Originally Posted by Distracted1 View Post
Might I suggest "taxing"
I think it is important to couple taxes to the externalities - taxes might be spent on other things than undoing environmental damage.
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Old 4th October 2018, 11:48 AM   #27
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I've always thought the goal should be to try and create conditions where profitability points in the direction of the desired behavior. Of course, that's not always possible.

For example, taxing energy production based on the amount and type of waste produced, rather than the energy produced? That provides a clear profit motive to look for more efficient and clean processes, instead of the current "how much do we have to do to comply with law and avoid a fine". Dunno how to work it out in practice, though.
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Old 4th October 2018, 12:06 PM   #28
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Originally Posted by Distracted1 View Post
Might I suggest "taxing"
Certainly. Taxing is the conventional term.

However, in this case I wanted to use a different term, to emphasize something that I think often gets overlooked, or taken for granted. Which is that government funding depends on having enough people doing enough profitable work, for the government to be able to skim their funding off the top of those profits.

I don't think governments should be in the business of generating profits. But governments must necessarily be in the business of taking profits. And for that, governments depend on there being profits out there for them to take.
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Old 4th October 2018, 07:38 PM   #29
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Originally Posted by Hellbound View Post
I've always thought the goal should be to try and create conditions where profitability points in the direction of the desired behavior. Of course, that's not always possible.

For example, taxing energy production based on the amount and type of waste produced, rather than the energy produced? That provides a clear profit motive to look for more efficient and clean processes, instead of the current "how much do we have to do to comply with law and avoid a fine". Dunno how to work it out in practice, though.
In Australia we call that a "carbon tax" but it is a difficult thing to sell to the public if it results in higher electricity prices and the corporate beholden Libs make sure that the public is well aware of the link.
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Old 6th October 2018, 01:40 PM   #30
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I don't think they are nationalized because of their ecological impact. It is more due to the fact that public utilites (power, water, mass transit, etc.) are natural monopolies. There are many other industries that have large ecological footprints that aren't nationalized (agriculture, industry, non-mass transit).
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Old 7th October 2018, 04:36 PM   #31
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Originally Posted by theprestige View Post
But governments must necessarily be in the business of taking profits.
Nonsense. Corporate income tax is only about 9% of total Federal tax revenue. If every business decided to run at zero taxable profit it would make hardly any difference, especially if they did it by raising wages.
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Old 7th October 2018, 05:09 PM   #32
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Originally Posted by Roger Ramjets View Post
Nonsense. Corporate income tax is only about 9% of total Federal tax revenue. If every business decided to run at zero taxable profit it would make hardly any difference, especially if they did it by raising wages.
Corporate income is not the only place profits are realized.

Of the other 91% of government revenues, what part of it is *not* a taking of surplus wealth from some profitable activity in the private sector? Personal income tax? Profit-taking. Fees and tariffs? Profit-taking.

Revenue from the sale of T-bills? Maybe.
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Old 8th October 2018, 03:46 PM   #33
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Originally Posted by theprestige View Post
Corporate income is not the only place profits are realized.

Of the other 91% of government revenues, what part of it is *not* a taking of surplus wealth from some profitable activity in the private sector? Personal income tax? Profit-taking. Fees and tariffs? Profit-taking
Definition of Profit
Quote:
Profit is a financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs and taxes needed to sustain the activity. Any profit that is gained goes to the business's owners, who may or may not decide to spend it on the business. Profit is calculated as total revenue less total expenses.
'Surplus wealth' is not profit. A business does not have to be 'profitable' to create wealth. An efficient business only makes enough profit to finance future expansion and keep its owners happy - anything more just gives competitors an opportunity to undercut it.
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Old 8th October 2018, 07:35 PM   #34
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Dubious times for any suggestion that might end up being a business Trump installs his cronies to run.

The guy gives away top salary positions to anyone he takes a liking to.
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Old 8th October 2018, 10:16 PM   #35
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Depends on which nation, right?
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Old 9th October 2018, 07:42 AM   #36
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Originally Posted by Roger Ramjets View Post
Definition of Profit'Surplus wealth' is not profit. A business does not have to be 'profitable' to create wealth. An efficient business only makes enough profit to finance future expansion and keep its owners happy - anything more just gives competitors an opportunity to undercut it.
Nice post.

