Tuesday, April 28, 2009

Hospitalisation and Lemon Socialism

The CAW and UAW as well as the US govt. are taking big stakes in GM and Chrysler. No doubt this will be seen by some as socialism or a victory for the goal of worker ownership of the means of production. Nothing could be further from the truth. The worker and state ownership stakes are in failing almost bankrupt producers and what we have is workers and taxpayers shouldering risk in order to save the auto industry for private capital in the future. As soon as things turn around and there are profits to be made the state and unions will divest themselves of their equity stake. Of course the state and union may recoup some of their investment and could possibly even make a profit but once profit is there the private sector and not the public or workers are to reap the rewards. Socialism on the other hand socialises both risks and benefits and would also produce on the basis of need rather than on the basis of profit.
Perhaps the term lemon socialism makes some sense but a better term would be hospitalisation where industry is taken into the public sector as part of a bailout and then when it is refinanced and back to a point of making a healthy profit it is then returned to the private sector.

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