[Baff]

[Baff]a capitalist socialist economy[/baff]
I believe I have now seen everything. I cannot believe what I am reading.

Economically the UK is a 50 50 split. Half state sector half private sector.
Economically the country operates on a capitalist system.
Politically it operates on a socialist system.

Now the left says too much capitalism and the right says too much socialism.

But economically it's a 50/50 split between the socialised sector and the privatised sector.
Can socialism even exist without capitalism? I'm not sure it can.

I think that would then be called communism.(?)

But yes the split is 50/50 here. 50 pence in every £1 you earn goes to the taxman for use on socialised projects. The other 50p stays with you. You little capitalist you.


So we live in a capitalist socialist country. Like so many other countries do in fact. Politically socialist, economically capitalist.

[Rei Murasame]

If you think that the public sector in the capitalist state is 'socialism', I don't even know where to start with you. Words have meanings.

[Figlio di Moros]

I have no problem with not-for-profit investment companies, broadly understood to mean companies making investments under a mandate that doesn't view returns on those investments as a primary criterion for success.

Broadly correct; not-for-profit companies generally occur profits in the process of during business, but they do not go to shareholders or an owner nor are they legally obligated to maximize profit (contrasted w/ practical realities, requiring a steady stream of income in order to perform it's stated goal). I see not-for-profits being a viable, practical alternative to our current economy for several structures; we've discussed credit unions already. I would think not-for-profit insurance and healthcare (wherein doctors still earn a living but neither hospitals nor insurance companies attempt to maximize profits) would be strategically optimal in the near-future. I would not be surprised if there were some form of discrimination against them as well, given the legal barriers to credit unions, though the massive amounts of investments required for either are possibly practical limitations in and of themselves.

I don't see how GSE-financing is not taxpayer dollars in anything but accounting tricks.

I'll have to take your criticism w/ a grain of salt, given how many viable private businesses operate w/ subsidies from the government. A GSE would issue loans which would be repaid, having a high enough interest rate to cover risk. this would only be "subsidized by taxpayers" to the same, and generally smaller, rate than private industry is; it's the same complaint about Amtrak being "subsidized by the government" while ignoring air travel requires massive airports built by local governments, or trucking requiring government built and maintained roads.

On a tangent, transportation ought to be operated as a GSE; we'd waste a lot less if it functioned on the investment-model.

[Eran]

As I said, I have no problem with not-for-profits, though I also have absolutely no problem with for-profit corporations.

I don't understand why some essential services (housing, food) are routinely provided by for-profits, and nobody seems to mind, while others (health, education, roads) "must" or are better provided on a not-for-profit basis.

I'll have to take your criticism w/ a grain of salt, given how many viable private businesses operate w/ subsidies from the government.

I strongly object to all government subsidies. I agree that the difference between GSE's and supposedly-private corporations may well be more one of degree than of kind.

[Baff]

Same as that.

I'm happy to work in a commune, I'm happy to work in a corporation. It's all the same to me.
I do some work, I get some money. All the rest is nonsense.

Ideally of course, I just work for myself.


P.S. a business that is operating with government subsidy is not a busines one would typically associate with the word "viable".
More usually we would consider that to be a strong indication that it is unviable.

[Figlio di Moros]

In other words, Baff, there's no such thing as a viable business...

[Eran]

What Baff should have said is that "a business which depends on government subsidy is not a viable business".

The incidental support all of us get from government (e.g. through using public roads to commute) comes at a much greater cost (in taxes and regulatory burden, for example) than it is worth.

[Baff]

In other words, Baff, there's no such thing as a viable business...

Incorrect.
Plenty of businesses exist worldwide quite without subsidy.

A subsidy is typically needed when the business does not make enough money to keep going or not profitable enough to attract investment and even get started in the first place.

Now, it is possible for a viable business to receive a subsidy. But more typically we associate a subsidy with unviability. Bail out. Rescue plan. Nationalisation. Ideological promotion.
Not something that can pay for itself on the strength of it's own merits.

[Baff]

What Baff should have said is that "a business which depends on government subsidy is not a viable business".

The incidental support all of us get from government (e.g. through using public roads to commute) comes at a much greater cost (in taxes and regulatory burden, for example) than it is worth.

In this example, a business is more likely to be the subsidiser of other peoples road use than it is the subsidee of other peoples road taxes. Businesses pay more tax than Joe Average does. Way more tax. It's called progressive taxation I expect.

In order for a business to be viable in my country it must not only be profitable but also very taxable.
The taxman will close a business down far faster than any angry creditor will. If you are going to miss a payment, don't miss your tax payment.

[Figlio di Moros]

Plenty of businesses exist worldwide quite without subsidy.

Name one.

[Rothbardian]

Name one.

The largest employer in the world

http://www.ebay.com

[Figlio di Moros]

I'm sorry, but in what world did the government not only not create the internet, but finance the necessary infrastructure for it as well? Even today, subsidies pour into the essential infrastructure online businesses use. Oh, not to mention the post office, which performs all their shipping.

