Governments have historically been incredibly conservative about what forms of business they support. To achieve the same innovation in new sectors like tech, the government would need to be much much more risky in who it gives loans to. They’d need to provide the utility of discerning good investments from bad ones that the public sector currently provides. And they’d need to be really good at it, since efficient allocation of capital is uber important to producing what needs to be produced.
There is absolutely no reason why private investors are better at discerning good investments from bad ones. In fact, empirical evidence shows that they’re objectively terrible at it. the other problem is of course that private investors invest in ventures with the primary purpose of creating profit with any other considerations being secondary. This means that many of these investments result in things that are harmful to society, but are profitable for investors. The opiod epidemic in US is a good example of this dynamic. Government investments are far more likely to result in ventures that produce positive social value.
The idea that private investment is necessary for innovation is also a fallacy. USSR pioneered a lot of technologies and it had no private business or investing. Likewise in the west, most fundamental research is done on public funding and then given away to companies to commercialize.
In fact, empirical evidence shows that they’re objectively terrible at it
That sounds like it’s taking about hedge funds and profile managers, not investors/bankers in general.
it gives some examples of hedge fund and profile managers, but the point it makes is very much a general one.
This means that many of these investments result in things that are harmful to society, but are profitable for investors.
That’s why you need to internalize the externalized costs with taxes and regulation.
USSR pioneered a lot of technologies and it had no private business or investing.
I should have clarified, the application of new technologies and innovations is better in free market systems. The USSR invented the cell phone for example, but it couldn’t be widely spread because the bureaucracy underestimated the benefit.
That’s why you need to internalize the externalized costs with taxes and regulation.
We have over a century of evidence that you can’t because the government fundamentally represents the interests of the class that holds power. In a capitalist society it’s the capital owning class because wealth directly translates into influence.
I should have clarified, the application of new technologies and innovations is better in free market systems. The USSR invented the cell phone for example, but it couldn’t be widely spread because the bureaucracy underestimated the benefit.
Markets aren’t in any way at odds with what I’m suggesting though. Markets are perfectly compatible with a socialist system.