Extending that thought a bit. In the classic idealized free market profit beyond this level can’t even exist because competition squashes it. The fact that it occurs tells you the idealized model isn’t playing out, and this in turn means that you also don’t get the benefits of an idealized free market.

In the real world version of a free market you need some level of government action to make it work something like the idealized free market, but the level of intervention required needs to be looked at on a case by case basis. Of course, this requires money, which comes from taxation.
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Old 9th October 2018, 06:51 PM   #37
Roger Ramjets
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Originally Posted by lomiller View Post
you need some level of government action to make it work something like the idealized free market,
In the US we do things a bit differently. Big businesses spend billions pressuring the government into giving them tax breaks and subsidies, bust unions, waive environmental regulations and stifle competition. And if that's not enough for them they run for office and give it to themselves!
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Old 9th October 2018, 06:56 PM   #38
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Old 10th October 2018, 03:28 AM   #39
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Confession.

I think we're using centuries old terminology to describe modern social dynamics.

The government and business sectors are too interlinked, too interdependent, and too co-dependent on each other for a "Should the power rest with the businesses or the government" to be a meaningful questions some of the time.

Let's say you think the government (or vice versa) has too much power over X and that some of the power over X should given over to business (or vice versa.)

Very little functionally changes. Governments relay on the private sector for too much of the actual work and the private sector still relays on (or is held down by if you wish to look at it that way) the government for much of its decision making.

And with the level of inter-connectivity that government and business have you can be in government and wield so much power in business (and vice versa) that hand wringing over whether the power is in government or business is often, not always but often, rather pointless.

That's why I bristle at the "But who will pave the roads?" rebuttal to libertarianism. Do people think the government paves roads now? When's the last time you saw "Road Paver" on your local ballot? The government decides to pave the roads and they hire private business to actually do it. And that's true for a lot of the things.

And another point people often miss is that positions of power just attract certain people and they go where the power is. Powerful people like running big business in capitalist societies and government agencies in socialist societies because that's where the power is. Move the power from one sector to another and the people who crave power are just gonna move with it and we're right back where we started a generation or two down the line.

In America at least (and I'd wager in most other comparable countries this is true to at least some degree) if we "nationalize" a major industry the same people are going to going to still be in charge of it.

So much of our political theory is still based on treating the government, the businesses, and "the people" being these three largely separate, distinct, and independent entities and I'm not sure if modern political-economics can really be accurately described under that framework.
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Last edited by JoeMorgue; 10th October 2018 at 03:41 AM.
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Old 10th October 2018, 05:29 AM   #40
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Originally Posted by JoeMorgue View Post
Confession.

I think we're using centuries old terminology to describe modern social dynamics.

The government and business sectors are too interlinked, too interdependent, and too co-dependent on each other for a "Should the power rest with the businesses or the government" to be a meaningful questions some of the time.

Let's say you think the government (or vice versa) has too much power over X and that some of the power over X should given over to business (or vice versa.)

Very little functionally changes. Governments relay on the private sector for too much of the actual work and the private sector still relays on (or is held down by if you wish to look at it that way) the government for much of its decision making.

And with the level of inter-connectivity that government and business have you can be in government and wield so much power in business (and vice versa) that hand wringing over whether the power is in government or business is often, not always but often, rather pointless.

That's why I bristle at the "But who will pave the roads?" rebuttal to libertarianism. Do people think the government paves roads now? When's the last time you saw "Road Paver" on your local ballot? The government decides to pave the roads and they hire private business to actually do it. And that's true for a lot of the things.

And another point people often miss is that positions of power just attract certain people and they go where the power is. Powerful people like running big business in capitalist societies and government agencies in socialist societies because that's where the power is. Move the power from one sector to another and the people who crave power are just gonna move with it and we're right back where we started a generation or two down the line.

In America at least (and I'd wager in most other comparable countries this is true to at least some degree) if we "nationalize" a major industry the same people are going to going to still be in charge of it.

So much of our political theory is still based on treating the government, the businesses, and "the people" being these three largely separate, distinct, and independent entities and I'm not sure if modern political-economics can really be accurately described under that framework.
As an ordinary citizen, I have no direct influence on the behavior of business.
With government, I can at least exercise a minuscule amount of direct influence, given that the government is in place to (theoretically) respond to my concerns.
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