Earlier quoted context omitted.
"borrowed £53bn in debt while distributing £72bn to shareholders" There is the difference
No lender is going to lend a business money just so it can pay the owners. They must have used the debt to finance operations, as opposed to cutting the dividend or even putting more money in. This allowed them to continue to have profits in the short term, at the expense of higher interest costs in the long term (which probably cause higher prices for customers in the long term).
Privatisation has been a costly failure in Britain
561–570 of 609 posts
Re: Privatisation has been a costly failure in Britain
#562Earlier quoted context omitted.
Are there any examples in modern economies? I know banks were temporarily nationalised but that wasn't a long-term plan.
Absolutely. Recently lots of Russian assets got nationalized in Germany on account of German national security in light of the energy crisis and the war with Ukraine. In NL we nationalized a bank (SNS bank) that failed, and one that would have failed (ABN). In Japan, in the wake of the Fukushima disaster there was an energy company nationalized. The USA (though they don't like to call it that) nationalized a bunch of…
Where has a government gone, woops, that privatisation was a bad idea, let’s buy back our national infra and burn the shareholders.
Re: Privatisation has been a costly failure in Britain
#563Earlier 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…
Re: Privatisation has been a costly failure in Britain
#564Earlier quoted context omitted.
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 protect…
That being the case then, I wonder what's different about countries that get it right? Better public sector management? Privatisation with stronger regulation?
Re: Privatisation has been a costly failure in Britain
#565Earlier quoted context omitted.
I don't think you understand what these companies do if you believe Thames Water is in competition with Evian or Brita. Remember they're not just providing drinking water but handling the treatment, recirculation and safe disposal of wastewater too. So in addition to having inadequate fresh water storage for some parts of England and cutting back maintenance to the extent that they lose an enormous amount in leaks, o…
> As a consequence of this there are some rivers, lakes and beaches in England + Wales that are now unsafe but which weren't before they were privatised. Carefully chosen words, someone has done their research! Thats what happens when new standards come into force and improve upon the old standards. https://environment.data.gov.uk/portalstg/home/item.html?id=... "The purpose of this dataset is to present a summary of…
Re: Privatisation has been a costly failure in Britain
#566Earlier quoted context omitted.
Absolutely. Recently lots of Russian assets got nationalized in Germany on account of German national security in light of the energy crisis and the war with Ukraine. In NL we nationalized a bank (SNS bank) that failed, and one that would have failed (ABN). In Japan, in the wake of the Fukushima disaster there was an energy company nationalized. The USA (though they don't like to call it that) nationalized a bunch of…
Not sure that is a reasonable answer. War time measures, financial crises and earthquakes are exceptional circumstances. Where has a government gone, woops, that privatisation was a bad idea, let’s buy back our national infra and burn the shareholders.
Re: Privatisation has been a costly failure in Britain
#567Earlier quoted context omitted.
Not really, it works really well for truly free markets like cosmetic surgery and vision correction. The “free market” healthcare in the US isn’t free at all, there are a ton of regulations many of which make it worse, not better.
No, it's because those aren't essential services that people need with little option to competitively shop for. People can choose not to get cosmetic surgery, or postpone it significantly, or shop attorney between many different options. They frequently can't for their health decisions. Again, it's 'market competition' amidst healthy consumer choice, not 'free markets' that are beneficial for society.
People already shop around for things like joint replacement.
Re: Privatisation has been a costly failure in Britain
#568I 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…
Re: Privatisation has been a costly failure in Britain
#569From my standpoint its obvious privatisation has been a failure for service quality, and I am glad that major institutions are finally catching on. In spite of attempts to introduce choice (see the way British Rail was privatised into rolling stock owners/operators, since scrapped railway operators, and brands) there is no efficient way to introduce choice with fixed infrastructure. Unfortunately, this will take a lo…
I think competition driven by low-cost carriers produced enormous value by lowering fares. From my admittedly uninformed viewpoint, I am not sure why airlines market can produce competition benefiting customers and rail market can't.
The train is the opposite of all of this.
The people that can afford it, are able to get a car and drive there at little perceived expense and better flexibility (people don't often factor in the cost of the car, road, road maintenance, MOT, road tax, repairs to their journey). So public transport ends up being for those who cannot afford it, or is convenient enough for.
Not all routes in the UK are profitable. Closing unprofitable routes is unpopular with constituents, and disrupting and isolating if the residents do not have the financial means to get a car, causing social incohesion. So to balance this out, companies had to have both unprofitable and profitable routes balance out, in the hope that they will find more efficiencies than being state run. Existing routes are also very difficult to shut down in the UK.
Keep in mind, budget airlines pioneered enshittification because there are few equally convenient alternatives. RyanAir infamously charges for everything. In principle this seems fine (pay for what you use), but then the poor UX hits. In some airport, if your suitcase wheel sticks out 2cm - you get a bill for £50. It costs £4-10 to sit with your friends. What also is working is that the budget airlines have not yet colluded to only run certain routes, and older, premium alternatives still exist. Once the old airlines either change or go out of business, and the companies start colluding, it will be high-cost, unpleasant stagnation.
Re: Privatisation has been a costly failure in Britain
#570Earlier quoted context omitted.
markets aren't features of the land that exist unspoiled until sullied by human hand -- what I see is that markets will always collapse into monopoly absent any countervailing force, for the simple fact that enterprise owners make more profit that way
The drug wars are one hell of a counter example. Although it has "regulation" in the form of military action being taken against the largest, especially when the cartel head gets too big for their britches.