privatization rush slows

michael perelman michael at ecst.csuchico.edu
Mon Nov 26 19:04:27 PST 2001


Max, we are not too far apart.

Amtrack could easily turn a profit. Operate it with no unions. Just keep the highly used corridors. ....

Max Sawicky wrote:
>


> A private firm that is bankrupt, or a public enterprise
> with assets that can't 'make a profit' -- in either case
> there could be transfers to capitalists that serve no
> purpose and simply dispossess the general public.

Right. what happens is that in its public guise, it gets an infusion of new investments ....


> The owners of the bankrupt firm could be compensated
> for nationalization of the firm in excess of the worth of its
> assets, or the assets of a public enterprise could be given
> away below cost.

Yes, both ways are common.


> Alternatively, we could imagine a firm that can't charge
> enough to cover its costs because its output is substantially
> non-market in nature, but whose output nevertheless is a
> great boon to humanity. You would call this firm a 'lemon'
> from the standpoint of profit-maximization, but properly
> speaking it should keep operating in the public sector.
> On the other hand, a public enterprise than runs a profit
> could be sold off (at the right price, natch) if the costs
> it could charge reflect the benefits of what it provides.
> There is no intrinsic problem with that, IMO.
>
> You could also imagine a firm that is subsidized by
> the state in excess of whatever benefits it provides
> to the public. That's the real lemon in lemon socialism.

The nuclear industry???
>
> I suspect there would be benefits to rebalancing the nation's
> transportation more in the direction of rail, less for air and auto,
> but I don't have any cites on this. One of the old men of URPE
> who is still kicking -- Elliott Sclar at Columbia -- writes about the
> merits of free urban public mass transit whenever somebody
> gives him a chance.
>
Sclar also wrote a nice book on privatization. --

Michael Perelman Economics Department California State University Chico, CA 95929

Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu



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