[lbo-talk] State run shit?

[Matthias Wasser]

Obviously this isn't universally true. IIRC South Korea had
state-owned steel mills that were the most efficient in the world, and
there's the case of the Soviet Union, which had state-owned everything
and outgrew the West until the mid-60s (although that's more a matter
of savings rates than firm efficiency.) Medicare is the most efficient
healthcare provider in the US. LBOers with a better grasp of history
than I can provide other examples.

One theory for why SOEs are less efficient than private firms on
average is that industries are often nationalized as a way of saving
them - imagine if the US auto industry were nationalized right now,
and you have the idea.

I don't think SOEs as currently practiced do represent what most on
the left think ideal - the idea of worker management is clearly in
there, and there is some evidence that worker management leads to
higher productivity - but the inefficiency of these firms is
problematic for us if we advocate nonmarket means of coordination and
can't provide good theoretical reasons for their overall (if hardly
universal) inefficiency.