[Eran]

I'm sorry, but in what world did the government not only not create the internet, but finance the necessary infrastructure for it as well? Even today, subsidies pour into the essential infrastructure online businesses use. Oh, not to mention the post office, which performs all their shipping.

I think we need to clarify the meaning of the word "subsidise".

Would you say your life is "subsidised" by the supermarket from which you buy your food? By the department store in which you by cloths? By Amazon from which you might buy your computer?

Of course not - you pay for those goods. You benefit from cooperating with those retailers, and countless others globally. But since you pay for what you get, the relationship isn't one of subsidy.

The same holds with respect to the essential services provided by government - to the extent that a business pays for those services (through taxes), the relationship may be one of mutual benefit, but not necessarily subsidy.

In fact, most businesses probably pay much more by way of taxes (direct and indirect) than the value of the services they get from government - as judged by the cost of providing similar services in a competitive environment.

[Rothbardian]

I'm sorry, but in what world did the government not only not create the internet, but finance the necessary infrastructure for it as well? Even today, subsidies pour into the essential infrastructure online businesses use. Oh, not to mention the post office, which performs all their shipping.

Government created the internet with the intention to use it as a weapon. That is the one thing the state does well; kill and destroy. How much sooner would we have had the internet if so much of our resources wasn't diverted to waste and destruction? Not a question that's possible to answer, but useful to illustrate how short sighted you seem to be.

You also don't seem to know what 'subsidize' means.

[Baff]

[]Plenty of businesses exist worldwide quite without subsidy.[]

Name one.

My computer consultancy business.
My events company.
My PA company.
My TV production company.
My shop.
My farm.
My landlording business.
My gardening business.
My leaflet delivery service.
My school.
My cider press.
MTV.

In fact I'm having a hard time thinking of a single company I've been involved in that does take subsidies.

BP.
Shell.
Tesco.
Marks and Spencer.

By and large all those companies in the private sector which are profitable.
You know, the ones that financially support the nation.


All those business which pay more tax than they get back.
I live in a progressive tax system. By it's very nature, the richer subsidise the poorer.

50% of the economy is subsidised, 50% of the economy subsidises the other 50%.

We can't all get paid, someone has to pay us. Maths is like that.
It's not possible for everyone to be subsidised. For every subsidy there is a matching subsidiser.

So those companies that create the wealth are typically subsidising many of those who consume it.
The oil industry here is taxed at about 80%. So any oil company is likely to be a subsidser.

The green energy companies here on the other hand are net recipients of tax. They are subsidised. As is the nuclear industry. These are all subsidised through the gas and coal industries that share use of the same electricity grid.

[mikema63]

There are direct subsidies and then there are indirect subsidies.

Even property protection in the form of police on the governments dime is a subsidy in the sense that you don't have to pay for the protection.

[AFAIK]

Selling libertarians on worker owned companies

I'd buy one but I prefer not to work.

We currently live in political economies. There are many reasons why the state may wish to subsidise private businesses, fund state owned enterprises or provide goods or services free at the point of use. The state may also wish to ban certain commercial activities. It often takes decades for a new business to become profitable. The state may also be concerned with a variety of positive and negative externalities associated with various goods and services.

I'd imagine some people would be willing to earn lower wages in a co-op that provided greater autonomy and job security than capitalists.

[Baff]

I'm not sure a co-op does offer job greater security.
The UK's big Co-op conglomerate just went bust. It's supermarkets are flagging.

The key difference as far as I can see is that in a Co-op you get bondholders not shareholders and bondholders and for some reason anti-capitalists see a massive ideological difference between the two. Where all I see is two bits of paper that do the same thing.

There are direct subsidies and then there are indirect subsidies.

Even property protection in the form of police on the governments dime is a subsidy in the sense that you don't have to pay for the protection.

That's just it though, I do have to pay for it.
It's me that subsidises these services.

They don't subsidise me. I get no money from them. The police don't protect me and I have to do it myself or hire others to.
I subsidise them. They get my money.

They produce nothing I value in return. I do not trade for their services. I subsidise them.

In a progressive tax system, high earners pay more tax for an equal level of service as low end users.

The actual cost of service provision is less than what some people pay and more than what other people pay.
Now even assuming that anyone at all, richer or poorer even values or indeed uses all these services... let alone every taxpayer....
Those who pay more are subsidising the services of those who pay less,



And anyone operating those services is operating under 100% subsidy. Even their own tax contributions are subsidised on their behalf. Paid for out of subsidy.
Even govt subsidies to the private sector... are ultimately subsidised by the private sector tax payer lol! It's a right mess.

[mikema63]

Everyone pays into these services but not everyone uses them. Thus its cheaper for you than it would be if users were the only ones paying and a lot of people who don't use it at all are simply losing money.

[Eran]

But then it is more expensive for those who pay and don't use the services.

A system whereby everybody pays, but only some benefit is inherently inefficient. It is, in fact, a classic form of externality, in which users externalise their costs on the public at large.