What would be done with corporations in a socialist state?

Question

What about an independent system of cooperatives and publicly-owned companies backed the state, worker's associations and/or unions? Could companies be nationalized? (Not small-scale companies with a few dozen employees but large-scale companies)? Could they be placed in the hands of the community, workers, public associations or province/state instead of a national government?

Answer 1

I'm an anarchist, a libertarian socialist, not a state-socialist of any kind. So I'd keep nothing in the hands of the state, and have everything either community-run, foundation-run, union-run, consumer-group-run, or private.

Both the state and the corporation face similar calculational problems. The corporation can compare inputs and outputs but has to treat its internal processes as black boxes. The workers and low-level management have little interest in the performance of the company. The high-level management often inflates short-term profits at the expense of long-term profitability. Kevin Carson discusses this in his organizational theory project: http://mutualist.org/id114.html

Assuming that we can figure out the initial redistribution, confiscating unjust holdings while leaving just ones intact, we end up with several different ventures on different models. How do they interact? A free market? A modified market with charges for negative externalities and bonuses for positive ones? A system of subsidies? A system of bailouts to minimize shocks?

Subsidies tend to encourage overproduction and overuse of the goods in question. For example, the United States government has subsidized the car with its highway policies. This has crippled rail systems on every scale. Bailouts tend to encourage excessive risk-taking. Charges and bonuses still leave power in the hands of those handling the charges and bonuses.

Answer 2

There's an adage in economics that refers to the competitiveness of businesses in politically different countries.  It's called the race to the bottom.  Companies will locate where conditions are most favorable to them.  So if you start imposing too many restrictions on the way they can do business, they'll just leave and go somewhere else.  Then you won't have any left except those that can't go elsewhere.  Which is perhaps partly why they didn't bother with corporations in the Soviet Union.  Also why they're so successful in China, they can get away just about anything.

Answer 3

Socializing big industry doesn't work. The reason is that industry must remain nimble to compete. Do you think that a Public Association who runs a T-Shirt Factory would be able to layoff all their workers and move the factory to China to save on labor cost to better compete in a global market?  NOPE..

You know what they would do? They would call their Govt buddies and cry that cheap japanese cars are killing our Auto business, impose tariffs so we can continue to sell 8-mpg boats that breakdown within 2wks after to buy them from the dealer.  Yeah, that would be the story if such existed during the 1970s. Lucky it didn't and US Auto makers got a kick in the pants to compete and create quality products. And that ment laying off workers left and right. Something a socialized company who's interest lay in politics and not profits wouldn't do.