History

Re: von Mises in Mexico

Wibee — Fri, 18 Mar 2011 00:02:52 GMT

Maybe he wanted mexico to fail. :)

Re: von Mises in Mexico

Daniel James Sanchez — Mon, 07 Mar 2011 17:05:30 GMT

Here is the source of confusion.

Ebeling has a different definition of "business-like" than Mises.

Ebeling characterized Mises' management proposal as "business-like" because, as he said, it involved "strict rules and procedures"

But, "strict rules and procedures" (or as Mises says in the quote I poste above, "detailed rules and regulations") is precisely what characterizes un-business-like management (bureaucratic management).

In recommending "strict rules and procedures" for a government enterprise, Mises was recommending bureaucratic management, which is perfectly in keeping with his writing.

Re: von Mises in Mexico

Daniel James Sanchez — Mon, 07 Mar 2011 16:57:18 GMT

"Bureaucratic conduct of affairs is conduct bound to comply with detailed rules and regulations fixed by the authority of a superior body. It is the only alternative to profit management. Profit management is inapplicable in the pursuit of affairs which have no cash value on the market and in the non-profit conduct of affairs which could also be operated on a profit basis. The former is the case of the administration of the social apparatus of coercion and compulsion; the latter is the case in the conduct of an institution on a non-profit basis, e.g., a school, a hospital, or a postal system. Whenever the operation of a system is not directed by the profit motive, it must be directed by bureaucratic rules."

And if you're familiar with Mises' writings of profit, you know it excludes the proceeds of any kind of government enterprise

Re: von Mises in Mexico

abskebabs — Mon, 07 Mar 2011 16:44:08 GMT

To be fair, he did recommend it as a second best option to privatisation, and the analogies he makes in Bureacracy don't quite fit to this example as you've pointed out above.

I've seen people point to the case of Singapore as an example of efficiently run, competitive but publicly owned firms. This might be worth looking into.

Re: von Mises in Mexico

Prateek Sanjay — Mon, 07 Mar 2011 16:33:58 GMT

And in a lengthy monograph that he wrote during the Second World War devoted to economic reform in an underdeveloped country like Mexico, he took as "given" that the politics of Mexican society was not ready to fully privatize, say, the national railway system or the oil industry. So as a "second best," Mises proposed transforming the railway system into a government-owned but privately managed corporation with strict rules and procedures to assure it was run in a relatively "business-like" manner with the least likelihood of political interference. He even supported limited and temporary subsidies to assist poor Mexican farmers to establish themselves as more-successful private enterprisers.

http://mises.org/daily/4189

He contradicted himself in actual work?

Well, let's look at it this way.

Public operations normally include police stations, fire stations, or lighthouse operators.

Industries typically include oil and railways.

To ask nationally owned oil companies or railway companies to behave like a business is not the same thing as asking a police station to behave like a business.

So in fact, he did not recommend a public operation to behave like a public operation. Furthermore, police (in whatever form, even as contractors) normally protect a single district - their benefit is non-exclusive and without the need for multiple highest bidders to make it exclusive. In that sense, they are publicly availed. A state-owned oil company is state-owned, but NOT PUBLIC. It buys services from other businesses and sells oil to other businesses, with exclusive benefits to the highest bidder.

Re: von Mises in Mexico

Daniel James Sanchez — Mon, 07 Mar 2011 15:47:35 GMT

That's bizzarre. Mises explicitly wrote that it made no sense to try to run public operations "like a business", and that for them, there is no better alternative than bureaucratic management.

von Mises in Mexico

Prateek Sanjay — Mon, 07 Mar 2011 15:18:44 GMT

In Richard Ebeling's The Other von Mises, we learn that von Mises advised the Mexican government.

He did not advise privatization of the Mexican railways.

Instead, he simply advocated that the Mexican railways be run in a more "businesslike" and relatively uninterfered form, while still leaving it in its government-controlled, government-funded form.

Were his proposals considered successful by him, his colleagues, or anybody who monitored the performance of Mexican railways after his suggestions?