It's worth noting that partial privatisation isn't privatisation at all. Take a closer look at most so-called failures in this category and the half-assed situation generally becomes apparent. It'll be "private but one organization is given a government enforced monopoly" - or "private but price is fixed by government" - or "private but expansion is limited by government force". The list is endless.
Privatisation has been a costly failure in Britain
471–480 of 609 posts
Re: Privatisation has been a costly failure in Britain
#472Earlier quoted context omitted.
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.
I didn't delete anything, people flagged my reply
Re: Privatisation has been a costly failure in Britain
#473Earlier 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.
This is a pet peeve when market maximalists talk about how public services are "inefficient". Efficiency in economics refers to profitability. If a public service isn't profitable, that actually makes it efficient in a practical sense because a public service being profitable would mean it is overfunded (i.e. it's receiving more funding than it needs to operate). In practice this often means politicians will squawk a…
> This is a pet peeve when market maximalists talk about how public services are "inefficient". Efficiency in economics refers to profitability. If a public service isn't profitable, that actually makes it efficient in a practical sense because a public service being profitable would mean it is overfunded (i.e. it's receiving more funding than it needs to operate).
Ehhhh... nah. There is still a cost vs. return.
Postal Services, for example. $10 ships 1.1 packages on average, or they get efficient and $10 ships 1.9 packages, etc.
You absolutely see this in things like Medicare where $100 worth of spending doesn't get you 90-100 generic aspirin, but more like 20 pills, and the rest of it goes to pay middle men.
Re: Privatisation has been a costly failure in Britain
#474Earlier quoted context omitted.
Yeah exactly. In fact anyone who believes in markets should laugh in the face of private natural monopolies as an obviously terrible idea. The UK structures water provision as regional monopolies. This should be a hilarious joke but it's the reality. You can't change water company without living in a different region. There is no effective market competition for water provision in the UK. We already rely on price cap…
Doesn't it go into dividends for the owners?
Yeah to an extent, I admit that last statement was a little bit of a barb although I felt the topic of dividends was implied by the part about stocks etc.
Re: Privatisation has been a costly failure in Britain
#475Earlier quoted context omitted.
That would be actually a nice policy: only allow buybacks using taxed profits. Unfortunately, it's not there yet
Why would that be a good idea?
It would be a simple regulatory change that would (maybe ?) substantially mitigate the harm leveraged buy outs cause the economy and society.
Re: Privatisation has been a costly failure in Britain
#476Earlier quoted context omitted.
[flagged]
It doesn’t feel like they are trolling. They gave a legitimate response and you don’t like it. It’s a valid concern that I feel you should address.
Its a completely unproductive answer. Why do you assume a non-profit set up for a cause will predominantly exist to pay it's directors bonuses?
Lets deconstruct the three options on the table:
1) for-profit private -> exists to make money to their shareholders
2) government -> exists to (on paper) provide services to the people, but has a plethora of other reasons of existence (provide jobs for people, provide ego boosts for politicians working in the system)
3) non-profit private -> exists to provide a legal structure around an agreed cause
It is certainly possible someone establishes a non-profit to pocket the money for themselves, but it is a very clear violation of the purpose of the whole structure. In the other two, it is completely acceptable to bounce out of the cause of providing a service to the people, as there are other "goals" for the underlying system.
Whining about directors paying themselves bonuses a low-IQ bait to start flame wars.
Re: Privatisation has been a costly failure in Britain
#477Earlier quoted context omitted.
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…
Amtrak, a public rail company gets over a $1 billion in public funding. Private rail lines do not. Amtrak has operated at a loss for decades unlike private rails.
A "loss" here is just a politicized framing of the fact that government pays Amtrak to do something of use to society.
You might as well say that the US military makes a $1 trillion loss per year. No, they supply something which is required by the govt and which has a cost.
Re: Privatisation has been a costly failure in Britain
#478Earlier 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'…
It's only cheaper for the consumer when there is a forcing function for price. In a competitive marketplace - lets say breakfast cereal - if you're inefficient another manufacturer can undercut you while maintaining profit margins. There are ways around this of course through product differentiation, but something basic like cornflakes all hover around the same price point. All manufacturers are trying to improve eff…
I recently learned about electrical utilities in the US - the only way they really make profit is through building new infrastructure (power prices are set by a control board). There’s zero motivation for them to do maintenance, which is how we wound up with some of the devastating California wildfires a year or two ago.
When something is of public importance, like a utility, it really seems that running it as a public service instead of a private company seems like the right call
Re: Privatisation has been a costly failure in Britain
#479Earlier quoted context omitted.
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.
> it's a monopoly, it's not a free market, by definition It is a free market, you are free to open your own water company and build your own water pipes or deliver water in bottles. No one is stopping you
Actually, the very widely replicated experience of most challenger utilities is that the entrenched utility will stop you, sometimes in collusion with the government or municipalities. Try getting permits to dig up the road to put your competing pipes alongside the current monopolists.
In Britain, British Telecom spent around 20 years making it impossible for other players to supply an internet service to consumers. They used various anti-competitive practices and had very good capture of the largely toothless regulator OfCom. This is all documented.
Re: Privatisation has been a costly failure in Britain
#480Earlier quoted context omitted.
Ticket office staff won't help you there.
they literally tell yoy which stations are accessible and which ones arent.
"get off the train in a wheelchair"
Nothing to do with accessible stations, where they simply look up entries in a database and will have very little personal knowledge.