161–170 of 609 posts
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 co…
Power, Water, Road, Rail, and Healthcare should remain and have remained under public ownership - those are a public service and should not be run for profit. Telecoms is about the only one to have worked - ish, but it took decades and a lot of lobbying and regulation to make it happen.
The Economist, publishing an article (even just an opinion piece by a guest author) about privatisation being a failure? Wow...
It's a post-ideological era that we live in. Nobody cares about taxes, incomes and the like any more.[2] The conflict is now red vs blue.
[1]https://www.theguardian.com/commentisfree/2021/may/20/great-...
[2] Apart from the occasional oligarch who buys a newspaper because he really cares about his own taxes.
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.
I've worked in both the public and the private sector and can definitely understand the argument. In my government job it was way easier to slack off and no-one really cared about the results. There was no actual pressure from above to hit targets. You had your budget and it didn't really matter what you produced. Not hitting deadlines was no big deal.
Compared to my normal jobs where there is a constant stress from management to be lean, efficient and hit goals. I hate it but the team spirit is much higher and I probably produce 10x in comparison.
Earlier quoted context omitted.
Cut costs. And if youre in a monopoly position, you can in addition prices. I mean, do you really not understand how earnings are calculated, or are you trolling?
I don't understand. If it's a monopoly, it's not a free market, by definition. Seems like you are the one trolling here.
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…
The other side of that coin is, with quality as the main motivator, the prices go up. There's no free ride either way through organising things differently, its a choice between quality or price (as opposed to getting quality at a cheaper price). The other issue of course is in a public setting, there is no motive for efficiency.
In other words: You can set budgets and force your providers to do the best they can within them. No matter where you set them, people will be unhappy, but it's not like setting quality as the main motivator means you need to give the provider free reign to spend however much it wants.
PPP adjusted total UK healthcare spending is less than half of the US, despite a significant private sector acting as an outlet for a proportion of the situations when people are unhappy with the NHS. Incidentally US public money per capita going towards healthcare exceeds the per capita cost of the NHS (whether nominal or PPP adjusted). The low amounts flowing to private providers in the UK can be seen as a demonstration that most people considers the NHS service good enough - while many would not be able to afford going private, the proportion who could if it mattered is certainly far higher than the current takeup.
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 com…
Also comparing trains to cars and busses as a positive competition is missing the point that our roads are over capacity. Moving more people off of the roads onto the train networks should be a priority.
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?
By stripping and selling off as many assets as you can and borrowing as much as possible leveraged on the income from future fares. There is no incentive to spend this on long term investment or contingency planning. The railways are an essential service so the government will always have to step in when the private company reaches breaking point, so no money is saved by the state in the end. It’s just disguised debt…
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?
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.
According to the article, profit has not been the primary goal for the utilities though, because there is limited scope for extracting profits from uncompetitive essential utility services - the focus instead has been on maximising shareholder returns. So in the case of the water utilities, they "borrowed £53bn in debt while distributing £72bn to shareholders", which of course is what the issue is now interest rates have risen significantly. The article describes this as "the tension between generating strong returns for investors in uncompetitive monopoly conditions and providing high-quality, affordable infrastructure to the public". The end result is still the same though - transfer of wealth in a socially destructive direction.