Juanny Boy: Robert – I have a question about this.
What’s the benefit of Centrally planning industries that are largely not predatory like clothing, computers, etc.?
It seems they are produced less efficiently under Marxism.
But in industries like health care, water, it is a necessity because of the potential for abuse.
I am not a fan of central planning.
However, the Chinese model works very well. 45% of the Chinese economy is publicly owned.
- Force public enterprises to compete internationally. Sink or swim. The #2 leading producer of TV’s in the world is a state-owned company in China that is officially owned by its workers.
- Chinese public firms compete with each other. So a steel factory in City A would compete with a steel industry in City B.
- Chinese public firms are run to make a profit. The profits from public firms simply go back to the various levels of the state and these profits are distributed to the people in a variety of ways. That’s a really cool use of company profits!
- Many Chinese public firms are run at a low level such as the municipality level. In other words, many of the firms are run by small cities. The cities compete with each other. Workers own all the companies so as the company makes more money their paychecks go up. Also as the firm does better, the city invests more and more money in the city to make it a more attractive place for workers. For instance, they fix up the workers’ housing and make it a lot nicer. Hence you get a lot of workers coming from all over trying to get jobs in these booming city industries in part because the living conditions are so good.
- I understand that once an industry becomes a certain size, the Chinese government simply obtains ownership in the firm. Now how they do this, I have no idea whether they buy in or what. Maybe they own 51%. But I believe they then take a hands off approach and let you run your company any way you want. But I suppose they may want 51% of the profits. I am not sure how it works.
