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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

#51

Post by sschueller »

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…

Business always strives to optimize but while I stand here waiting for the bus I have to witness 5 different package carries battle it out on the tiny road where I live.

Can't get more inefficient than that. What's next? Privatization of trash?

I have actually seen this with recyclable trash, several companies with different colored trash bags that pick up on different days littering the street. I'm glad some towns have already banned this. Worst part is that they let people mix all recyclables in one bag and then sort at the facilities adding another huge inifficiency. This is a huge eyesore in Switzerland where people will give you the "stare" if you through shit in the wrong bin.

Re: Privatisation has been a costly failure in Britain

#52

Post by debok »

vidarh wrote: post #24
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…

While I agree with you entirely, I'll propose an adjustment to the reason for this problem in the case of the UK: When the government is ideologically opposed to ensuring sufficient public oversight , quality of services drops. The problem in the UK is not merely privatisation, but privatisation in a way that privatises profits, often socialises losses, and that substitutes dealing with crises after the fact over str…

Weak oversight with nationalisation is even more disastrous. With a profit motive, the utility is at least incentivised to deliver the service so that they can get paid. If you have government-owned utlity with weak oversight, there is no incentive to even deliver the service.

Look at what is happening with South Africa's power utility (and other State Owned Enterprises like their post office and national airline) as a great example of what happens to a public enterprise with no oversight.

Re: Privatisation has been a costly failure in Britain

#53

Post by jacquesm »

I love the free market. But when it comes to education, health care, public transport, utilities, law enforcement + associated services I've yet to see even a single example of where the free market made things better for the public. As a rule after privatization prices go up, the service level drops and people suffer as a consequence whilst being given a fake increase in choice.

This is one of the big failures of the last 30 years and can't wait to see it rolled back.

Re: Privatisation has been a costly failure in Britain

#54

Post by mnd999 »

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…

Thames water has to be allowed to go bust, and the shareholders need to lose their shirts, because that’s what has to happen when a company is so badly run. Otherwise the abuse will continue.

However, I would like to keep my water supply so somebody has to sort this situation out quickly.

Re: Privatisation has been a costly failure in Britain

#55

Post by rini17 »

perlgeek wrote: post #35
narven wrote: post #16

There's been only a couple of "privatisations" in entire world, that actually resulted in some benefits. Privatisation means, "you that don't give a fc... take care of that problem for me"

From my user's perspective, it seems that privatization of Germany's phone and Internet market has worked pretty well, and lowered prices all around. Though I don't know if that was because there was a huge boom of Internet access around that time, and telephony prices would have dropped anyway, or if that was one of the examples where it did work, inherently.

Because your telecom regulator has teeth and there's competition? When German T-Com bought Slovak Telecom monopoly they continued just like that. Forced old ISDN tech on everyone for high prices (probably to clear out stockpiles) and suppressed DSL for a few years, till some last mile access for competition was required by law.

BTW was in Germany myself many times and it's surprising how bad coverage there's outside city centers.

Re: Privatisation has been a costly failure in Britain

#57

Post by jacquesm »

sschueller wrote: post #51
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…

Business always strives to optimize but while I stand here waiting for the bus I have to witness 5 different package carries battle it out on the tiny road where I live. Can't get more inefficient than that. What's next? Privatization of trash? I have actually seen this with recyclable trash, several companies with different colored trash bags that pick up on different days littering the street. I'm glad some towns h…

Privatization of trash collection is already a thing in many places.

Re: Privatisation has been a costly failure in Britain

#58

Post by jacquesm »

Vaslo wrote: post #41
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…

ISPs are not mandatory for human life.

No, but internet access is a requirement for many mandatory interactions with the government and various service providers so even if you can breathe without internet access you're going to be doing so from a cardboard box. Unless you want to lead a normal life you are not able to live without internet access in many developed countries. Bit by bit all alternative pathways to interact with parties that you have to interact with are phased out.

Re: Privatisation has been a costly failure in Britain

#59

Post by kome »

You need competition to create a market. You cannot have competition on a natural monopoly. You can create the simulacrum of a market (that was the EU and UK approach), but you cannot create a real market.

It's better to keep water, streets and telecommunications public. Privatizing them is a waste of resources.

Re: Privatisation has been a costly failure in Britain

#60

Post by emptyfile »

cmrdporcupine wrote: post #34
pharmakom wrote: post #17

Choice is a necessary condition for free markets. There is little to no choice in water, roads, phone lines, rail transport, etc. I still don't understand why the UK went down this path.

Almost the entire western world did, starting in the early 90s, and those of us who tried to stop it at the time were derided as clueless naive economic illiterates (and still are.) And the west pushed this Privatize All The Things model into the former Soviet bloc, too, where mass brutal privatization of the huge portfolio of state assets created the kleptocrat economic they have there now. Nobody ever denied that t…

No, the west didn't "push" eastern European kleptocrats into stealing everything in the privatisation drives, they didn't need any outside encouraging.

Its really disconcerning how many people simply assume that small nations have no agency whatsoever. It's this kind of thinking that births ideas about Russian/American zones of influence around Europe and similar very dangerous antiquated nonsense.

It need to die.

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