Privatisation has been a costly failure in Britain • Hacker News Board

Re: Privatisation has been a costly failure in Britain

#81

Post by iraqmtpizza » Tue, Jul 11, 2023, 10:07 AM UTC

ciconia wrote: post #39

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…

Free markets don't magically solve the problems of capitalism. You still have to deal with monopolies, entrenched market leaders, mergers leading to less competition, backroom non-competition agreements, lobbying for prefential treatment, revolving doors between regulators and market players, or just plain corruption and bribery. What I see everywhere, not just in Britain, is the same old story over and over again: p…

odd to say problems of capitalism when none of those are peculiar to capitalism. and a regulated market in which lobbyists vie for preferential treatment is the antithesis of a free market

Re: Privatisation has been a costly failure in Britain

#82

Post by mnd999 » Tue, Jul 11, 2023, 10:08 AM UTC

mrfumier wrote: post #62

juujian wrote: post #25

Earlier 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.

"And you don't extract profits from a rail line by offering the best service." So how do you extract profits then?

Minimise investment to maximise profits, which you take, whilst running the minimum service required to avoid contract penalties or publicity so adverse you lose your contract. Then threaten to go bust and get bailed out by the government when the infrastructure starts to break a few years later.

At least that’s they playbook they’re all using.

Re: Privatisation has been a costly failure in Britain

#83

Post by markus_zhang » Tue, Jul 11, 2023, 10:08 AM UTC

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…

Privatization of public sector has nothing to do with free market. Free market has been dead since the 19th century.

Re: Privatisation has been a costly failure in Britain

#84

Post by PartiallyTyped » Tue, Jul 11, 2023, 10:08 AM UTC

brutusborn wrote: post #18

PartiallyTyped wrote: post #6

Earlier quoted context omitted.

Add education to that too. It should be pretty obvious to everyone that quality education is a matter of national security but here we are, with people proudly uneducated, who - in their wilful ignorance - harm others. Thank you to everyone who flagged me and now I can't respond or comment in this thread <3

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 want to provide quality education to __ALL__ of the population. I don't mean university level education.

I mean real world education, such as how their body works, how to navigate society, critical thinking, cognitive biases, how probability works. If humanity is to survive we need to move away from empiricism and dogma, we need to move towards an educational system where kids grow into rational adults.

Re: Privatisation has been a costly failure in Britain

#85

Post by jleask » Tue, Jul 11, 2023, 10:08 AM UTC

mrfumier wrote: post #62

juujian wrote: post #25

Earlier 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.

"And you don't extract profits from a rail line by offering the best service." So how do you extract profits then?

Cutting corners and costs e.g. shutting ticket offices, doing just enough to barely offer the service. It's not like your passengers have any sensible alternative. If that doesn't do it then you can also load the company up with debt and pay yourself a nice dividend until rates rise.

Re: Privatisation has been a costly failure in Britain

#86

Post by Gareth321 » Tue, Jul 11, 2023, 10:09 AM UTC

This is really an eternal debate because both public and privatised services fail in numerous and various ways. The answer is a hybrid model, but because of complexity, there are always examples of failure to point at. So we’re doomed to swing between these models forever.

Re: Privatisation has been a costly failure in Britain

#87

Post by jahnu » Tue, Jul 11, 2023, 10:09 AM UTC

mrfumier wrote: post #62

juujian wrote: post #25

Earlier 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.

"And you don't extract profits from a rail line by offering the best service." So how do you extract profits then?

By competing to make the best rolling stock, online booking systems, catering, cleaning services, etc. These contracts should be put out to tender and should the promised level of service not be delivered then contracts should be lost and/penalties applied where necessary.

Most important is that the target service coverage, quality, etc should be decided by government (who should be seeking to please voters), not corporations who are seeking to please shareholders.

Re: Privatisation has been a costly failure in Britain

#88

Post by hsjqllzlfkf » Tue, Jul 11, 2023, 10:10 AM UTC

mrfumier wrote: post #62

juujian wrote: post #25

Earlier 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.

"And you don't extract profits from a rail line by offering the best service." So how do you extract profits then?

Cut costs. And if youre in a monopoly position, you can in addition prices.

I mean, do you really not understand how earnings are calculated, or are you trolling?

Re: Privatisation has been a costly failure in Britain

#89

Post by mrcartmeneses » Tue, Jul 11, 2023, 10:10 AM UTC

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…

There are two tests that privatisation has to pass. 1. Would it result in a monopoly, if so that’s a fail. 2. Does privatisation add value to the consumer? The evidence on that one so far is absolutely not.

In general public services exist as public entities because they would otherwise necessarily be monopolies, and the only lever the public can therefore have is some kind of democratic process.

In the case of UK privatisation it’s clear that the policy was merely a wealth-pump designed to extract value from a captive set of consumers.

Re: Privatisation has been a costly failure in Britain

#90

Post by juujian » Tue, Jul 11, 2023, 10:11 AM UTC

mrfumier wrote: post #62

juujian wrote: post #25

Earlier 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.

"And you don't extract profits from a rail line by offering the best service." So how do you extract profits then?

By running your lines on a shoestring budget, how else would you? The contacts have a fixed life time, keep your expenditures low and you can extract the highest profits. Long-term maintenance in particular suffers after privatization, because why would you, that doesn't align with your goals. And the risk is nill, because the government needs to provide the services so if things go awry you have little too worry about. They will have to bail the line out. Just find a way to move money from the entity to shareholders while you can and you're good, they are not clawing that back.