this is richard wolff from democracy at
work
responding to another ask prof wolf
question
from our patreon community
and this question comes from a
management student
in italy by the name of federico
and federico asks a question many of you
have on occasion
sent to me federico is being told by
some of his professors
that state-owned and operated
enterprises
are somehow less efficient
or i believe the words his teacher used
have higher production costs
than privately owned and operated
enterprises let me comment on this in a
way that may
surprise you first of all
there are enormous difficulties
in measuring productivity that has been
true for a long time
and it means that when you hear sharp
strong statements that productivity
is higher there than here in that
country versus this country
in that kind of enterprise versus that
one
from this kind of worker versus that one
your first reaction
should be deeply skeptical
these measurements are difficult require
lots of decisions and judgment calls
along the way many of which are not
explained at all or not clearly
explained in footnotes
when the claims even make footnote
references
to whatever their sources are it is in
short
a murky field at the same time
it is an enormously active ideological
field the people who love and celebrate
private capitalism want desperately to
make arguments why state-owned
enterprises
are no good dysfunctional
fail aren't efficient whatever
and all of those arguments have been
made over
and over they are a staple of
4th of july speeches by private
corporate
ceos in the united states
on the other side in countries where
state-owned enterprises
were or are important and those include
not only the soviet union china
and all of that but in many capitalist
countries where the majority
of enterprises are private a very
sizable
portion of industry is state-owned and
operated
and it has its defenders and they
point out with their studies why their
state-owned enterprise is more efficient
etc
etc having said all that
here's my judgment based on work i have
done
looking at both kinds of enterprises
and the answer may be troubling to you
but it's what i found and the answer is
it's not very important whether the
enterprise is privately owned
or state-owned in other words there are
efficient examples
on both sides and there are inefficient
examples
on both sides and it's much more of a
mixed story
than the ideological combatants
would like to believe or would like us
to believe
here are some of the reasons suppose we
notice
that the production cost in a publicly
owned enterprise
is different let's make the assumption
it's higher than in a private
capitalist enterprise now let's see
why might that be well it may be that in
a state-owned enterprise
if it is subject to pressures from the
workers
may give them time off
may hire more of them than a private
enterprise
would feel required to do might let
people work a little more
slowly than in the private enterprise
now this will of course make for happier
workers
and that would make for better families
better communities
might be you'd have to measure that but
the productivity doesn't do that
it just looks narrowly at how many hours
of how many workers per ton of steel
or coal or machinery comes off the
assembly line
in other words what the very words
efficiency
mean have to be interrogated if you're
going to make any sense
of this my bottom line understanding
it's a fake issue in all
enterprises efforts are made for all
kinds of reasons
to economize to get more with less
effort
to get more with wasting less material
to get more with using more
less energy and so on human beings
in all enterprises seek to lighten their
load
to be more effective most systems both
private and state
reward enterprises that economize
on costs that's something you want to
encourage
you want to free people's time for
something else
etc etc and you have to look at the
whole complex
society to see the ways in which it does
or does not enhance
the efforts millions of people make
mostly
unknown to improve the efficiency
to flick the light off on the way out of
the of the
building at the end of the day to
economize on electricity
to fix a little machinery problem rather
than let it get
worse until the whole machine goes a
million little
things probably are more important
shaped in all the ways a society does
than these crude measures
that are used by the two sides
ideologically
to beat each other up much more
important for example
than whether an industry is state-owned
or private owned would be the question
are the workers the mass of people the
employees
the vast majority in every enterprise
are they given a sense that it's their
enterprise do they have a sense of
owning it
running it being responsible for it
having responsibilities
in it or are they looked upon as drones
do they feel as though they are
indispensable
or do they feel as though they are just
another worker
those questions end up having a bigger
impact on efficiency than the question
of whether the boss
is a state official or a private citizen
as you know we advocate for worker
co-ops
one of the reasons is that makes for a
much
more powerful and productive work
experience for each worker which we
believe translates into
greater efficiency and as i have
mentioned to you
uh professor virginia perrotana
who's a business school professor at the
business school of leeds
university in england who has done
systematic comparisons
on the efficiency of worker co-ops
versus hierarchical
capitalist enterprises a very careful
researcher
with all the footnotes explaining all
the
judgment calls she made her findings
which we use
systematically show greater efficiency
with worker co-ops than with
hierarchical
and the question of state versus private
drops out
this is richard wolff for democracy at
work