Hey private enterprise enthusiasts.
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@mrundkvist Empirically disproven by basic mathematics. And this isn’t like “Male/female is basic biology!” which is expanded later. Profit doesn’t get more subtle than “surplus value”. There are things to be learned from private industry, but efficiency definitely isn’t one of them.
People who believe privatizing government services can improve the service are economically illiterate. And sure, tons of people are economically illiterate.
Reminds me of how many businesses went “Moving to AWS will save us so much money!”, then they were shocked their ongoing bills were 20x as high. Like they thought *Amazon*—one of the biggest storefronts in history—is a charity.
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Hey private enterprise enthusiasts. You believe that the public sector can save money by handing over utilities to companies, which are inherently more efficient.
Here's why this doesn't work.
You have to pay someone to monitor the private companies. Because they have no incentive to deliver what they promised. They always cut corners in the name of profit. And that monitoring eats the savings you hoped for. While you have no control over your utilities.
@mrundkvist@archaeo.social by the same token most "work requirement" programs for assistance and other beaucratic mazes setup to push people deemed unworthy end up costing more than not having, because operating the programs cost so much more
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@mrundkvist@archaeo.social
the companies then use the profits they make to buy the politicians overseeing the watch dogs and regulations ... aaaand you end up with English water or Fukushima.@Theriac @mrundkvist OTOH if it's publicly owned then there is no regulator, just a government department marking its own homework and probably declaring its failings a state secret.
You can't win.
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@Theriac @mrundkvist OTOH if it's publicly owned then there is no regulator, just a government department marking its own homework and probably declaring its failings a state secret.
You can't win.
@tokensane@mastodon.me.uk @mrundkvist@archaeo.social
Look into how well privitisation of services went in the UK from Thatcher onwards. Leaving aside the fact publicly owned assests were converted into private at discount prices - the moment you turn a service into an entity seeking profit the service deteriorates. In Japan for example they privatised their telecom in 1985 and it is pretty typical. It intentionally stifled the spread of the internet in the 1990s because it made more money selling phone time units than infrastructure access. Even now despite being a private company it reacts to technological changes at a glacial pace, because it was handed a monopoly at inception and has no reason to innovate.
Thatcher made the play book for conning people into accepting privatisation - claim the entity is bloated and inefficient, declare cuts are necessary then starve it of funding and then point at how badly it performs when the cracks starts showing. Rinse and repeat until people get fed up with the dotty service.
At the time of writing - most countries have had longer experience of freidmanite mantras regarding public ownership, than they had of publicly owned companies and manufacturing - for the UK 25 or so years approx for nationalised companies vs nearly 50 years of friedmanite "government should not supply services". -
I usually shut up the excuse makers saying it costs twice as much to incarcerate s/o than to support that person and send him to school for two years to actually ... get a job
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If you think I'm exaggerating, think about it.
What is the incentive for a private company to fulfil every detail of the contract?
Only your monitoring. If nobody can tell whether they have done what you paid them to do, then it is economically rational not to do it. Avoiding that expense goes straight to the company's annual profit.
@mrundkvist
Where did the maintenance money go? Shareholders. Will they pay for maintenance? Of course not. But taxpayers will eventually be forced to pay for the utility operator's negligence -
Hey private enterprise enthusiasts. You believe that the public sector can save money by handing over utilities to companies, which are inherently more efficient.
Here's why this doesn't work.
You have to pay someone to monitor the private companies. Because they have no incentive to deliver what they promised. They always cut corners in the name of profit. And that monitoring eats the savings you hoped for. While you have no control over your utilities.
@mrundkvist Anybody who thinks public sector utilities should be taken over by private companies needs to go look at what fucking Thatcher did in the UK and then shut the fuck up.
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Hey private enterprise enthusiasts. You believe that the public sector can save money by handing over utilities to companies, which are inherently more efficient.
Here's why this doesn't work.
You have to pay someone to monitor the private companies. Because they have no incentive to deliver what they promised. They always cut corners in the name of profit. And that monitoring eats the savings you hoped for. While you have no control over your utilities.
See also “natural monopolies“
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Hey private enterprise enthusiasts. You believe that the public sector can save money by handing over utilities to companies, which are inherently more efficient.
