Suggestions about privatising and nationalising industries

In this topic I want to make a few points about privatizing and nationalizing industries.

  1. Why does nationalizing certain industries increase productivity while in reality privatization increases productivity because those industries now want to make as much profit as possible and thus will try to work as productive and efficient as possible?

  2. When privatizing an industry it should decrease earnings because now people have to pay for it themselves instead of the government providing it for free.

  3. Privatizing an industry should slightly increase corporate tax/capital gains tax since these private industries will now make profits and sell stocks on which they now need to pay taxes.

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Regarding point 3, I’d say that to simplify things, just make the privatized version produce a slight GDP bump. That pretty much covers all the bases without needing to have 4 or 5 things directly affected by each industry.

Regarding point 1, I think you are referring to the rail service. This game strongly values people and materials moving efficiently, and the productivity bonus from the rail service relates to it being provided at minimal cost to any end user, even if providing to someone isn’t immediately profitable to the rail service at the time they are moving. In the bigger picture, it just makes for a more efficient society when everyone can get themselves and their stuff moved even if they don’t have much money to spend right now.

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This isn’t necessarily true, because in a lot of cases a nationalised industry still means people need to pay for it. Nationalising the railway doesn’t mean the govt stops charging fares, but instead it becomes easier to do that if they wanted to. In reality, they want to keep the cost to keep govt costs low but still want to keep consumer price low for the productivity boost

Stuff doesn’t work better if and only if it’s profitable. The de-nationalisation of the American rail network has led to a vastly less efficient rail network because trains don’t make much money. Vastly reduced public infrastructure spending in the US and increased use of private energy and water firms has led to massive blackouts and water shortages that make global news.

It’s in the interest of businesspeople to suggest that the free market will provide the best possible option due to the nature of competition, but not every market works that way. Some of the crap we need doesn’t make a lot of money and charging a higher cost prices people out, so leaving it up to the market alone means some things just steadily stop working.

From a mechanic standpoint, there has to be reasons why Capitalist and Socialist decisions provide different advantages. It’s not terrific game design if one of the decisions costs more AND doesn’t work, especially when that’s not how those systems function in practice. Governments all over the planet, left and right wing, do things for reasons. One of those directions can’t be modeled as a hopeless, pathetic waste.

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Competition works when the barrier to entry in an industry is low. In many industries the barrier to entry is simply not low, whether this is caused artificially by duopolies or monopolies or naturally by knowledge and money barriers.
Without adequate competition that profit motive will naturally lead to worse quality products as that would cut costs. This is most obvious with public transport like trains due to their high barrier to entry it is naturally a oligopoly or worse and so there is very little incentive to run it effectively.

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The thing with trains is that they are naturally a monopoly, as there is a limited and set number of railways and train stations. Even capitalists often argue in favour of nationalisation of trains for this reason, competition doesn’t work where there is monopoly.

However, and this will also serve as a reply to the comment you left on my thread a few moments ago as we are talking about the same thing, barrier of entry is only a problem in the abstract. While it is certainly hard for a totally new business to start up into a market that has big players, it is not so hard for a big player to enter into a market with other big players. Consequentially, what often happens is that a business can grow in one field or one region, where the barrier of entry is low, and then generate wealth and expand, and then eventually enter into the new market where they otherwise would have been destructively priced out.

Furthermore the tendency of the rate of profit to fall, which I believe is what you are framing your beliefs on (correct me if I am wrong), is not necessarily guaranteed in an economy. It is a consequence of a point where technology can advance no further, so that increase in production can increase no further nor can efficiency, and consequentially the companies, having all reached this ultimate state of automation, now compete to cut costs as quickly as possible to beat the others. This, of course, is challenged as well. Rate of profit to fall doesn’t consider that there would be a basic consumer demand for a certain standard of product and that dropping below it would not lead to anger and demand for a higher quality product which would then be met by one of the competitors who was slow to cut prices, giving them the edge for so long as they retain quality.

It also does not consider the potential for infinite growth, or at least infinite opportunity for growth at any given moment. Batteries were thought to have once reached their limit, before being found to go to 10x the capacity some years later and revive interest in them, now they say the new limit has been reached, but how we different to say that now than we were when we falsely said it before? The battery example is true for many other areas. There may in fact be a point of technological perfection, but the chance of reaching it any time soon is highly unlikely.

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