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Re: public vs private



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this reply is also directed to other who responded to my earlier posting, so 
please don't assume i'm ignoring other replies- i look forward to your 
responses.

-charu

Raju Agarwal wrote:

 >  >charuX@lucent.com writes:
 >
 >  > >  The stated purpose of publicly owned instituitions
 >  > >  is not to generate profits but to serve public needs-
 >
 > In order to serve public needs on an ongoing basis, the institution must 
be
 > financially self sustaining.

OK, lets accept that- that ALL public insitutions should be
financially profitable. Lets see what an application of this principle
to some currently 'un-profitable' public instituitions would do:

example1: the military- to become profitable it could setup checkposts
and charge fees or 'protection money' [after all they're supposed to
protect us, right?] to any one that passes. border residents would
probably have to pay more- greater use you know. anyone who
refused to pay would have the option of leaving the country or
being blown up. btw- this utopian state of a self sustaining public
instituition has been achieved in many of the advanced-free-market
countries such as Sierra-Leone & Liberia and great progress towards
this ideal has been made in the drug producing regions of columbia
and the golden triangle. to a lesser extent in china the army runs
a vast empire of industry to be "financially self sustaining" but they
have a long way to go as they still consume public funding. among
the worst militaries in the world in this aspect is the US- they generate
no profit [OK, there are stray exceptions, such as the case of
US mercenary operations in kuwait a.k.a. 'desert storm'
paid for by regional clients]. in contrast to the backward
US military, the US-CIA is quite advanced- in the 60's and 70's they
were able to self-finance their terror campaigns in indochina by importing
illegal drugs, mostly heroin, into the US. this free-enterprise
operation allowed them to keep their activities free from the
'socialist' government meddling by US elected representatives.
the CIA later successfully repeated this model of self-sustaining-free-
enterprise-by-a-public-instituition in the 80's in central america,
and showing the admirable flexibility inherent in free enterprise
seamlessly switched operations from heroin to cocaine.

example2: the police [also see example1] india is relatively advanced
in this matter, particularly at lower levels where free enterprise
flourishes, though some less enlightened folk call this 'bribery' many a
policeman is able to turn a profit on his operations. more instituitional
process could be introduced to further reduce drain on tax money
by charging money for protection directly by going door to door
and extorting, oops! I mean 'collecting' fee for service!

- example3: prisons- actually china [and the former soviet union] were
shining examples in this area- chinese prisons cover a great deal of their
costs and even generate profits by the use of slave labor allowing
them to 'compete' by supplying cheap goods to global markets.

example4: orphanages- they could become profitable by making
the residents supply labor- this ideal was achieved in early industrial
age in england- sadly things have deteioriated since then thanks to
'socialist' reformers. though no labor [hence no profit] can be extracted
from infants, they could become new profit centers by auctioning them
off to childless couples wishing to adopt.
[also see: example3: prisons]

example5: hospitals- though great strides have been made in educating
people in the virtue of profiting from suffering and disease,
much could still be done. All free health services- representing a 'loss'
could be ended and replaced with cost based services. those unable to
pay could sell their blood or organs. the hospital could make good
profits by reseling the organs locally or could pioneer e-commerce
H2H [Hospital to Hospital- similar to B2B] exchanges possibly hooking
into a global market place. in cases where women could not pay for
maternity services the hospital could forfeit the babies delivered and
sell them at a profit [also see: example 4].

The possibilities are endless- i leave it as an exercise to the
advocates of the notion that ALL public instituitions be
"financially self sustaining" to explore further exciting possibilities.


 > The vast majority of public sector
 > undertakings (PSU's) such as the Airlines, steel companies, power 
utilities,
 > telephone companies, etc are financially unviable.  These companies are
 > plagued by mis-management (I am talking from first hand experience) and 
will
 > continue to drain the public exchequer as long as the status quo remains.

i think my the record of my past posts is clear that i'm not arguing for
a status quo by any means. i'm trying to establish a framework for
discussion and analysis free from doctrinaire oversimplification and
meaningless labels [such as 'socialism' or 'capitalism'] or the blind
worship of some or the other system because that system
trumpets the propaganda of its success.

As to your example of PSU's, my take is that their failures
have nothing to do with 'socialism' which is the bogey-man
that some here conveniently blame for everything. most PSU's
came into existence because the only [local] source of capital as large
as was needed to set them up then was the governement.
the management of these PSU's being organized as vast undemocratic
fuedal fiefdoms, their controllers acted as you would expect players
in such an organization to act- to maximize their personal gain
and power. the solution is to devise a system that does not allow
any one to accumulate and consolidate power.

I maintain that indian government and other power structures are
organised feudally rather than socialistically and simply beating up
the strawman people here call socialism while holding up capitalism
as some kind of divine ideal will not build a better society.

I'm arguing, unlike the pure free-marketeers of this group [IPI],
that some intituitions should be publicly owned and operated not for
private profit but for collective public benefit- the examples above
[in reverse, of course!] illustrate this. i can present others.

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