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Well, apart from anything else the private competition --> wealth thing is an assumption, and nothing more. It has a certain kind of logic behind it, but it's not the only logic possible to employ, and it turns out that it's wrong.
As per Haus, I'm not an economist - just a politics student - but how about we try an alternative model. How could a more centrally planned economy, for example, be better at generating wealth? Well, for a start, it's possible to take a more holistic model to the economy. Even if one assumes that the actors in a private enterprise system are entirely rational beings - which they're not, no-one is - what's in the interests of the heads of a company is not necessarily in the interests of the economy.
To pick an example off the top of my head, do you know of the practice of Starbucks and a few other companies to saturate and then leave the market? Basically, they'll move into an area and open more stores than is necessary, wait around until all the local coffee shops have been bankrupted by their presence and had to close, and then close those of their own stores which are superfluous. I'm sure that's good for the bank balance at Starbucks, but it seems a bit wasteful to me overall.
Or again, it's often good financial sense for a company to keep the wages of its workers as low as its possible without losing too many of them to competition. Is it good for the economy overall? It might be worth the tradeoff for an individual company if a few people leave their jobs but they're able to keep rubbish working conditions and low pay, but I'm not sure it wouldn't help wealth creation overall if those people weren't just paid more but stayed put.
And then there's your basic public services - things like health and education. I assume, as you seem to suggest, that you can see where getting private enterprises in here could really mess things up; basically, a health insurance company, for example, is only likely to pay for healthcare if it makes good financial sense to do so. If the balance of cost against reputation isn't worth it (which includes, incidentally, things like whether the would-be patient is in a position where they'd be able to kick up enough of a fuss to actually damage their reputation), the insurance company won't pay out.
I think the effects of things like this on the economy should be clear; if a workforce is unable to get the healthcare it needs, or receives a poorer education because that's what it's cheaper to provide, it's pretty obvious that's going to have a knock-on effect on productivity. However, I'm not really convinced that there's a clear dividing line between "public services", such as health and education, and everything else. Let's go back to fast food outlets. Ronald McDonald don't give a ****, unless it's going to land him with a lawsuit, if all the people pouring in and out of his stores are going to go on and have heart attacks as a result of doing so - if he can cut costs or sell a few more burgers by replacing some part of them with a big globule of saturated fat, he'll do so. However, the health of the nation, and therefore of the economy, isn't going to be so indifferent.
Moreover, in a capitalist system you've potentially got a lot of people who are superfluous. Take private healthcare again: as I've said before, the US spends *more* on healthcare per capita than anywhere else in the world, but overall gets atrocious results. Where's all that extra money going? Well, you've got a lot of people handling insurance, who should get healthcare and who shouldn't, doctors wasting their time on the phone to insurance companies begging them to accept that their patient needs an operation right now, and so forth. That's a lot of time and energy wasted that wouldn't be in a publicly provided system. And then again, you have people who make their whole living playing with the stock market, moving money from here to there. Are they being productive? Not at all.
... And then, finally, there's plenty of evidence to suggest that, simply, poverty produces ill-health. Not just absolute poverty, but relative poverty. Essentially, greater inequality in a society leads to worse overall public health, full stop. Oh, and the old argument from Marx about alienation from one's labour, whereby someone who is not alienated from their labour and is able to connect to its real-life positive effects will be fitter, happier, more productive.
I think that's a decent few reasons why a more socialist system might help the economy overall? |
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