Much discussion has arisen over the relative efficiency of the management of industries conducted by individuals compared with the management of those conducted by the state. Some countries have extended their activities in these directions much more rapidly and extensively than have others. The governments of the United States and its political divisions have proceeded slowly in taking up these operations, yet there is at present much agitation for government ownership and operation. It is too much to expect that a government could successfully manage every kind of industry, yet some may be carried on to better advantage than others. No rule can be definitely stated which would mark off the field for state enterprise, yet it may be possible to suggest some conditions which favor the success of state activity in industry.
Conditions Favorable to State Management. - An industry suitable for state management must be one which can be closely watched by the public. It is necessarily carried on by public officials, with the temptation always before them of securing benefits to themselves at the expense of the public. Not only must it be an industry which can be closely observed, but it must be one in which the public is interested. The managing officials, otherwise, will not be held responsible for the method in which the business is conducted. An industry which has reached, or nearly reached, its final stage in development is better fitted for government management than a new industry in which much progress is needed to make it efficient. State officials do not have the same motives for progress and efficiency as individual entrepreneurs, since the returns of the business are the rewards to the latter, while the former receive a salary for their services. A mature industry has the further advantage that the necessary operations have been standardized so that it is comparatively easy to assign definite tasks for which the employees can be held responsible. In a new and progressive industry, the entire method of operation may change every few years, while different aspects are continually in the process of change. This makes it difficult to secure men to be held accountable for particular tasks. While many individual exceptions doubtless exist, as a general proposition, however, the government will be more successful in managing a mature industry than one in the formative stage.