“The profitability of Croesus Company, recently restored to private ownership, is a clear indication that businesses fare better under private ownership than under public ownership.”
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Author concludes that businesses run successfully under private ownership rather than under public ownership. The line of reasoning is based on the information that profits of Croesus, which was recently restored to private ownership from public ownership earned more profits. The argument has several fallacies as stated below.
Firstly, author cites only one example for concluding that privately owned company do better than public owned company. A single example is too limited to make a conclusion about the businesses as a whole. Author should have cited several examples to prove his or her point that all the companies whose ownerships is transferred from public to private do better. It is possible that only Croesus might have done better while all other companies, whose ownership was transferred similar to Croesus', might have ended with loss. Without considering other companies' performance it would be improper to agree author's conclusion.
Secondly, author assumes that profits are the only consideration for any company to conclude that it is faring better. There are several other responsibilities for companies such as whether company is environmental friendly, are workers problems are understood well and treated fairly by the company, whether it is having a positive impact on society etc. Without mentioning these, weighing profits as the sole factor for judging a company's performance is incorrect.
Furthermore, author mention that Croesus was recently restored to private ownership, this means only a short a period was taken to conclude that private enterprises do well in comparison with public ownership. It is possible that initially private ownership might have laid off many employees so as to show higher profits in book etc. The comparison should have been done after taking at least a few years into consideration.
In order to make the argument better author should have studied the performances of several other companies which were similar to that of Croesus, the reasons behind transferring of ownership of Croesus, Croesus' performance in other areas other than profits. Also, author should have taken performance of the company for several years before arriving at conclusion. Statistical data should have been mentioned in the argument.
On the whole, argument has taken only a single company and a single factor, profits, into consideration. It doesn't provide any statistical evidence and appears to have come into a hasty conclusion that companies fare better under private ownership than under public ownership.
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Author concludes that businesses run successfully under private ownership rather than under public ownership. The line of reasoning is based on the information that profits of Croesus, which was recently restored to private ownership from public ownership earned more profits. The argument has several fallacies as stated below.
Firstly, author cites only one example for concluding that privately owned company do better than public owned company. A single example is too limited to make a conclusion about the businesses as a whole. Author should have cited several examples to prove his or her point that all the companies whose ownerships is transferred from public to private do better. It is possible that only Croesus might have done better while all other companies, whose ownership was transferred similar to Croesus', might have ended with loss. Without considering other companies' performance it would be improper to agree author's conclusion.
Secondly, author assumes that profits are the only consideration for any company to conclude that it is faring better. There are several other responsibilities for companies such as whether company is environmental friendly, are workers problems are understood well and treated fairly by the company, whether it is having a positive impact on society etc. Without mentioning these, weighing profits as the sole factor for judging a company's performance is incorrect.
Furthermore, author mention that Croesus was recently restored to private ownership, this means only a short a period was taken to conclude that private enterprises do well in comparison with public ownership. It is possible that initially private ownership might have laid off many employees so as to show higher profits in book etc. The comparison should have been done after taking at least a few years into consideration.
In order to make the argument better author should have studied the performances of several other companies which were similar to that of Croesus, the reasons behind transferring of ownership of Croesus, Croesus' performance in other areas other than profits. Also, author should have taken performance of the company for several years before arriving at conclusion. Statistical data should have been mentioned in the argument.
On the whole, argument has taken only a single company and a single factor, profits, into consideration. It doesn't provide any statistical evidence and appears to have come into a hasty conclusion that companies fare better under private ownership than under public ownership.
