The main problem with state-ownership, or Marxism (named after Karl Marx) is the lack of incentives that comes from competition and individual choice. People making decisions and then seeing for themselves how they worked and didn’t work. When you have a central authority in charge of an economy, with the central government responsible for the management of the national business’s, those companies don’t have to succeed and produce in order to stay in business for those employees to keep their jobs. The state up to a certain point anyway, can simply just bailout the failing business’s and borrow the money up to a point to do that. When you don’t have competition, you don’t have to produce a good product to stay in business, because your customers have no other choices.
To get to why state-enterprise or state-ownership doesn’t work and why several different types of capitalist systems do work, is because with a state-enterprize economic system, you don’t have financial incentive to succeed. You are basically relying on people to be Saints and do good work and be productive for the good of society. And I’m sure there are Saints living on Earth and perhaps even I know a few of them, but there aren’t enough of them to make an economic system like that work and be functional. But that’s just one problem, but then you go to lack of competition, actually no competition if the state is the only game in town when it comes to airlines, or cars, or groceries, etc. They don’t have to produce good services, or products, because the people don’t have anywhere else to go.
Today’s debate in America and in most of the World is not whether we should have a capitalist economic system. But what type of capitalist system should we have. And Socialists even have their own version of capitalism which is common in Europe. Which is how even Socialists are now capitalists in America as well as around the World. As opposed to America which is more of a liberal democracy and individualist society, where there’s more incentive for the individual to succeed and make it on their own. Because again we’re not just allowed to set up our own enterprises and employ ourselves, but there isn’t a very generous safety net for us if we don’t. And Americans tend to like to be self-reliant anyway and not need government to take care of us. We’re proud of the values that Social Democrats in Europe and in America, tend to view as selfish.