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

Re: Privatisation has been a costly failure in Britain

#431

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

danparsonson wrote: post #242

Kiro wrote: post #164

Earlier quoted context omitted.

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'…

> Isn't that the whole point of privatisation? By introducing a profit maximisation goal you (supposedly) create a more efficient operation. Right, but efficient at what? The answer is almost invariably 'efficient at making money' - that's the whole point; competition normally forces alignment of incentives, wherein 'better' service (for some value of 'better') results in higher income. Thus a business that provides…

Quite a lot of the nationalised water and sewage systems elsewhere in Europe don't even seem to be managing the bare minimum though, it's just that without the privatisation angle the media doesn't care so they appear better. For example, Ireland tried to privatise their water industry a good while back in order to fund necessary investments and gave up due to protests - this was widely seen as a success that protected them from the disaster that hit the UK. Except that they've still completely failed to build basic sewage treatment in a bunch of urban areas that was meant to be built a long time ago according to EU rules, and which the privatised English water companies did manage to build. Plus they have the same problems that British water companies do on top of that. It's just that no privatisation means that there's no easy target to blame that fits people's existing beliefs about the world, so it's not front-page news and most people don't realise it's happening and happily believe their sewage is so much better handled than in stinky Britain.

Re: Privatisation has been a costly failure in Britain

#432

Post by kossTKR » Tue, Jul 11, 2023, 1:38 PM UTC

I just want to chime in and say that most "free market" ideologies have been engineered, spread and astroturfed by the robber baron classes to siphon as much money from the many to the few while distracting everyone with tension and circus - so much that this fact is hard to even find in the anglosphere.

It's an incredible feat of psychological engineering spanning over a century, and now people love to believe in the absolute fairy tales of rags to riches, ideologically instead of realpolitically or resource driven geopolitics and meritocracy instead of the realities of an ever increasing gini coefficient.

Re: Privatisation has been a costly failure in Britain

#433

Post by mnd999 » Tue, Jul 11, 2023, 1:38 PM UTC

kaashif wrote: post #388

mnd999 wrote: post #31

Earlier quoted context omitted.

It was, rail track was a private company. They had to roll that one back because trains kept crashing.

But is the most economically efficient number of deaths on trains really zero? If a million people get to work a few minutes faster every day for 40 years, is that worth one life? No, but I have actually heard this argument before and regard it as unhinged.

Fight club.

Re: Privatisation has been a costly failure in Britain

#434

Post by jmacd » Tue, Jul 11, 2023, 1:39 PM UTC

Canada privatized our railways in the 1990s. While it created a hugely profitable company for shareholders, it has been a pestilence on Canadian society since. Canadians do benefit from a somewhat more efficient freight network, but overall we've seen an unsafe, poorly maintained, but highly efficiently run rail network.

It is no longer possible for Canadian provinces or cities to make any effective use of infrastructure that we had built and maintained for over 100 years. My city had developed a plan for light rail, but required some access to CN tracking, and CN refused to even review a proposal. They also launched a major lawsuit against the city/town to try to get out of their commitment to maintain some safety infrastructure around their property. Their attitude seemed to be "we have deeper pockets than you".

In my own neighbourhood, there is a track that runs through a railway cut. A group came together and had built a beautiful multi use trail. They asked for an easement on a part of the CN right of way/property that was nowhere near the trackage and had been used as a path since time immemorial. What did CN do? Within weeks they erected a 6 foot fence around the entire property. They never even responded to the letters.

They freight business absolutely did benefit from private ownership. The workings of the capital markets have created an efficient machine.

The trackage they run on should never have been privatized. In return Canada will never have any decent passenger rail and no city pairing in Canada will ever be able to build a reliable or reasonably fast rail network.

Failure of privatization is in a lot of ways a failure of aptitude, or an exercise in grift. I'm not sure which exactly. It was either not well thought out, or very well thought out... depending on which side of the table you might have been sitting at.

Re: Privatisation has been a costly failure in Britain

#435

Post by a1o » Tue, Jul 11, 2023, 1:39 PM UTC

XorNot wrote: post #154

avidphantasm wrote: post #98

Earlier quoted context omitted.

> but all it has done is provided more ways for private companies to extract money from the general population. Then the system is operating as it was designed to. This is the coercive law of competition in action. And regulation won’t help in the end. Ultimately, without an overarching ideological project beyond capital accumulation, the motivation to accumulate wealth dissolves all social bonds that enforce trustwo…

"Laws are sometimes broken therefore why even bother having laws?" We don't make murder legal because it still happens, and the existence of corruption doesn't make regulation a bad idea - it means we need to clamp down on corruption. White collar crime has good PR representation, and that needs to stop.

