Abstract
Dr Pryke, in his opening remarks, offered a set of five hypotheses that he had inferred from his investigations:
-
(1)
Nationalised industries did relatively worse than private industries when the economy performed badly because (a) union resistance to the dismissal of workers was stronger than in private industry, (b) politicians did not want to create unemployment, because of short-term considerations, (c) there was a temptation for ad hoc intervention, and (d) price restraints upon public enterprises designed to reduce inflation led to losses.
-
(2)
Unconditional subsidies led to loss of control over costs and tended to escalate.
-
(3)
Nationalised industries should be expected to cover their own costs. Problems of inequality should be tackled by other means, such as taxation and redistribution.
-
(4)
New devices were needed to increase productivity in public enterprises — means such as productivity targets and five-yearly efficiency audits.
-
(5)
Monopolies should be avoided where possible. If a nationalised industry was in competition with private industry, the government could let it contract if it did not improve its efficiency.
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsEditor information
Editors and Affiliations
Copyright information
© 1980 International Economic Association
About this chapter
Cite this chapter
Baumol, W.J. (1980). Discussion of Dr Pryke’s Paper. In: Baumol, W.J. (eds) Public and Private Enterprise in a Mixed Economy. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-16394-6_24
Download citation
DOI: https://doi.org/10.1007/978-1-349-16394-6_24
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-16396-0
Online ISBN: 978-1-349-16394-6
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)