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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

#551

Post by cycomanic »

dffdsa432 wrote: post #265
cycomanic wrote: post #240

Earlier quoted context omitted.

The USPS is "loosing" money because it was told to prefund it's Healthcare having to set aside $100 billion in 10 years (unlike any other company) . Moreover, it's much more a service than a business, e.g. it can not really set its own prices. https://www.barrons.com/articles/usps-louis-dejoy-post-offic...

I don't get it. The USPS has lost billions due to government policies and can't enforce prices due to government policies. They are forced to deliver to unprofitable routes and have prices set to inflation due to government policies. Private delivery services like Amazon and Fedex are generally profitable and don't have these issues. Why is a government alternative better?

Welcome to the world of privatising public services. This has been a scheme of free market politicians for years; call public services too expensive, strip them of funding and hamper them in other ways, then call out how they are not delivering on their promise. Then sell the off at bargain prices, often with additional government guarantees on revenue. After privatisation services don't improve and cost never go down, but somehow the public is better off?

Re: Privatisation has been a costly failure in Britain

#552

Post by pipes »

Well I'm glad telecoms were privatised, we have great competition, I shop around every two years and end up with a great deal. Compare that to the early 80s waiting god knows how long for a phone line.

Railways were privatised because government couldn't afford the investment required. But because of rail unions I'm currently subsidising rail travel I don't use.

Energy market competition has been destroyed by price controls (thanks Mrs May).

I can't read all the article because of the paywall. Nothing on archive.org yet. Maybe these points have already been addressed.

Re: Privatisation has been a costly failure in Britain

#553

Post by rightbyte »

darkclouds wrote: post #487
rightbyte wrote: post #241

Earlier quoted context omitted.

CEOs have almost no competitive pressure. They are mostly recruited within the upper class. Paying more won't net you a better one.

>CEOs have almost no competitive pressure. Yes they do, from rival businesses, superior and new technology, just look at Chat-GPT potentially putting programmers out of work, or telegrams being made redundant by pagers, and text messages and email. @arethuza >CEOs of corporations of the same size quite often have to find and retain customers in competitive markets - which is hardly the case with Thames Water? Water c…

> Yes they do

I meant while applying to their own position. Not between corps. The CEO market is artificially small.

Re: Privatisation has been a costly failure in Britain

#554

Post by gary_0 »

spacebanana7 wrote: post #337
friendzis wrote: post #279

Earlier quoted context omitted.

> But what is the definition of a public good? Whatever the populus via government decides that to be.

I don't think it's so subjective. If a democratic government decided that policing, clean air or firefighting weren't public goods they'd be incorrect. Even if polling supported it.

Anarcho-capitalists would argue strongly that all 3 of your examples are no different from any other service provided to customers. I've seen them (or sympathetic sci-fi writers) think up all sorts of imaginative scenarios about how that might work.

Personally I agree with you, I think privatizing any of those things would be madness, because the real world never ends up working like the ideological fantasy, but it's hard to get everyone to agree on what's an objective economic truth.

Re: Privatisation has been a costly failure in Britain

#555

Post by LastTrain »

flanked-evergl wrote: post #543
LastTrain wrote: post #395

Earlier quoted context omitted.

So you shared your experience with one co-op, do you think they are inherently worse than other types of business organizations? If so, why?

I definitely don't think they are inherently better. I'm sure some of them are good, but the real problem I see, as I already pointed out, is that shareholders have less ability to hold management to account than in more traditional business structures.

How do I hold the the CEO of Cable One to account, let alone better than I can hold my electric co-op to account? On my co-op I have a voting share, can run for office, directly lobby other co-op members directly, etc etc.

Re: Privatisation has been a costly failure in Britain

#556

Post by amai »

ilikerashers wrote: post #125
jacquesm wrote: post #53

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 th…

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.

The city of Berlin rebought its water supply from the private owner. It will also rebuy district heating and gas network. All this can be done, but it is quite expensive. It would have been better to not sell monopolistic infrastructure in the first place.

Re: Privatisation has been a costly failure in Britain

#557

Post by supertimor »

refurb wrote: post #102

I think it's funny when people lump all privatization other. Yeah, it can be done poorly, but I would argue that's more implementation than some condemnation of privatization all together. A good example is when people say "look how bad private healthcare is in the US!". Yeah, it's horrible because of the framework the government put around it. If you look at things like vision correction or plastic surgery, you have…

The major difference in you’re example is that plastic surgery and vision correction are elective procedures. When your choice is eating the cost of an inflated procedure or permanent disability/death, it’s really not much of a choice at all. Most people will opt to pay outrageous prices rather than the alternative. Privatization may work for non-essentials, but when essential public services are privatized, it needs heavy regulation (which, in itself, is not a permanent solution as it is subject to lobbying and regulatory rollbacks). Without strict regulations that are lasting, a company has little incentive to keep reinvesting in itself/improving its services when it has a captive customer base that is rooted on a basic human need. Essentially, the public has little choice but to use the privatized company’s costly but increasingly broken services.

Re: Privatisation has been a costly failure in Britain

#558

Post by amai »

Maybe counterintuitive privatisation of infrastructure often leads to inefficiencies in resource consumption. E.g instead of a single phone line for a house, multiple private provider will built multiple phone lines. Instead of a single cell phone tower every provider will build its own one. Instead of a single delivery car on the street there will be several (and are sometimes blocking each other). I believe a well managed monopoly is often more resource efficient and cheaper, because it doesn’t need to pay for all that redundant infrastructure.

Re: Privatisation has been a costly failure in Britain

#559

Post by ClumsyPilot »

AndreasHae wrote: post #541
ClumsyPilot wrote: post #537

Earlier quoted context omitted.

> am a deep believer in free markets There are more people proffesing their beliefs in this thread, than in most discussions about the Catholic church. In this entire thread noone considered - "let us have a look, which country has best railways" and maybe learn from Spain and China. In public discourse, ecomomy is treated like a religion.

You're implying that putting capital towards having the "best" railway is the most optimal use of that capital. I think it's much more complicated than that, and coincidentally, market mechanics are one way of crowdsourcing the decision of how capital is put to best use. I'm not saying it's always the best solution and free markets going unchecked can for sure cause more harm than good, but I think you're making it o…

"Best" does not mean 'Luxury service that costs the most capital", it can mean "the most cost effective", or "most envitonmentally efficiant"

We can debate metrics, but Britains aging and expensive diesel trains sont loom good in any of them.

Re: Privatisation has been a costly failure in Britain

#560

Post by robertlagrant »

happymellon wrote: post #545
robertlagrant wrote: post #523

Earlier quoted context omitted.

> Because buybacks in any other fashion only increase debt. What about using revenue to buy it? You don't have to use (or have) debt to buy something with revenue.

Because revenue is pure income without taking costs into account. So you could still be giving away money to cash out that is owed to someone else? If your revenue is based upon fictional income then these privatised public services will become tax payer problems because they can't be shut down.

I'm not saying that it's impossible that buybacks increase debt; I'm just countering your claim that buybacks always increase debt:

> buybacks in any other fashion only increase debt.

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