On Sat, 2009-01-17 at 06:08 -0500, Ann Davis wrote: > I think a relevant, realistic discussion of the pros and cons of > nationalization would be extremely helpful.
Same call with some argumentations by Chris Dillow here: http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2009/01/arguing-about-bank-nationalization.html << Arguing about bank nationalization We’re edging towards nationalizing the banks. First, the government announces plans to insure loans to small businesses, saying that credit insurance markets fail in recession - which makes them as useful as umbrellas that don’t work when it’s raining. And now, it is thinking of buying banks’ bad assets, thus saying - what we know - that banks can’t trade their way out of trouble. All of which raises the question: if banks are failing so badly and need so much intervention, what is the point of keeping them in the private sector? There’s one thing government can do much better than the private sector, especially in recession - raise finance cheaply. This means nationalized banks, operating with government guarantees, could raise money cheaper in wholesale markets. And it means governments find it cheaper than the private sector to inject capital (shareholders funds) into banks. What, then, is the offsetting disadvantage of nationalized banks? One moronic argument is that it’ll politicize lending. It needn’t. Government supporters don’t get a better service from the passport agency, win more premium bond prizes or get easier driving tests. Such examples show that it’s trivially possible to design a hands-off structure for publicly-owned services. A less stupid answer is “worse management.” But this is not self-evident. [...] Interestingly, the most powerful opponent of market socialism, Hayek, did not think this the decisive argument against state ownership. He granted - perhaps only for the sake of argument - that socialist managers “will be as capable and as anxious to produce cheaply as the average capitalist entrepreneur.”* [...] Now, I’m not arguing here for nationalizing banks. I’m just making three points. 1. Can we discuss this without ideological blinkers? On the “left” there’s a tendency to regard the failures of markets or private ownership as inherent features of the system, whilst failures of government are mere accidents. The “right” makes the opposite error. [...] >> Laurent _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