Here's why this doesn't work.
You have to pay someone to monitor the private companies. Because they have no incentive to deliver what they promised. They always cut corners in the name of profit. And that monitoring eats the savings you hoped for. While you have no control over your utilities.
@mrundkvist Yup. Everything that has been privatised over here (or had parts handed to the private sector. Looking at you NHS) has become objectively worse as they juts focus on shareholder profits. Nobody not even the regulator appears to have teeth to stop this.
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Hey private enterprise enthusiasts. You believe that the public sector can save money by handing over utilities to companies, which are inherently more efficient.
Here's why this doesn't work.
You have to pay someone to monitor the private companies. Because they have no incentive to deliver what they promised. They always cut corners in the name of profit. And that monitoring eats the savings you hoped for. While you have no control over your utilities.
Hey private enterprise enthusiasts. You believe that the public sector can save money by handing over utilities to companies, which are inherently more efficient.
Anyone who claims to believe this is ignorant, naïve, or lying.
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Hey private enterprise enthusiasts. You believe that the public sector can save money by handing over utilities to companies, which are inherently more efficient.
Here's why this doesn't work.
You have to pay someone to monitor the private companies. Because they have no incentive to deliver what they promised. They always cut corners in the name of profit. And that monitoring eats the savings you hoped for. While you have no control over your utilities.
@mrundkvist The government is better at distributing things that you can't realistically opt out of.
Rrofit always wants to be able to eliminate less profitable customers and to charge what the market will bear. So you have to have the ability to say no. -
@tokensane@mastodon.me.uk @mrundkvist@archaeo.social
Look into how well privitisation of services went in the UK from Thatcher onwards. Leaving aside the fact publicly owned assests were converted into private at discount prices - the moment you turn a service into an entity seeking profit the service deteriorates. In Japan for example they privatised their telecom in 1985 and it is pretty typical. It intentionally stifled the spread of the internet in the 1990s because it made more money selling phone time units than infrastructure access. Even now despite being a private company it reacts to technological changes at a glacial pace, because it was handed a monopoly at inception and has no reason to innovate.
Thatcher made the play book for conning people into accepting privatisation - claim the entity is bloated and inefficient, declare cuts are necessary then starve it of funding and then point at how badly it performs when the cracks starts showing. Rinse and repeat until people get fed up with the dotty service.
At the time of writing - most countries have had longer experience of freidmanite mantras regarding public ownership, than they had of publicly owned companies and manufacturing - for the UK 25 or so years approx for nationalised companies vs nearly 50 years of friedmanite "government should not supply services".@Theriac @mrundkvist Its not so simple. See this graph of UK rail use: https://en.wikipedia.org/wiki/Impact_of_the_privatisation_of_British_Rail#/media/File:GBR_rail_passengers_by_year_since_1830.png British Rail thought its job was "managed decline". Private operators thought otherwise. And compare UK private rail with German nationalised rail: https://zbir.deutschebahn.com/2024/en/interim-group-management-report-unaudited/product-quality-and-digitalization/punctuality/
Telephones run by the GPO were a national joke. You had to wait months to get your phone connected. Connecting any 3rd party equipment was illegal. Today I have multiple companies competing to lay gigabit fibre to my door.
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Hey private enterprise enthusiasts. You believe that the public sector can save money by handing over utilities to companies, which are inherently more efficient.
Anyone who claims to believe this is ignorant, naïve, or lying.
Private companies are efficient, but at extracting wealth, not at providing services.
Publicly-owned utilities don't make a profit because they're not supposed to. If they did, it'd be *inefficient*: extracting money from the economy would be an unwanted side-effect of operation that the government would have to correct for.
Handing utilities to private companies always immediately has that side-effect *instead of* the effect of providing utilities.
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If you think I'm exaggerating, think about it.
What is the incentive for a private company to fulfil every detail of the contract?
Only your monitoring. If nobody can tell whether they have done what you paid them to do, then it is economically rational not to do it. Avoiding that expense goes straight to the company's annual profit.
@mrundkvist The history of the last 40 years of the UK is material evidence of it: from their "very efficient" trains to their "clean and pure" rivers with raw sewage from the water utilities. It was alwasy a con to enrich some pals.
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