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Privatisation has been a costly failure in Britain

economist.com

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Re: Privatisation has been a costly failure in Britain

#131

Post by roenxi »

Scenario 1 - Decisions are based on the opinion of Mathew Lawrence and, by proxy, the editors at the economist.com.

Scenario 2 - Decisions are made by people shouting at each other.

Scenario 3 - Decisions involve a big review of some successful energy grids in other countries and starting with one that works really well as a baseline.

A big shouting match to decide what a successful energy grid looks like is a good idea. But fixed infrastructure is long-lasting and hard to replace - it would make sense to make the decision rationally rather than making political guesses at what might or might not work.

Re: Privatisation has been a costly failure in Britain

#133

Post by BiteCode_dev »

mrfumier wrote: post #62
juujian wrote: post #25

Earlier quoted context omitted.

It's even simpler than that. All of these privatized entities are incredibly efficient... at extracting profits from the public. Of course their goal is to extract profits. And you don't extract profits from a rail line by offering the best service. Bonus points if you can convince the government to bail you out and provide some extra cash.

"And you don't extract profits from a rail line by offering the best service." So how do you extract profits then?

You milk the captive market.

Re: Privatisation has been a costly failure in Britain

#134

Post by ClumsyPilot »

debok wrote: post #52
vidarh wrote: post #24

Earlier quoted context omitted.

While I agree with you entirely, I'll propose an adjustment to the reason for this problem in the case of the UK: When the government is ideologically opposed to ensuring sufficient public oversight , quality of services drops. The problem in the UK is not merely privatisation, but privatisation in a way that privatises profits, often socialises losses, and that substitutes dealing with crises after the fact over str…

Weak oversight with nationalisation is even more disastrous. With a profit motive, the utility is at least incentivised to deliver the service so that they can get paid. If you have government-owned utlity with weak oversight, there is no incentive to even deliver the service. Look at what is happening with South Africa's power utility (and other State Owned Enterprises like their post office and national airline) as…

> With a profit motive, the utility is at least incentivised to deliver the service so that they can get paid.

No they are not! In Britain rail companies were bailed out during Covid.

Railways that had zero passengers reported profits and paid dividends!

> Look at what is happening with South Africa's power utility

South african society has various issues that are not applicable in UK/france/etc. Same goes for Russia. If suddenly French government does the kind fo shit Russian government does, half of Paris will be on fire before you can spell Baguette

Re: Privatisation has been a costly failure in Britain

#135

Post by pastacacioepepe »

avidphantasm wrote: post #75
wolframhempel wrote: post #9

I am a deep believer in free markets as the most efficient mechanism for distributing goods and services, creating better offerings and lower prices through competition and encapsulating risk in innovation. Unfortunately, none of these apply to the privatization of inherently public commodities that run on top of an underlying network infrastructure. This can be streets, railway tracks or water pipes - whenever there…

But what is the definition of a public good? Is it only to be limited to things that are natural monopolies/network systems (as you suggest) or should it also include practically non-excludable and non-rival goods (information)? I would argue we should go further. Some goods should be considered to be morally non-excludable goods. We should have the moral courage to assert that we cannot exclude health care to all pe…

> In the hands of such practitioners

I would call them cultists at this point.

Re: Privatisation has been a costly failure in Britain

#136

Post by gonzo41 »

I'll say the quiet part outloud. It doesn't work. Military, Health, Social Services, Justice, Power Generation, and Regualtion are all things that at their core function should be done by the state at a cost to taxpayers (in a progressive way). The private sector can make widgets and sell junk, as long as they can do it without harming people.

I know it seems simplistic, but generally the private market is full of corruption the poor can't really avoid. So they just end up victims to it.

