Government Companies

[konerko14]

Since there are competitors in markets such as garbage collection, postal services, schools, etc, why does legislature try to keep government companies in business? Several years ago when no competitors existed, it may not have been quite so obvious to some that these government businesses shouldnt exist, but whats their excuse now? What is the purpose of keeping these government businesses around?

[DavidOdden]

What is the purpose of keeping these government businesses around?

To keep people thinking that the function of government is to supply your needs.

[Bold Standard]

Several years ago when no competitors existed, it may not have been quite so obvious to some that these government businesses shouldnt exist, but whats their excuse now?

What makes you think there was a time when no competitors existed?

[konerko14]

What makes you think there was a time when no competitors existed?

I guess I assumed. I didnt think the government would create companies when there are already competitors.

[Vladimir Berkov]

It really depends on the industry. In some there were competitors and private firms at the time the government started to enter the market (utilities), in others the government entering a market with virtually no competitors. (schools)

There are several reasons why the government would enter such a market. For one, government companies are seen by many to be safer than private ones. Too, government often got involved in industries with many private competitors, thus government intervention seemed to create economies of scale which didn't exist before. Lastly, government companies are an easy way to give people things they couldn't afford from the private sector. For instance, public schools give people an opportunity to educate their children even when they couldn't afford a private school. Thus it is easy to see why people would want the government to enter the market in many places.

[DarkWaters]

Since there are competitors in markets such as garbage collection, postal services, schools, etc,

Do not forgot the Pension Benefit Guarantee Corporation.

We seem to be doing better than many other world powers in this respect at least. I remember Thomas Friedman of the New York Times once mentioned in a fairly recent op-ed that 25-50% (I forget the percentage, he was more precise) of state-owned companies in China are bankrupt or just unproductive.

About a year and a half ago Japan decided to privatize their postal system. I wonder how that is working out for them.

[marxist]

We seem to be doing better than many other world powers in this respect at least. I remember Thomas Friedman of the New York Times once mentioned in a fairly recent op-ed that 25-50% (I forget the percentage, he was more precise) of state-owned companies in China are bankrupt or just unproductive.

About a year and a half ago Japan decided to privatize their postal system. I wonder how that is working out for them.

i have something to say about it.

yes, many state-owned companies in China are bankrupt or just unproductive.

because the state don't want to own these companies any more not because the state-owned companies can't perform their functions.they are putting the westen economic idea to be widely used.they don't believe the marxism any more. the official try to make the state-owned companies into their own companies, they are becoming the capitlaist who steal the "capital" from the state. but the workers refuse to do so but they have no army now. it is the only real reason not anything else.

in addition, to Japan economy, it is Government magistral economy not like the USA if you study it carefully. in Japan, after world war 2,

they put the company before anything else, there are lifetime employment system. the worker must put the company before himself.

they regard the company as their family.there are no Individul rights like in USA. there are only the company rights. and in Japan, the government has great effect on economy.can anyone here tell me why this system can make his country to be the second biggest one in economy in this world.

Edited September 29, 2006 by marxist

[Bold Standard]

in others the government entering a market with virtually no competitors. (schools)

This is not true at all, in the case of schools. Actually, I did a research project on this in high school. The public school system is a fairly recent development in this country (I can't remember the exact dates, but I'm thinking late 1800's), and was one of the most radical endeavors attempted by the government up to that time. Private education had been widespread. In order to achieve a monopoly, and force out the competition of private schools, the government utilized many underhanded and despicable tactics. The government schools were inefficient and low quality from the beginning. They were widely ridiculed by intellectuals at the time (such as Mark Twain). But, gradually, they won out, became accepted, and it was eventually forgotten that there ever had been or even could be an alternative. Similar to the nationalization of the railroads-- and every other socialist endeavor that I happen to know much about in America.

(I know I haven't argued or proved these assertions here, or cited my sources, but it's information that's pretty easily available. If someone wants to challenge me on any of it, I can look it up. Unfortunately, I don't have any surviving copies of that research project from high school anymore.)

[Bold Standard]

Lastly, government companies are an easy way to give people things they couldn't afford from the private sector.

Would you consider armed robbery to be an "easy" way for people to get things they couldn't afford from the private sector?

For instance, public schools give people an opportunity to educate their children even when they couldn't afford a private school. Thus it is easy to see why people would want the government to enter the market in many places.

The average tax payer pays more in taxes every year than it would cost to send a child through a reasonably priced private school, whether they have children in school or not. Besides this, the progressive public school system is designed to cripple and indoctrinate the developing minds of children; hardly to "educate" them.

(In many cases, except where there are still remnants of a classical approach to education, which are not necessarily the best possible approach either).