Privatisation has been a costly failure in Britain • Hacker News Board

Re: Privatisation has been a costly failure in Britain

#421

Post by kibwen » Tue, Jul 11, 2023, 1:33 PM UTC

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 entirely cromulent to believe in the usefulness of markets while also acknowledging that certain contexts cause markets to be inefficient, and thus reduce their utility, possibly to the point of utter uselessness.

Natural monopoly? The market is inefficient.

Inelastic demand? The market is inefficient.

Negative externalities? The market is inefficient.

Markets are just a means, not an end. We should apply them judiciously, not religiously.

Re: Privatisation has been a costly failure in Britain

#422

Post by thanatropism » Tue, Jul 11, 2023, 1:35 PM UTC

I was a big proponent of privatization in my South American country and I'm reversing some of that position. But I still don't regret or recant the underlying theories that made me a proponent in first place. People are going all Ken Loach on this like this has been obvious all the time, but it wasn't; privatization arose as an approach to paralyzing problems (here, a phone number was an asset, like a car; you could rent it and there was an income tax law for that) and there's no outstanding alternative approach to address them.

More broadly and less strongly, the same is true of globalization. The fact that these haven't lived up to promise means we are frakked. The witch was right, there is no alternative.

Re: Privatisation has been a costly failure in Britain

#423

Post by tnel77 » Tue, Jul 11, 2023, 1:35 PM UTC

HWR_14 wrote: post #274

waihtis wrote: post #264

Earlier quoted context omitted.

any government system is too likely to be corrupted by politicians in relatively short timeframe

As opposed to the unaccountable board of a non-profit raking in significant income? Where they can pay themselves a nice bonus if they make more money for the non-profit?

They deleted their comment about you being a troll for this response, but I agree with you. I’d like to know what their response is.

Re: Privatisation has been a costly failure in Britain

#424

Post by schnable » Tue, Jul 11, 2023, 1:35 PM UTC

Should be noted that this isn't an editorial from The Economist but an opinion piece from a contributor that was run side by side with a counterpoint: https://www.economist.com/by-invitation/2023/07/06/thames-wa...

Re: Privatisation has been a costly failure in Britain

#425

Post by edgyquant » Tue, Jul 11, 2023, 1:36 PM UTC

m-i-l wrote: post #170

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.

> "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 is that now extracting profit for the shareholders exactly?

Re: Privatisation has been a costly failure in Britain

#426

Post by VBprogrammer » Tue, Jul 11, 2023, 1:36 PM UTC

gnfargbl wrote: post #158

fy20 wrote: post #47

Earlier quoted context omitted.

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…

In the UK, we have a similar system, and for a decent time it actually did deliver low energy prices for us. The way this worked was that a new energy provider could easily set up and offer low tariffs, backed by private investment and a gamble that long-term prices would stay low. Of course, when prices rose, that gamble failed... and who picked up the bill? Why, the taxpayer, of course! [1] The overall effect of th…

> Or to put it another way, the rich were subsidised by the poor.

I agree with most of what you've said but I don't agree that this conclusion follows. If anything when I was less well off I was far more inclined to put up with the hassle of changing providers every few months to minimise the costs than I am now.

I do think there were some efficiencies generated, it's just hard to figure out if a nationalised entity would have gotten there eventually. The online only account management for example probably saves a bunch over call centre staff and sending people around to read the meter.

Re: Privatisation has been a costly failure in Britain

#427

Post by lhnz » Tue, Jul 11, 2023, 1:36 PM UTC

fnikacevic wrote: post #366

lhnz wrote: post #177

The UK is increasingly resembling the rest of the world's rentpig. The UK government has made Britain into one massive investment vehicle for foreign capital -- our utilities, leading firms, football teams, landmarks and property all serve to enrich sovereign wealth funds in the Middle East and Asia. These foreign investors have all received lavish incentives and grants, and in return we have been allowed to live way…

It's voluntary colonization.* * The volunteers being a limited group of decision makers.

It's true but also older people are addicted to destroying the economy here, constantly demanding decisions that impair the ability of the country to build houses, build businesses, build new infrastructure, etc, all while expecting high living standards. The only way it could be financed was by selling off the country's wealth.

Re: Privatisation has been a costly failure in Britain

#428

Post by efields » Tue, Jul 11, 2023, 1:36 PM UTC

Just browsing the comments on this one, it struck me how users of this website, an incubator for new technologies and ostensibly private businesses, seems to not believe in the capacity of private businesses to provide the most socially-useful goods and services.

My basic woke laymen POV is that the in last 150+/- years, we figured out 100% of how to sustain humanity at scale and even offer some perks like efficiently traveling huge distances. Greed/nationalism/willpower get in the way from time to time, mucking up the works, but creating opportunity for well-timed industrialists on borrowed wealth to come in and provide "solutions."

This is all viewed through glorious, rose-tinted hindsight, but what even are we doing here?

Re: Privatisation has been a costly failure in Britain

#429

Post by lettergram » Tue, Jul 11, 2023, 1:36 PM UTC

BoiledCabbage wrote: post #397

lotsofpulp wrote: post #295

Earlier quoted context omitted.

That is inevitable with super low interest rates for a super long time, especially near zero. Your options are to acquire appreciating assets quicker than your competitor, or you get left behind. See people who bought homes at 5% down versus people who waited to have 20% down. The people who took on more debt were rewarded nicely with huge gains, and the people, who were prudent, now decide on paying a few hundred th…

This is a very naive reading of the situation - it almost comes across as twisting in knots to avoid placing the blame on the responsible party: the company and its owners who were responsible for this. > Your options are to acquire appreciating assets quicker than your competitor, or you get left behind. This is wrong twice over! First of all, they are effectively monopolies, they have no competitors in their indust…

Utility companies in Illinois are private & can only charge X% (10% for electrical) more than they invest. Frankly, the power & rail network here are amazing, in large part because that system incentivizes maximum reinvestment as they can then charge more money and return larger amounts to share holders.

Competitors who take large loans and fail to deliver are out competed by alternatives who went a more efficient route.

The profit margins are fixed, but everything is still competitive.

Re: Privatisation has been a costly failure in Britain

#430

Post by giraffe_lady » Tue, Jul 11, 2023, 1:37 PM UTC

JumpCrisscross wrote: post #159

figmert wrote: post #140

Earlier quoted context omitted.

Those in the unions are the public.

> Those in the unions are the public This is a nonsense delineation in systems thinking. That railroad shareholders are also the public doesn't justify ripping them off. Unions are beholden to the same impulses towards monopoly and rent-seeking as corporations. Swap members ( i.e. sellers of labour) for shareholders ( i.e. sellers of capital) and employers ( i.e. buyers of labour) for customers ( i.e. buyers of goods…

"If you change every detail of both things they're the same thing!"

Labor and capital aren't the same concept no matter how much you scramble them. One is powerful enough that the entire system is named after it.