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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

#251

Post by gadders »

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.

I think people don't remember what services were like in those days - the weeks you'd wait for a phone installation etc.

Re: Privatisation has been a costly failure in Britain

#252

Post by kranke155 »

waihtis wrote: post #146
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?

The TFL works very well in london but I’m not sure about its structure

Re: Privatisation has been a costly failure in Britain

#253

Post by [deleted] »

brutusborn wrote: post #18
PartiallyTyped wrote: post #6

Earlier quoted context omitted.

Add education to that too. It should be pretty obvious to everyone that quality education is a matter of national security but here we are, with people proudly uneducated, who - in their wilful ignorance - harm others. Thank you to everyone who flagged me and now I can't respond or comment in this thread <3

I think education is actually case where the free market would solve a lot of issues. Making schools compete for students would incentivise schools to provide a more valuable education.

[deleted]

Re: Privatisation has been a costly failure in Britain

#254

Post by rrrhys »

iso1631 wrote: post #230
bambataa wrote: post #191

Earlier quoted context omitted.

Why should I pay to maintain a road I’m not using now, or a fire service I haven’t used yet?

Because ticket offices are a costly relic from the 20th century that simply are not needed, as evidenced by the collapsing usage of them.

Company: "Use the app" / cut back front line staff

People: "ugh, I will use the app"

Company: "Look, nobody uses the front line staff"

Re: Privatisation has been a costly failure in Britain

#255

Post by ilikerashers »

auggierose wrote: post #190
ilikerashers wrote: post #125

Earlier quoted context omitted.

Would love to see that happen but no government can stop that train now. Too much money is required and they can't just seize the assets.

> Too much money is required and they can't just seize the assets. But they can. That's why they are the government.

Are there any examples in modern economies? I know banks were temporarily nationalised but that wasn't a long-term plan.

Re: Privatisation has been a costly failure in Britain

#256

Post by mmkos »

Kiro wrote: post #164
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.

Isn't that the whole point of privatisation? By introducing a profit maximisation goal you (supposedly) create a more efficient operation. 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'…

Seems to me like an incentive issue. I can't see why it'd be impossible to recreate a good incentive structure for employees in the public sector so that they'd perform similarly.

Re: Privatisation has been a costly failure in Britain

#257

Post by kranke155 »

Lockyy wrote: post #14

Is this surprising? People have been crying out about the effects of privatisation for years. When basic services mandatory for modern human life like water, ISPs and energy are privatised you end up with funds that could end up going towards investment or towards funding other public services are instead funnelled out towards shareholders. The generational wealth the UK had in the form of North Sea oil passed off to…

Is Scotland benefitting from it somehow?

Truly astonishing that nothing like the Norway model was done. Those oil reserves could’ve transformed the country, surely?

Re: Privatisation has been a costly failure in Britain

#258

Post by refurb »

GrumpyNl wrote: post #232
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…

Free market has destroyed the affordability of healthcare.

Not really, it works really well for truly free markets like cosmetic surgery and vision correction.

The “free market” healthcare in the US isn’t free at all, there are a ton of regulations many of which make it worse, not better.

Re: Privatisation has been a costly failure in Britain

#259

Post by HWR_14 »

lotsofpulp wrote: post #202
m-i-l wrote: post #170

Earlier quoted context omitted.

> "It's even simpler than that ... their goal is to extract profits" 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 sh…

How are shareholder returns and profit different?

Profit is extracting money from customers.

Shareholder returns can come from profit, or selling off assets, or taking on loans, or underfunding pensions, or probably other ways financial experts can invent.

Re: Privatisation has been a costly failure in Britain

#260

Post by nip »

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.

Your reply is a cynical take on GP’s comment that was providing a clear, concrete and simple solution to the problem at hand that most countries, especially in EU, are facing.

Your comment on the incentives of private companies missed his point about the competition aspect.

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