In truth, China is a mixed system that combines capitalism and socialism—just like every other country in the world. This is equally true of the United States and European countries, all of which blend—in different proportions—capitalist and socialist elements in their economic systems.
We can count Australia in those nations which “blend”.
Obviously too small an economy to rate a mention by Forbes. In the recent history of China ‘Government Ownership’ (aka State Enterprise) was anything but success. There are numerous failed examples across the globe from both extremes of State and Privatised economies.
One lesson may be absolutes fail.
It’s a balancing act judged by how well each consumers needs are met.
Public institutions can be just as detrimental to the public good as private enterprise. Both respond to government remit - regulation and how public funds are applied.
Forbes and the author of that article are not unbiased onlookers. From the author bio:
…I have written and edited 22 books, the most recent of which are The Wealth Elite and The Power of Capitalism. My books on the psychology of success and wealth…
The author ignores the role of the state in most economies - whether the US New Deal, Japan’s MITI, and even the basics such as intellectual property rights. He ignores the ongoing role of the military-industrial complex in the technology sector, and the role of governments in creating industries and then ‘outsourcing’, killing or selling them (prison-industrial complex, CSIRO, Commonwealth Serum Laboratories, etc.).
I have heard Australia described as being more capitalistic than the US - which in some areas is probably true and is genuinely scary. Fortunately we still have Medicare and the MBS, but Australian governments in recent decades have turned their backs on the most needy in our society, and that still needs to be remedied if we can consider ourselves truly civilised.
Yes, there needs to be some mix of public and private ownership and control of resources - but since Reagan and Thatcher the pendulum has swung heavily in the wrong direction. Boris Johnson still ignores the mess Thatcher made in her attack on the unions, while the power of employees to protect their working conditions has continued to shrink under successive Australian governments.
A totally capitalist economy is self-destructive - just ask Ayn Rand (if you can put up with her inability to write a believable and compelling narrative). Totally state-run economies similarly fail, because governments just cannot be all things to all people and because power abhors a vacuum (i.e. you get the most crooked people running things).
This topic began as a discussion derived from Telstra and the NBN.
Taxation is a lever government uses but is ancillary to the topic. Those who wish to discuss tax policies may be better served by starting a topic on corporate taxation, noting corporate taxation is only indirectly a consumer issue but always a political issue, although it is pertinent to much of our life experience with anything even broadly ‘economic’ or ‘service’ orientated.
The focus of the offending part of the post in question (which has now been deleted in full) was reversing privatisation. That, I view as essential to this topic.
To a form of privatisation that is often outside the corporate sphere.
Housing is a basic human need. The private sector has failed to consistently provide.
In pre-Capitalist societies, no member of a community is homeless unless every member is. The tribe built shelter as necessary and everyone shared. Even in feudal societies, the Lord of the Manor provided. Has private ownership of housing increased homelessness? Is there something else that we’re doing wrong?
Privatisation that involves individual owners of assets will no doubt be more difficult to reverse than that involving corporate owners. Would nationalising housing be an improvement?
A High Court decision has opened up a discussion on the future of the States ability to levy taxes and other charges. It’s a decision that goes further than the resolution of whether the states can levy a road user charge on EV owners.
I am not sure what is sacrosanct about states being able to tax willy nilly on their own. More to the point, a single consistent a national tax structure and point of collection makes as much sense to me as would [the impossible to achieve] harmonisation of road rules across all states and territories.
The latter has been too hard, apparently, seemingly because each state and territory already has it perfect so none are wiling to budge. A disparity in tax revenue and spending could be a discussion about nation building rather than states rights or states building themselves?
Constitutional issues? Regardless of country I doubt the original document would remain nothing but fit for purpose a century later. While there are ways to change them, the processes are routinely demonstrated as being such high bars it comes under a ‘why try’ since the conclusions are so consistently ‘nae’ because of the high hurdles, politics of the days, and misinformation being so easy to propagate.
Some consider the latter protections for overzealous actions or reactions, and I accept that can be a reasonable view - that I do not agree with in the overall context of ‘moving on’ as a nation.
As acknowledged in the article, privatisation isn’t really relevant to the ability of states to raise funds - because the states have so little left to flog off.
The article may be unduly pessimistic because of the alternatives that it does not consider.
It does not touch on real estate taxes at all. It is possible that it envisages that real estate taxes will go the way of the EV charge.
It does not touch on payroll tax. Again, maybe the author thinks that it will also be found unconstitutional.
It does not examine whether the EV charge could be restructured so as to avoid problems with the constitution e.g. strictly a vehicle registration charge, independent of the number of km travelled. Maybe.
It does not examine the more radical option that states might take back income taxing powers. (Yes, @PhilT will hate that. )
I think the argument would go: the state only exists to the extent that it can tax and spend. So the thing that is sacrosanct is the state itself. It is possible to argue against the first part of that and suggest that a state could exist while providing no services and only existing for the purpose of making laws. However that could mean that all the laws are unforceable because there is no police force, no justice system and no jail - unless all that can be funded out of fines.
If only the Albo government hadn’t wasted its quota of one referendum.
The states created a rod for their own backs, when they gave up income tax during WWII. They have spent decades handing power to the Commonwealth (such as giving up on sales tax, to be replaced by GST), and the vertical fiscal imbalance has existed at least since 1942.
It actually makes more sense for there to be a central taxing entity; states have encountered problems when they applied different income tax and sales tax rates - making people choose whether to shop and work in Albury or Wodonga (to give just one example). Businesses that operate throughout the country have been able to shop for the best (i.e. cheapest) place to employ their staff (bearing in mind that they still need to be able to find decent staff, so moving them into some back-woods electorate does not really work too well).
The problem comes when states have the responsibility to spend (schools, roads, hospitals) and to regulate and enforce most criminal law (police) but the Commonwealth has the money. Of course, states could try to give responsibility to the Commonwealth for these as well, but then why bother having state governments?
(It makes a lot of sense for the Commonwealth to take responsibility for hospitals, as it already has responsibility for the rest of the health system.)
Yes, the states could reintroduce their own income taxes - that is not something that is prohibited by the Constitution (although they could lose all Commonwealth funding if they did it). But as soon as they did there would be one state taxing a bit lower to encourage employees to move to Queensland (I mean, that lower-taxing state - whichever it might be Queensland). The states have made their own revenue problems by choosing paths that seemed sensible at the time but have led to a loss of control over taxation.
Privatisation is a short term ‘solution’ that creates medium and long term costs, as we have seen over the last forty years. Governments have repeatedly had to step in to bail out the ‘totally self-reliant’ privatised entity/industry, and taxpayers have repeatedly paid - on top of losing the valuable asset that was flogged off in our name.
I mentally ask myself that regularly. The only answer I can reliably come up with is it would be a few hundred pollies out of jobs and payroll transfer for lots of public servants to Canberra.
It’d also have the effect of making it somewhat easier to pass a referendum, because Yes would no longer have to be the majority in the majority of states!
So … that in itself would probably prevent the state-abolition referendum from passing.
Well we have a system of Federation of colonies coming together into states and a Federal parliament and Government for the common good.
Warts and all.
I think it works mostly very well. As long as silly politics gets out of the way.
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