Re: Privatisation has been a costly failure in Britain

#137

Post by iso1631 »

wolframhempel wrote: post #9

I am a deep believer in free markets as the most efficient mechanism for distributing goods and services, creating better offerings and lower prices through competition and encapsulating risk in innovation. Unfortunately, none of these apply to the privatization of inherently public commodities that run on top of an underlying network infrastructure. This can be streets, railway tracks or water pipes - whenever there…

Railway tracks aren't privitised and haven't been for 20 years. The trains running on them were - at least until covid broke everything

The problem is that the government let companies like Virgin off when they broke their contract, allowing them to bid high, take the profits, then walk away rather than fulfilling their contracted duties. Privatise the profits, socialise the losses.

Nethertheless there is tons of competition on transport in the UK

1) To get from Birmingham to London you can choose 3 different rail providers giving 3 different cost/value returns. Faster more frequent ones cost more.

2) On top of that you can also take a coach, hire a car, drive your own car, or of course not travel at all

3) Manchester to London you can fly, take the coach, drive (car hire or your own car), take three different trains ranging from £50 return and 3 hours to £180 return and 2 hours.

"Railway tracks" isn't where the competition is, transport is, and there's tons of competition. I remember I used to commute from a commuter town into Manchester. I could take the train during the peak, or I could take it off peak, or I could take the slower train from a different company, or I could drive, or I could take a commuter bus.

When it comes to the last mile of say BT, you used to have a monopoly, it would take months to get a replacement handset connected. Today though "a phone line" isn't what you want, internet is, and there are options

1) BT/Opeanreach connection (fibre or copper)

2) Non-BT fibre (in many cities)

3) Wireless ISPs

4) Satelite ISPs (Starlink/Oneweb or Geostationary)

Each has benefits and drawbacks

I would agree that the last mile of water and possibly electric provision shouldn't have been privitised. Treatment works though -- why not? There's no real limit on the number you can have.

When it comes to long distance electric again why not. There is a lot of money to be made transporting Electricity in Scotland and selling it to the south east. Let multiple companies do that.

The problem is planning permission and nimbyism means it's impossible to actually build new lines.

Re: Privatisation has been a costly failure in Britain

#138

Post by dffdsa432 »

juujian wrote: post #25
wolframhempel wrote: post #9

I am a deep believer in free markets as the most efficient mechanism for distributing goods and services, creating better offerings and lower prices through competition and encapsulating risk in innovation. Unfortunately, none of these apply to the privatization of inherently public commodities that run on top of an underlying network infrastructure. This can be streets, railway tracks or water pipes - whenever there…

It's even simpler than that. All of these privatized entities are incredibly efficient... at extracting profits from the public. Of course their goal is to extract profits. And you don't extract profits from a rail line by offering the best service. Bonus points if you can convince the government to bail you out and provide some extra cash.

Do government unions not try to maximize their profits from the public or am I missing something?

Re: Privatisation has been a costly failure in Britain

#139

Post by Machado117 »

fy20 wrote: post #47
wolframhempel wrote: post #9

I am a deep believer in free markets as the most efficient mechanism for distributing goods and services, creating better offerings and lower prices through competition and encapsulating risk in innovation. Unfortunately, none of these apply to the privatization of inherently public commodities that run on top of an underlying network infrastructure. This can be streets, railway tracks or water pipes - whenever there…

My country recently (2019) privatized the electricity supply. The infrastructure is owner and operated by a government entity, but the company you buy electricity from is a private entity, and you can choose which supplier you use. Generation was already privatized a long time ago. It was advertised as being able to offer lower prices to the consumer through competition, but all it has done is provided more ways for…

Same thing happened in my country. Fortunately someone decided to create a cooperative and now I can avoid contributing to the profit margin of some private company

Re: Privatisation has been a costly failure in Britain

#140

Post by figmert »

dffdsa432 wrote: post #138
juujian wrote: post #25

Earlier quoted context omitted.

It's even simpler than that. All of these privatized entities are incredibly efficient... at extracting profits from the public. Of course their goal is to extract profits. And you don't extract profits from a rail line by offering the best service. Bonus points if you can convince the government to bail you out and provide some extra cash.

Do government unions not try to maximize their profits from the public or am I missing something?

Those in the unions are the public.
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