Why can’t the british government make our nationalised industries efficient without selling them?
October 29th, 2009 | by admin |How can private industries make a profit doing the same thing as nationalised industries make a loss doing?
Government is inherently inefficient. Governments do not work the same way industry does because they are concerned with such a wide scale of things with so many sources of input.
For example, the only input a corporation has is from its major stockholders, board-members, customers and some government regulation. The only thing a corporation is concerned with is their own business. A corporation that makes shoes is not concerned with generally agricultural output and civil liberties.
However, a government is getting input from (hopefully) its citizens, private industries, lobbies, politicians (all vying for personal gain) and many more. They are concerned with all sorts of things. Large and very active governments like those in Europe are involved in even more.
Corporations are also subject to competition. Ideally, a private corporation’s income is based on profit. More profit is made by selling the most product/service at the highest profit margin. This is often achieved by lowering price, increasing quality or some combination of the two. If a company does not make a profit, they generally fail (although, in this era of bailouts, that is not always the case) or face some kind of undesirable outcome. If a government or government run industry fails, they still have the taxpayers to fall back on. If they fail to turn a profit, they can always dip into the taxes. That means there is no incentive to provide a good product at a good price and the industry suffers.
4 Responses to “Why can’t the british government make our nationalised industries efficient without selling them?”
By ▐▀▀▼▀▀▌ ►B☻B◄ ▐▄▄▲▄▄▌ on Oct 29, 2009 | Reply
They have been slacking for years being seen to be doing the right thing. They are not natural born leaders who will never kid the masses into anything but do anything and everything they can for them.
They have thrown the masses to many carrots for me this is why they had to reign the banks back. The more carrots they throw the masses the more infected the food supply becomes.
I say they nationalise it all back and take control again. we need a revolution i think or some innovations in technology to export again.
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By MikeGolf on Oct 29, 2009 | Reply
Because private industry is not hobbled by politics when they make business decisions. Another thing to remember is that private industry has to be able to pay its own way – they cannot get government funding to cover losses so they have to turn a profit.
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By Headtater on Oct 29, 2009 | Reply
Government is inherently inefficient. Governments do not work the same way industry does because they are concerned with such a wide scale of things with so many sources of input.
For example, the only input a corporation has is from its major stockholders, board-members, customers and some government regulation. The only thing a corporation is concerned with is their own business. A corporation that makes shoes is not concerned with generally agricultural output and civil liberties.
However, a government is getting input from (hopefully) its citizens, private industries, lobbies, politicians (all vying for personal gain) and many more. They are concerned with all sorts of things. Large and very active governments like those in Europe are involved in even more.
Corporations are also subject to competition. Ideally, a private corporation’s income is based on profit. More profit is made by selling the most product/service at the highest profit margin. This is often achieved by lowering price, increasing quality or some combination of the two. If a company does not make a profit, they generally fail (although, in this era of bailouts, that is not always the case) or face some kind of undesirable outcome. If a government or government run industry fails, they still have the taxpayers to fall back on. If they fail to turn a profit, they can always dip into the taxes. That means there is no incentive to provide a good product at a good price and the industry suffers.
References :
By Kit Fang on Oct 29, 2009 | Reply
Look at the railways. To make a profit the private companies charge exuberant fees, and will wait as long as possible before making repairs or modernising lines and trains. If it was a nationalised business, people wouldn’t stand for it, and would demand better service, cheaper tickets, and a modern railway. The government couldn’t get away with it. And not all privatised industries are making a profit – I believe the government was recently asked to bail out a rail company.
Also, in some cases it isn’t a case of being able to make a profit or not – many of our previously nationalised industries were sold off to help the government raise some cash, whether they were profitable or not.
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