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Pondering Socialism

January 20, 2012

I have never really considered myself a socialist, but there is one aspect of socialism that I do have a lot of sympathy with. That is the state ownership of services and facilities.

That’s not say that I think that capitalism isn’t capable of providing excellent quality services and facilities, because I think it can. However, the current trend towards boardroom greed puts the consumer at the bottom of the priority pile and the shareholder at the top. This is the wrong way round.

The population depends on excellent services and facilities and when the demand for higher and higher profits and share price performance gets in the way of providing good quality service at reasonable prices then it’s the consumer who will suffer. The big issue with services and facilities is that often there is little alternative to the end user and so the company concerned ends up with a monopoly which means there is no drive to become competitive or consumer focused.

Train Operators

Train operators are a good example of what I mean. Here in theUK, the train operator that you use depends on the region of theUKyou live in, so there is no real consumer choice over the train services that you use. What was once British Rail is now broken up into several different train companies operating services on a rail network that is owned by yet another company. Multiple companies mean multiple boardrooms and multiple sets of shareholders and share prices to satisfy.

Each year, these companies post good profits and yet the consumer at the end sees fair rises that are higher than inflation at a time when the majority of the people who rely on the trains to get to work each day are on salaries that are either static, or have risen by less than the rate of inflation. Expand this across all the services and facilities that we pay for and you get a picture of families with extremely stretched incomes where the cost of everything has gone up to point where some families are now having to choose which non-essentials to sacrifice so that the basics can be afforded.

What’s this got to do with Socialism?

This is one area where I have think that government ownership of such services is a better idea that letting the free market manage it. The company could still have shareholders and a board, but the objective is to provide a service to the customer and not to have a profitable bottom line. Of course, to turn a profit should be a target, but on the occasional year, say if some major investment is required, it will be okay to not be profitable. I won’t go so far as to say that the tax payer should always subsidise this type of service, it should attempt to be profitable, but the profit aimed for should be modest, enough to put aside for future investment so that consumer prices are kept to reasonable and predictable levels. The kind of unregulated price increases that have been seen of late are not acceptable.

How about facilities?

I feel similarly about facilities such as water, electricity and waste. The driver should be excellent service to the consumer at a reasonable price. Excessive profits should never happen and surplus should be turned round into future investment so that the service is always as efficient and environmentally sound as possible.

Facilities such as those mentioned above are essential to everyone and the day to day reliability of them is paramount. Its also insane to consider that some people are now struggling to afford them having had prices of everything rise steeply and no salary rise to match.

I’m not saying that facilities should be run as a charity, but they should not be treated as just another private enterprise.

A different type of company?

In discussion about this particular issue round the dinner table recently I found that I am not alone in thinking like this. There are others who think that the capitalist way of working does not, or should not, apply to services and facilities and that at the very least there should be a separate tier of enterprise for this type of company that restricts its activities or binds its policies.


From → comment

  1. I remember when I was young, and at that time was in Australia. The political right would always argue that socialism was terrible, and they pointed to the state run railroads to prove their point. (The left pointed to the state run telephone system, to argue the opposite).

    Then I moved to USA for graduate school. And there, the railroads were privately run, but they were in just a sad a shape as the railroads in Australia.

    My own view? Some things are better run by government, and some are better privately run. It isn’t always easy to decide which is which.

    • limey permalink

      HI Neil, thanks for the comment.

      Re your last paragraph, I do agree, it is who is up top that is important not what. If those running a company (be it a service or not) run it in an ethical manner, it really doesn’t matter if its a public company, a privately owned company or a government owned company.

      I guess my point was that if it is a government owned service company, at least there is a mechanism to force the company to be managed in a particular way.

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