61–70 of 609 posts
The Economist, publishing an article (even just an opinion piece by a guest author) about privatisation being a failure? Wow...
https://www.economist.com/by-invitation/2023/07/06/thames-wa...
Although they went quite far to be clear it wasn't written by them.
That said I've not found the economist to be dogmatic when it comes to privatisation. They typically come across as quite practical to me.
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…
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.
So how do you extract profits then?
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…
https://archive.is/mnZlZ
Earlier quoted context omitted.
I think education is actually case where the free market would solve a lot of issues. Making schools compete for students would incentivise schools to provide a more valuable education.
You end up pricing people out of the best possible education unless you regulate heavily, at which point you may as well have state-run education.
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…
Moving control of capital to capitalists. That's what it does. That's all it does. That's all it's ever been capable of doing.
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…
The other side of that coin is, with quality as the main motivator, the prices go up. There's no free ride either way through organising things differently, its a choice between quality or price (as opposed to getting quality at a cheaper price). The other issue of course is in a public setting, there is no motive for efficiency.
Theres actually a pretty huge amount of "free ride" sitting there waiting to be ridden.
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.
In hindsight, much stricter regulation regarding reinvestment of profits would have been a good idea.
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…
I too believe that free markets are the solution to a great many of the conundrums of organising a society, but I also believe that a strong and socially conscious (by which I mean its prime directive is the enhancement and improvement of living conditions for all of those under its jurisdiction) regulatory hand is necessary.
The U.K. has plenty of regulations, and toothless enforcement of practically all of them, to the extent where ignoring them and the ensuing fines are just a cost of doing business.
With firm regulation, a free market could operate both profitably and fairly to run public services.
As long as there’s a commingling of commercial and political interests, however, this is an improbable reality. The changes would have to start in the culture of government.
Unfortunately, this will take a lot of political capital to change. I can see there being a lot of debate about how the UK compensates private owners for nationalising the infrastructure again (likely at an inflated price). It will likely be another situation where the average person loses out, in favour of private owners, and will be made to pay the price by inflated water prices to offset the lack of maintenance and expansion that should have taken place, instead of extracting maximum funds to shareholders.
I wonder also how this will be spun - as a one off 'market failure' or as a systemic problem with extracting maximum profits at the expense of the users (i.e. enshittification).