Public ownership
22105
207412369
2008-04-22T18:16:11Z
86.150.57.206
it is possible for a gov to go bankrupt, so changed it
{{Mergefrom|Parastatal|date=September 2007}}
:''This article is about state ownership. For information on public corporations, see [[Corporation]].''
{{unreferenced|date=December 2007}}
'''Public ownership''' (also called '''government ownership''', '''state ownership''' or '''state property''') refers to [[government]] [[ownership]] of any [[asset]], [[industry]], or [[corporation]] at any level, [[national government|national]], [[regional government|regional]] or [[local government|local]] ([[municipal]]); or, it may refer to common (full-community) non-state ownership. The process of bringing an asset into public ownership is called [[nationalization]] or [[municipalization]].
A government owned corporation (sometimes [[state-owned enterprise]], SOE) may resemble a [[not-for-profit corporation]] as it may not be required to generate a profit. Governments may also use profitable entities they own to support the [[Government budget|general budget]]. SOE's may or may not be expected to operate in a broadly commercial manner and may or may not have [[monopoly|monopolies]] in their areas of activity. The creation of a government-owned corporation ([[corporatization]]) from other forms of government ownership may be a precursor to [[privatization]].
==Arguments for and against ==
''See also: arguments for and against [[privatization]] and the [[welfare state]]''
===For===
*'''[[Public services]]'''. According to the theory of [[public good]]s, some services, such as [[defense (military)|defence]], cannot be provided by the private sector directly - only a government system of [[taxation]] can finance them. Others (''[[merit good]]s''), such as [[education]], can be under-provided by the private sector (according to social standards concerning access to them).
*'''Essential services'''. Certain political theories (namely [[social justice]] theories) consider some services as essential (i.e. providing the service outweighs other concerns, especially commercial ones). A very common example here is [[health care]]. In the case of such essential services, [[nationalization]] may ensure their continuation regardless of commercial, environmental, or other external pressures. According to proponents of such theories, these concerns are surpassed by the positive [[externalities]] that are deemed likely to result from ensuring the service's availability to everyone.
*'''Efficiency'''. In [[natural monopoly|natural monopolies]], competition is wasteful, and will tend to be eliminated by competitive forces (leading to a private monopoly or [[oligopoly]]). A public sector [[monopoly]] can be held to account via democratically-elected governments, in a way in which a private monopoly cannot. (A private monopoly may be subject to [[regulation]], but this may be an inefficient way of securing the public interest.)
*'''Accountability'''. As mentioned above, while a governmental [[monopoly]] is nonetheless still a monopoly, it is answerable to the [[electorate]] rather than a small group of shareholders. (e.g. if the telephone service is nationalised, voters can bring pressure onto the government to provide better services, and parliament may have the power to sack anyone responsible for a reduction in the quality of service).
*'''Consumer interests'''. Public ownership can protect consumer interests in sectors where competition is low, where choices are important but made infrequently, and/or where consumers do not have the expertise to make good decisions (such as in [[health care]]).
*'''Common good'''. A profitable nationalised industry contributes with its profits directly to the common wealth of the whole country, rather than to the wealth of a subset of its population.
*'''Financial security'''. Public sector institutions have access to finance at government interest rates, which are (almost) always lower than even the most financially secure private sector firms, because the government is unlikely to go bankrupt, which means less [[risk]] to the lender.
*'''Work ethic'''. Employees may be more inclined to view their work positively if it is directed by a management appointed by a government that they have a say in electing, rather than a management representing a shareholding minority. Also, they may gain intrinisc satisfaction knowing their work is important and essential for society as a whole. There has been discussion of a ''public service ethos'' which makes public sector workers work harder than they would for a private employer.
*'''Equity'''. Public ownership can help prevent extreme imbalances of wealth.
===Against===
*'''Waste'''. Government ownership may lead to waste ([[x-inefficiency]]) if it proves unable to motivate [[management]] and [[personnel]] through appropriate [[incentives]], including appropriate [[pay]] and threat of [[redundancy (law)|redundancy]].
*'''Consumer choice'''. Public ownership in an industry which could be competitive in private hands may stifle innovation if proper incentives are not provided by the government. [[Consumer]] choice may be reduced and there may be no alternative sources - and no catalysts for alternative sources - of goods or services that better meet consumer preferences.
*'''Misinvestment/[[over-investing|over-investment]]'''. Public ownership of profitable services may lead to "[[gold-plating]]" (over-investment in assets) if decisions are driven by engineering ideals and not efficiency concerns.
*'''Unprofitable companies survive'''. Public ownership of a loss-making service or industry (such as [[influenza vaccine|flu vaccines]]) may inhibit the changes needed to ensure long-term profitability (or permit bankruptcy). This may mean subsidising unnecessary losses indefinitely.
*'''Misallocations of labor and money'''. The government may be inefficient in running production, trading, or service operations, in the sense of causing misallocations of [[Labour (economics)|labor]] and [[Capital (economics)|capital]], with consequent reductions in the standard of living and economic growth.
*'''Accountability'''. Accountability to the market may be eliminated, and accountability through government may be an insufficient replacement, particularly if an industry or service does not have a high public profile or if the government is not democratic.
*'''Influenced by [[politics]]'''. Decision-making in the public sector may be prone to interference from politicians for political or [[Populism|populist]] reasons. The industry may be over-staffed in order to reduce [[unemployment]]; it may be forced to conduct transactions or actions in certain areas in order to win local votes; it may be forced to manipulate its prices in order to control [[inflation]]. Of course, some of these measures may be considered positive rather than negative, but if they are not taken properly, in the long run they are likely to be an inefficient way to meet the desired goals.
*'''Source of Income''' Sometimes governments are accused for overcharging for products where they hold a monopoly, thus utilising them as an additional source of income, or hidden tax.
==See also==
*General
**[[Government]] - [[Ownership]]
**[[Ownership]]
*Government ownership / funding
** [[State-owned enterprise]] - [[Public sector]] - [[Public services]] - [[Public good]] - [[Sovkhoz]] - [[Non-governmental organization]] - [[Government debt]] - [[Government finance]]
*Private ownership
** [[Private ownership]] - [[Ownership society]] - [[Public company]] - [[Private sector]] - [[Social sector]] - [[Stock exchange]] - [[Stock market]] - [[Consumer debt]] - [[Voluntary sector]] - [[Co-operative]] - [[Volkseigener Betrieb]]
*Change of ownership
** [[Privatization]] - [[Nationalization]] - [[Municipalization]] - [[Newt Gingrich]] (see "welfare reform")
*Regulation
** [[Regulation]] - [[Deregulation]] - [[Liberalization]]
[[Category:Political economy]]
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