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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

#141

Post by mrfumier »

madaxe_again wrote: post #69
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…

Regulation. Regulation regulation regulation. I too believe that free markets are the solution to a great many of the conundrums of organising a society, but I also believe that a strong and socially conscious (by which I mean its prime directive is the enhancement and improvement of living conditions for all of those under its jurisdiction) regulatory hand is necessary. The U.K. has plenty of regulations, and toothl…

Exactly. Many people seems to mistake "free market" with "anarchy". Free market only works because there are anti-trust laws, anti-corruption laws, regulated lobbying. Otherwise, it is not a free market.

Re: Privatisation has been a costly failure in Britain

#142

Post by iso1631 »

jleask wrote: post #85
mrfumier wrote: post #62

Earlier quoted context omitted.

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

Cutting corners and costs e.g. shutting ticket offices, doing just enough to barely offer the service. It's not like your passengers have any sensible alternative. If that doesn't do it then you can also load the company up with debt and pay yourself a nice dividend until rates rise.

> shutting ticket offices

Why should I pay higher prices/taxes to keep ticket offices 90% of the country and increasing don't use open?

International Airlines finished moving to e-ticketing 15 years ago

Re: Privatisation has been a costly failure in Britain

#143

Post by pydry »

mrfumier wrote: post #110
pydry wrote: post #49

Earlier quoted context omitted.

This was obvious since the first wave of privatizations were kicked off in the 80s but somehow they still managed to build a cult around it. Now the investor cult is crumbling, but we're still supposed to acknowledge that there was a core of a good idea there and they just made a few mistakes and took it too far. That's absurdly generous. Even some of the supposed privatization successes really werent (e.g. British S…

I don't know in which country you live, but here in France, privatization and opening markets has been salutary. - The phone lines state monopoly was broken, it cut the cost by a factor of 10, and made possible high speed internet. - The packages delivery state monopoly was broken, which lead to a much more improved service, which delivery of fresh food or tracking minute by minute where your package is. - The intern…

Opening markets != privatization. There's absolutely nothing wrong with breaking a state monopoly if that's possible, but that's not privatization.

The free market cultists pretending that these two things that are very different are equivalent is half of how we got into this mess, in fact.

Whilst participants in the utilites market will often complain that it's "not fair" that they have to compete with a state actor, they're often the best way of exerting market discipline on them.

This is particularly true in utilities space where private actors unhindered by state competition try to bamboozle their customers into giving them fat profit margins with stupidly complex bills. State run companies that provide a bare bones low profit service that matches what most people actually want inhibit this kind of market abuse.

Re: Privatisation has been a costly failure in Britain

#144

Post by lostlogin »

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?

Sell off assets, get subsidies, understaff, rundown and don’t maintain equipment. Provide a shit service. When bankruptcy comes up you’ll be bailed out.

Re: Privatisation has been a costly failure in Britain

#145

Post by bell-cot »

refurb wrote: post #109
bell-cot wrote: post #36

Earlier quoted context omitted.

> I still don't understand... https://en.wikipedia.org/wiki/Thatcherism Or talk to a few older folks about Britain in the 1970's and 1980's.

The UK was going into the dumps before Thatcher even came along. That's why she was elected. I couldn't imagine how bad it would be if Labour hadn't been kicked out and the far-left economic approach hadn't been abandoned.

True-ish.

But "2 + 2 = 3 is false" is not an argument for "2 + 2 = 5 is true".

(FWIW - I've seen arguments, in a broad range of periodicals, to the effect that the current generation of British politicians - if not the entire British ruling class - are dysfunctional sh*t, and the UK's future looks pretty bleak.)

Re: Privatisation has been a costly failure in Britain

#146

Post by waihtis »

tnel77 wrote: post #3

When profit becomes the main motivator, quality of services always seem to drop. I get that the government can be annoying, but I feel like there are many services that we should aim to provide as a society where profit isn’t the goal. For example, you don’t need to price gouge people for electricity, but charging enough to cover expenses and future infrastructure upgrades is fine and to be expected. No costly CEO or…

So why not a private non-profit instead of government?

Re: Privatisation has been a costly failure in Britain

#147

Post by somsak2 »

pydry wrote: post #120
jack_riminton wrote: post #19

Earlier quoted context omitted.

Exactly. Fake competition in utilities and services makes no sense. The "privatisation" of the UK railways is a prime example. I use quotation marks because it's just privatising the profits and socialising the losses. "from March 2020 to February this year, the Government paid out more than £7.3 billion in operational support to private train operators" - https://bylinetimes.com/2021/05/18/7-billion-covid-bailout-f.…

Even in markets with competition, competition from the public sector is an excellent way of exerting market discipline on dysfunctional markets. If you compare the average quality of housing in, for example, Singapore (where 90% of housing is public) and the UK it's like night and day. UK private landlords are among the laziest and most entitled in the entire world, the land use efficiency is terrible and the buildin…

i always cringe when i see Singapore used as a comparison point with developed nations. it's a single city and has an authoritarian government. how is that at all an apples to apples comparison?

Re: Privatisation has been a costly failure in Britain

#148

Post by Findeton »

figmert wrote: post #140
dffdsa432 wrote: post #138

Earlier quoted context omitted.

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

Those in the unions are the public.

There are way more customers outside the unions that inside.

Re: Privatisation has been a costly failure in Britain

#149

Post by ricardo81 »

BT (British Telecom) is perhaps a good example of where a UK company could have succeeded (more), but this quasi-privatisation-yet-public-commodity thing has held them back.

The current market cap of the company is around a 1/3rd of the value of its pension scheme. Any takeover would be under intense scrutiny from the regulator.

Thankfully when it comes to water, in Scotland we did not privatise, nor is our water metered. We also continued to build onshore wind farms, unlike in England where it was effectively banned.

Re: Privatisation has been a costly failure in Britain

#150

Post by iso1631 »

andyjohnson0 wrote: post #111
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…

> Unfortunately, none of these apply to the privatization of inherently public commodities that run on top of an underlying network infrastructure. We tried this with the railways in the UK. In the mid 90s the tracks and signalling and most of the stations were transferred to a publicly owned and regulated company (Railtrack), while private businesses competed for franchises to offer train services. But within a few…

Other way round. Railtrack was a private company on the FTSE. It killed people. Network Rail then took the rail infrastructure back in house.
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