Stanley Dundee

Public Enterprise: Service to Fellows

2021-08-12 v. 1

Private enterprise does not lack for advocates. I'm here to speak up for public enterprise. Public enterprise acts in the service of fellows. Public enterprise is administered by stewards. Stewards and associates in public enterprise take responsibility for service to fellows. Stewards receive responsibility, attempt to improve performance, and eventually hand over the enterprise to successor stewards, having made it better. Providers of public enterprise take pride in their provision and they are recognized for their effort and achievement.

Public enterprise should be particularly directed to fundamental human services, especially those which I propose as sacrament. However even profane activities can qualify for public enterprise with community support and suitable personnel for operation. Worker-run cooperatives engaged in, e.g., manufacturing and construction, could be suitable for public enterprise if their products are relevant to the health and prosperity of a community. But fundamental human services should come first.

Because of the prevailing environment of monetized neoliberalism, public enterprise will be obliged to use money. They should charge for their services, and the charges should reflect the cost of production, including generous wages and capital investment. Profit is not a motivation. In public enterprise we should call it surplus. It should be regarded as a bit of an embarassment, especially if it's excessive. The surplus should generally be distributed or invested. Why not lower prices, increase wages, or invest in expansion of services? Public enterprise may but need not accept subsidies of public money which must be democratically allocated. Private philanthropy for public enterprise should be frowned upon.

Financial characteristics of public enterprise should be completely transparent. All financial reporting down to the level of journal and ledgers should be fully accessible to any curious member of the public. Pricing of services should be based on the cost of production. Wage levels should be public information. Wage levels should also respect community-derived minimum and maximum wage limits. Where public subsidies are provided, prices should reflect accordingly. So if a public enterprise is providing housing, the rents should be based on the costs of the provision less whatever subsidies are provided by the public sector. This makes an easy way for government to subsidize crucial living costs without having to directly provide services.

Regular public meetings should be required for public enterprise. These meetings should provide valuable feedback from users of the services and allow user's input to decision-making by the public enterprise. Public enterprises should also be subject to regular audits, in which financial statements are reviewed and approved. Public commentary by users of the services should also figure in audits. The auditors could host the public meetings at which the stewardship reports to the public, and the public can testify as to the performance of the enterprise.

Note that public enterprise may include state-run organizations, but ideally most public enterprise will be scaled to much smaller than national scale, and local authorities will be in close association with stewards of important public enterprises. Best case is non-government enterprises under the supervision of local stewards, with additional staff as appropriate. There are some compelling cases for national public enterprise as well. The Federal Reserve springs to mind. The Post Office. The Center for Disease Control. Best to have these outside the government under long-term independent control. Feds should mostly fund stuff and not operate it. Most government contracting should go to public enterprises.

We are used to working with non-profit organizations which are another form of public enterprise but one that's easily corrupted in an era of rampant inequality. Public enterprises which require public subsidies should have those subsidies allocated by elected officials in complete transparency. Private contributions, especially foundations, are fraught with conflict as long as class war persists. Non-profits are geared to tax avoidance and policy influence. Public enterprise should be geared to community coverage (serve everybody: care for all) and quality of service.

Public enterprise is closely related to the notion of democratic sovereignty in which money creation is gradually transferred from the private sector (mainly via banks lending against collateral) to the public sector, via democratically elected councils of investment. Investment councils would be the main sources of funding for public enterprise. That funding could encompass both capital and operational funding. Capital funding could include both equity investment and lending but equity investment should be preferred as it does not burden the enterprise with debt service. Equity investments by investment councils can be accompanied by appointments of directorship and requirements for audits.

Public enterprises would have the option of paying dividends on the equity investment where cash flow permits, with those dividends being recycled into investment and subsidy by the investment council. Public enterprises could also have the option of repaying equity investments to permit the original investment funds to be recycled as well. Decisions regarding dividends and equity repayment should be arrived at in consultation with the public and the council of investment.

This proposal should not be considered to be prohibiting the private sector from offering human services or other economic activities in a for-profit setting. However, given the rather egregious failures of human service in the modern USA, dependence on the private sector (and the government) to provide basic human services seems like a poor bet. By devolving the provision of services to a local level, community-specific considerations can be paramount, and a wide level of experimentation can be performed. Reliance on the private sector (including philanthropies) and the government has left wide gaps in the provision of fundamental human services. Public enterprise should aim to close those gaps and help to open a path away from the failures of capitalism.