I think both of you are correct, but what this implies is a different system - we would need to put resources into figuring it out how this system would work.

Re: Privatisation has been a costly failure in Britain

#436

Post by globular-toast » Tue, Jul 11, 2023, 1:40 PM UTC

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…

One definition could be that which is effectively required by citizens to exist and operate in a society. This would include utilities essential to life (water, heating, etc.), internet (given that the government essentially requires it for many things now), money (it's essentially required to have a bank account), healthcare, transport.

It's important to be realistic here and not fall back to technical truths. Yes, you could technically buy a house with physical cash. In practice, you need a bank account and to deal with the private banking system.

Another important factor for me is whether choice reasonably exists in the market. One of the great things about having a private sector is I can choose where to allocate my funds. I'm quite into music so naturally I have more instruments and sound equipment than most. But to afford this I must sacrifice other areas, like fishing. I don't own any fishing equipment because I'm not into fishing. This is great because it allows for a rich and diverse society.

But when the doctor says you need a £3000 procedure or else you will die, nobody chooses instead to allocate the funds elsewhere. There is no reasonable choice when it comes to healthcare. So it's wrong to treat it just like fishing.

Re: Privatisation has been a costly failure in Britain

#437

Post by Retric » Tue, Jul 11, 2023, 1:41 PM UTC

lotsofpulp wrote: post #409

BoiledCabbage wrote: post #397

Earlier quoted context omitted.

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…

I am not claiming it is a good thing for society. >The only thing they are competing against is which company can extract money the fastest (at the expense of the company and English citizens). Second of all, from the article, they aren't spending the raised money on capital investments. The owners of the company are competing with others in society to buy land/houses/cars/services/etc.

If the owners want cash they can do the same thing, take out a loan vs the value of the stock to buy more X. The advantage when a company does it is your liability stops at the value of the stock where leverage isn’t.

Except, not every investor wants every investment to be highly leveraged in this way. The entire point of utilities in most peoples portfolios is as very stable dividend stocks. It’s the people running the company who have incentives to do these kinds of transactions.

Re: Privatisation has been a costly failure in Britain

#438

Post by tsukikage » Tue, Jul 11, 2023, 1:41 PM UTC

danparsonson wrote: post #242

Kiro wrote: post #164

Earlier quoted context omitted.

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'…

> Isn't that the whole point of privatisation? By introducing a profit maximisation goal you (supposedly) create a more efficient operation. Right, but efficient at what? The answer is almost invariably 'efficient at making money' - that's the whole point; competition normally forces alignment of incentives, wherein 'better' service (for some value of 'better') results in higher income. Thus a business that provides…

> 'efficient at making money'

/extracting/. Efficient at /extracting/ money. This is the metric that is being rewarded, and therefore this is what gets optimised. You also see this pattern when an asset stripping firm buys an ordinary competitive free market company and runs it into the ground. To align this with /making/ money, just having a free market isn't enough - the controlling entity has to be in it for the long term, and has to bear responsibility for the downside of any decisions it makes. Otherwise it's just plunder and flee, just as with the usual kind of private equity firm corporate raid.

Re: Privatisation has been a costly failure in Britain

#439

Post by drsnow » Tue, Jul 11, 2023, 1:42 PM UTC

ModernMech wrote: post #343

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?

By making sure there’s no water fountains on the train platforms, yet plenty of kiosks and vending machines that sell water. I was just at EWR last night waiting for an arrival and there was an old man looking for water. He asks an employee where to find some and she looks at him like he has two heads. “You have to buy some. Or you can drink out of the faucet in the restroom” Can you imagine that? Telling an old man…

This is the way the world works now and anyone who disputes the justification of it just gets neatly added to the pile of "complaints" burned by elites for warmth.

Re: Privatisation has been a costly failure in Britain

#440

Post by PartiallyTyped » Tue, Jul 11, 2023, 1:42 PM UTC

scrlk wrote: post #297

PartiallyTyped wrote: post #225

Earlier quoted context omitted.

Could you elaborate? There are at least 2 interpretations of “over-educated” people being a threat to “the system”. Overeducated as in having university degrees and being “highly skilled” which demands imports of “unskilled” workers which causes integration problems. Or overeducated as in understanding how “the system” works and are aware of the class war they were thrown in since their conception, how the system pit…

The second interpretation of my comment is what I was attempting to allude to. I am reminded of this particular quote from Orwell's 1984: "Until they become conscious they will never rebel, and until after they have rebelled they cannot become conscious."

Sounds like Orwell was paraphrasing Plato. Funny, effectively the same issues 2500 years later...