Weekend reflections

It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. In keeping with my attempts to open up the comments to new contributors , I’d like to redirect discussion, and restatements of previous arguments, as opposed to substantive new contributions, to the sandpit(s). As always, civilised discussion and no coarse language please.

6 thoughts on “Weekend reflections

  1. What would be the problem if, in a closed economy, a particular consumer item (say petrol) was provided by a monopoly but the monopoly had to indicate publicly all of its financial transactions, and was prohibited from making super-profits (which would then be visible).

    They would have no incentive to close down as they would obtain normal profits.

    So presumably democracy can control monopoly?

    Marxists would say that a monopoly cannot determine “socially necessary” values because these arise only from a competitive market.

    What would capitalists say? They seem to think we are better off without democracy, and without commercial freedom of information.

    But isn’t freedom of information (or equality of information) one of the necessary first postulates of the market mechanism covered in “taught-economics 101”.

    Doesn’t it seem strange that capitalists try to deal with one monopolist only by creating another to compete with it. The capitalist commentariat then wonder why we end-up with a coordinating cartel that hikes prices and fees as soon as they can, to the hilt. Banking is a good example.

    Presumably the same situation applies to other products and markets to the extent they have a ‘degree of monopoly’.

    So where’s the problem; taught economics? capitalism? or ‘socially necessary values’?

  2. Chris, we in SA have such a monopoly to supply water to irrigators, industry and private homes and it’s called the Central Irrigation Trust.

    The board comes to all customers once a year with all the financials and activities well presented and asks if we want them doing the job for another year. No super profits, just sensibly paid people who’s incentive to do well is keeping a good job as opposed to naked greed and filling the pockets of shareholders.

    I know some trusts have given the institution a bad name, perhaps they were too big or the rules of operation left a lot of room for poor practice to go unnoticed.

    My experience, and the vast majority of customers of this trust are very happy with their service and it could be, should be used as a model for many other services.

  3. There is nothing wrong with the government owning natural monoplies. In fact, it’s the best approach. That’s how this country was built. That’s how the Commonwealth of Australia achieved its genuine peak of common wealth and common good. That’s why there was so much valuable public infrastructure that private interests wanted to plunder.

    Since privatisation became the order of the day, this country has been going backwards. The private corporations pillage and eventually wreck every public asset they get their hands on. Privatised infrastructures will not be able to meet the challenges soon coming with peak oil. Watch as the state has to take back the ruined infrastructure and attempt to rebuild it.

  4. @Ikonoclast
    Some of us doubt they will rebuild it Ikono – the infrastructure needs currently are facing such a backlog from all these years of pro privatisation experiments that even what appear to be relatively simple infrastructures are not being repaired and have not been maintained properly.

    Then there is the problem with people losing skills in these areas as politicians on both sides have pushed the lean government low tax lines (meanwhile youth who is facing extraordinarily high unemployment rates which is being pretty well ignored could actually be more gainfully employed in government infrastructure except that we continue to have this mean approach to the size of government employment unless it means higher up bureacracy on wealthy salaries).

    Some farmers in Victoria really highlighted the problem for me. In recent floods levies that were built 100 years ago have not been maintained for absolutely decades (not even touched) and now have collapsed and there are few signs the water is receding – and it may not and there are even fewer signs that Government even has the resources or skills to repair them.
    Same goes for QLD – are we like a residential unit block that has been living with low levies for years and now needs repairs and we have no alternatives but to beg for a special levy?
    Even the OECD notes Australias weaknesses in infrastructure building and maintenance. Yet some remain unconvinced that they are contributing to the making of this mess with their lean government, low tax, pro privatisation mentalities.

  5. @Ikonoclast

    Yes, a major problem with State-owned monopolies is that corrupt politicians can sell them to capitalists, without the public even knowing until it is to late.

    But if it was privately owned, but still was required to expose all financial transactions, with all super-profits eliminated, would this be a problem?

    Workers Collectives, wrt, the rest of society are private concerns.

    Maybe ownership is not the core problem?

  6. OMG – “London School of Economics Director resigns after revelations of involvement with Gaddafi”

    Google it. How far can governments and the most venerable of institutions economics departments sink (stink?). Guess anything is possible when academia now exists mainly to generate money for its management. Wonder what the head’s bonus was?

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