4 ms·

More socialist leaning countries privatize infrastructure. For example Ontario power generation. Is there conclusive evidence that privatization is worse? It

• deleted 9y ago
  [deleted]
• michaelt 9y ago
  Big difference between privatising the parts of the system that are a natural monopoly and those that aren't. Privatising the power cables going to people's homes is a dumb move - you won't get the benefits of the free market, as there's no competition between suppliers. But once the cables are in the ground, competition between multiple power suppliers might be possible - so long as customers can compare prices and switch suppliers easily; and the power plants aren't incentivised to cut long-term investments and imperil the country's energy security.
  • pjc50 9y ago
    This guy gets it. Privatisation on its own does not magically improve services and cut costs. Competition can do so. But privatisation without competition is just a monopoly license to print money.
  • crdoconnor 9y ago
    There's rarely any political push to privatize things that aren't natural monopolies though, precisely because nobody is going to make bank on that. In practice almost every privatization is simply an exchange where the new owner pays the government $x to help solve its "debt problem" (because the government may one day be rendered insolvent by running out of the cash it it prints). Then, the public gets soaked for $nx where n is usually at least > 2 and the government officials behind the privatization get some really lucrative jobs and speaking engagements after they leave office.
• afpx 9y ago
  At the local level, I could deal with private ownership. But if and only if there were strict regulations in place and an oversight body. But, at that point, would it really save local residents money anyway? The closer that the government is to me, I more that I can control it (albeit with much frustration sometimes). But, private ownership, I can't control.
• Jedd 9y ago
  > It's also politically expedient as it raises money. Raises is a very positive sounding word. Would it be better to couch that sentiment in terms of who's getting shafted (it extracts money from) or who's getting rich (it redirects wealth to)?
• mcv 9y ago
  > It's also politically expedient as it raises money. You don't get that money for nothing. You're selling part of the nation's infrastructure, that was paid for by taxpayers, to now be exploited for profit. The taxpayers end up paying twice. It's better to keep the essential infrastructure nationalised, and allow private parties to use it.
  • bmelton 9y ago
    > You're selling part of the nation's infrastructure, that was paid for by taxpayers, to now be exploited for profit Maybe. If it's taxpayer funded infrastructure, it doesn't perpetuate itself by self determination. It must be maintained with more tax dollars. Assuming the cost is equal whether it's privatized vs. state-owned, then it all boils down to a matter of ideological preference. Some object to others making a profit off of a public good. There may or may not be merit to those arguments, but they're completely orthogonal to whether or not there are costs associated with their maintenance, because there always are. The taxpayers always end up paying twice.
    • mcv 9y ago
      If costs are equal, the private for-profit entity is more expensive, because it wants to make profit. If it bought the infrastructure, it wants to recoup that investment.
      • bmelton 9y ago
        Apologies. I intended "costs" to mean "costs to consumer".
        • mcv 9y ago
          Sure, if the costs to the consumer is equal, it doesn't matter much. But I think that's unlikely. In a privatised versus nationalised comparison, I think the costs to the consumer are either going to be higher if it's an area where competition doesn't work efficiently (monopolies, duopolies, cartels), or lower if it's an area where competition does work efficiently (a transparent market with many suppliers).