Socialism, American-Style

Mark Thoma comments on Socialism, American-Style, by Gar Alperovitz and Thomas M. Hanna, Commentary, NY Times.

Moreover, contrary to conventional opinion, studies of the comparative efficiency of modern public enterprise show rough equivalency to private firms in many cases. …

With skepticism about capitalism growing among minorities and young voters, will we see more such endeavors in the future? Pendulums have a way of swinging, sometimes very sharply, when big economic tsunamis hit. It is possible that in the next big crisis, both sides might see the wisdom and practical benefits of public ownership, and embrace Joseph Schumpeter’s point even more boldly than they do today.

I think this would benefit from separating natural monopolies — where it is not surprising in the least that costs/prices are lower with public ownership (or strict regulation of prices if privately owned) — from the other examples. When *significant* market failures justify it, I fully support public ownership. But in most cases I'd prefer private sector ownership with regulatory oversight.

Emphasis Mine

The propaganda machine of Capitalism would never publicly admit the inherent deficiencies of markets. However, failures are sometimes too great to cover over as in the case of the GFC.

Public ownership and regulatory oversight are tacit admissions that economic forces should be subject to the popular will not to private whims. Yet, these are still far from the actuality of worker-controlled and directed enterprises under Communism.