The Political Thread

[ZenArcade]

We're talking about terrestrial health privatisation Shark.; not sub-aqueousl privatisation in Monterry bay! Z

[IndigoPrime]

Quite. And I'm struggling to think of many cases of privatisation where the public has benefitted.

- Our train fares are among the highest in Europe, and franchises are often owned by foreign states, yet the British state is legally barred from bidding on them. The net result is a severe reduction of economy of scale, higher prices, and subsidising commuters overseas. (I recall reading pricing a couple of years ago, where it showed you can get an 'all Germany' annual pass for less than a typical London-Brighton commuter pass.)

- Water and other essential utilities also suffer from a lack of scale, and from having to ensure a certain amount of cash flows back into shareholder pockets. Water in particular suffers from low investment regarding leaks and infrastructure leaks. Locally, sewage repair is a major problem, to the point problems known about for years are essentially ignored until streets start collapsing. Naturally, bills then rise to deal with the added costs.

- Telecoms might be an exception. In things like broadband, we have a fairly robust level of competition, albeit primarily due to local loop unbundling. (Otherwise I suspect we'd have a duopoly or at most three companies competing.) Even so, it's hard to see how the base infrastructure being privatised has been hugely beneficial.

The elephant in the room, of course, remains taxation. If the services are to be nationalised, the money has to come from somewhere. Mind you, people don't seem to recognise how much they're already paying in subsidies anyway, such as for trains.

[Jim_Campbell]

Quite. And I'm struggling to think of many cases of privatisation where the public has benefitted.

Quite. We pay more to subsidise our railways now than we ever did when it was British Rail, and yet all the train operators are profitable. A big chunk of those profits feeds into the coffers of the French and German national rail companies, effectively subsidising the fares of European rail passengers.

As for the utilities, they were handed businesses with very clear cycles of profit and investment but they have chosen to take the profits and make no provision for the investment phases of their businesses.

See: all the power stations that are about to go out of service with no replacements even in the planning stages. All of these stations had known 'life expectancies' and the power companies chose to take profits rather than make provision for their replacements, because they know that no government of any political persuasion will be the one to let the lights go out. Result? Massive profits for the power companies and their shareholders, whilst the taxpayer is going to have to offer a huge subsidy to get the fucking Chinese to build new nuclear power plants in the UK.

I'm old enough to remember the 70s, and I'm not pining for some rose-tinted, misty-eyed version of the nationalised industries of the 70s, but we are looking at the demonstrable failure of thirty of years of the neo-liberal privatisation agenda. There has to be a better way of doing this, and yet suggesting that the unfettered free market isn't the solution to everything gets you labelled as some kind of Militant Tendency throwback.

Cheers

Jim

[The Legendary Shark]

I agree with everything you say, IP, but the fact remains that the most efficient economic system so far devised is the true free market, or 'agora' (I think it's called).
.
In the true free market, competition and quality (and equality) go hand in hand leading to efficient and competitive services.
.
The trouble is that we don't have a free market, we have a corporatist or fascist market. Large corporations call the shots through legislation, monopoly and sheer size. There is no real competition (a few pennies here and there on this or that hardly qualifies) and therefore no real efficiency (except in the maximisation of profits).
.
Remove state interference with the Economy and allow the free market to operate on a level playing field* and privatising any services would be a good idea. So would nationalising them but to a lesser degree.
.
*This does not imply a lack of law or oversight, a 'Mad Max Economy,' so to speak.

[Professor Bear]

They say it's a free market until it fails - which we now know it always will - at which point it's time for socialism to save the day with a bailout.

[JPMaybe]

I agree with everything you say, IP, but the fact remains that the most efficient economic system so far devised is the true free market, or 'agora' (I think it's called).
.
In the true free market, competition and quality (and equality) go hand in hand leading to efficient and competitive services.
.
The trouble is that we don't have a free market, we have a corporatist or fascist market. Large corporations call the shots through legislation, monopoly and sheer size. There is no real competition (a few pennies here and there on this or that hardly qualifies) and therefore no real efficiency (except in the maximisation of profits).
.
Remove state interference with the Economy and allow the free market to operate on a level playing field* and privatising any services would be a good idea. So would nationalising them but to a lesser degree.
.
*This does not imply a lack of law or oversight, a 'Mad Max Economy,' so to speak.

Shark, we've talked enough about this to know that on this point our worldviews are pretty much orthogonal, but can you name a real-world example of such an idealised free-market working, for essential utilities and on a national scale?  Likewise, some evidence of "competition and quality [going] hand-in-hand" would be appreciated- otherwise it's just a platonic ideal that doesn't mesh at all with observed human behaviour and psychology.  There's also the practical impossibility of having such an idealised "true" free market with services that require vast amounts of fixed infrastructure.

I also fail to see how removing government oversight would create a level playing field without some kind of year-zero abolishment of existing companies and redistribution of wealth.

[IndigoPrime]

Continuing from what JPMaybe notes, I'd also argue that in some cases, there simply is no space for effective competition. With, say, supermarkets, it would be absurd to nationalise. Even if there's more than a whiff of cartel these days, there is clear competition. You can take your business elsewhere. But what of trains? I live near a station where I can take a South West Trains service east, towards London, or west, towards Basingstoke. That's it. I have no choice. There is no competition. Simply taking bids for the franchise every decade isn't competition — it's a lowest-bidder frenzy for a regional monopoly.

This is much the same elsewhere, too. Utilities are run in a manner that beggars belief, and Jim's note about power stations showcases how ridiculous the situation in Britain now is. (Is it still just the Chinese? I thought we at one point were getting the Chinese to pay the French to build power stations, in a country that could pretty rapidly convert almost entirely to renewables, given the light, wind and tidal clout we have.)

And, yeah, it would be good to have some concrete examples of privatisation (in the UK especially) that has been hugely beneficial, and without ignoring context and the fact time has moved on. (With trains, I'm sick of people banging on about British Rail in the 1970s. Yes. Great. That was over 40 years ago. Things have changed. And given that plenty of other countries have superb nationalised rail, are we simply saying the Brits are somehow too incompetent or stupid to make something similar a success here too?)

[Old Tankie]

Lot's of extra money for the NHS.

[Jim_Campbell]

Lot's of extra money for the NHS.

Explain, because the tendering process is driving up the basic running costs of the NHS at the expense of service delivery, whilst the actual spending of the money delivering privatised services is entirely hidden behind 'commercial confidentiality'.

[Old Tankie]

So boy George is lying on live TV?

[Professor Bear]

That all sounds very technical, Jim.  The main thing is I'm alright.

[Old Tankie]

No, I don't think you are.

[TordelBack]

G'wan the Brits - once that nasty old NHS thing is out of the way you can scrap the BBC, and then no-one in the world will view your country with envy ever again.  You're a surprisingly egalitarian lot for a constitutional monarchy, but I suppose it is one way to stem the flooding brown hordes that besiege you.   

[Old Tankie]

Why would we get rid of the NHS and the BBC?

[Jim_Campbell]

So boy George is lying on live TV?

Again, you point to something the Tories are saying as if it proves your point. I'm not watching the TV (I'm—mostly—working) but at this point, I wouldn't believe a single word any of them says on the NHS. From the top-down re-organisation they promised not do*, to repeated claims to have 'protected' the NHS budget when they've shrunk it in real terms every year they've been in power.

So, no, I don't believe him, whatever he's saying.

Which isn't my point, and is simply a deflection tactic you've used before.

How does privatisation mean "more money for the NHS"? Specifically. You made that claim, so back it up or withdraw it.

Jim

*And which has resulted in the government, by a minister's own admission, 'losing control' of the NHS.