5 ms·

Oh so wrong. Just about all those places who privatised state utilities and brought in the market are, in varying degree, regretting it. Take Thames water, bus

Oh so wrong. Just about all those places who privatised state utilities and brought in the market are, in varying degree, regretting it. Take Thames water, busy playing with offshore finance plays, massively increasing profit and exec pay whilst reducing on all performance measures. Worst nationally for leaks, rate of fixing leaks, managing supply, it goes on.

pitaj 7y ago
"Privatizing" state utilities is not equivalent to bringing in the market. Usually privatization just means converting the government-managed monopoly to a heavily regulated, privately managed, government-sanctioned monopoly. There's no market there.
- NeedMoreTea 7y ago
  There is a market across much of Europe, a proper, functioning mature but rent-seeking market - as is to be expected from a utility. I can get my electricity from any of the companies in the UK, same for gas, without any restriction. I can choose on price or service, regardless of where I live. Yet service standards have declined, prices have risen far in excess of inflation, and buffer overhead of generation, production and storage has declined. The national grid is more fragile than it was as a result. That's despite efforts of the grid to modernise, and provide a smart grid for renewables. It's required additional regulation to bring back a little headroom on the grid, and inadequate regulation to prevent extreme profit-seeking. The projected plans for additional pumped storage and hydro and tidal schemes have been shelved. For decades. Electric has indulged in the same banking roulette with currency plays seeking profit in preference to producing electricity. So what part of the market is missing? None. What advantages has the market brought? For execs and shareholders, free money! For customers and the climate? More costs, poorer service. The biggest winners? The US corporations and hedge funds who fell like vultures on the privatised companies. Oh, and the French state - their power is still significantly state owned, I think 51%. They've been able to save their tax payers money by joining in the profiteering from UK generation - one of the big 6 UK suppliers is EDF: Électricité de France.
  - AnthonyMouse 7y ago
    Markets require competition. If I have to pay a lawyer thousands of dollars before I can install some solar panels in my back yard and start selling the power to my neighbors then I'm not going to do it, and if the only remaining companies who do are an oligopoly of huge players with the regulators in their pocket then you no longer have a market. A lot of that is regulatory capture, but the other huge factor is administrative costs. Even if I can do a great job and do everything safely with no danger to anyone -- suppose I'm an electrical engineer -- then I'm still not actually allowed to do it because the rules require an electrician. We could have simple rules -- don't electrocute people, don't start a fire -- but sometimes it will happen despite our best efforts. Then a bureaucracy doing the work will want to defer blame. A set of regulations allow that. If there is a fire but they followed the regulations, well, they followed the regulations. Not their fault anymore, even though it ought to be. But then every time something bad happens, you get another rule (even if there are five other, possibly better, ways to solve the same problem), until the rules are so complex that only a large bureaucratic entity can follow them. Having destroyed competition, we can now blame the market for the resulting badness.
    - NeedMoreTea 7y ago
      Hmm, America sounds deeply broken if that's true - we don't need thousands on lawyers for solar installation here. Contact installer, arrange appointment, complete the few bits of paperwork - unless your house has restrictions on works, eg shared property or rental. Planning permission in national park areas is, I think, required. As for the other, it pays to remind ourselves why we have some of those rules. After years of assorted homes and offices, seeing the horrific electrical or plumbing ideas people have had, most of them are there for a purpose. "Don't electrocute people" isn't nearly enough to get a dim bulb technician to know the right wiring or grounding rating for a particular use, or correct routing, or to prevent corners being cut when the company employing pays them minimum wage or on piecework. Best efforts are regularly compromised as a matter of policy when profit is the key driver. It's an area with clear need for strong regulation, otherwise people die. As someone who rewired my first house, even the onerous regulation wasn't too bad - do the work, stop at the 80 amp fuse, and get a suitably qualified electrician to check and sign it off before hook up. I forget the costs now, but perhaps pay £200 for the safety check and hookup, but saved £2,000+ for having someone rewire. The rules are simple. They have to be in order for the semi-interested teen to be adequately taught. No small business or self employed guy need be ruled out. I have a friend who, for developing his business, did a few of these courses a few years back - to get the necessary papers to add additional services. His recollection: Extreme boredom because mostly they try to teach common sense - something vanishingly rare - as a college course, pitched for those who had difficulty with shoelaces. Sadly some of that is the price to be paid for not killing people with shite wiring or gas plumbing. Deregulation or simplification has a death toll - which is why the rules got writ in the first place. I vote to keep - even if the rules are imperfect as they are 99% common sense. I've seen (and paid to repair or replace) what people do to houses and offices, left to their own devices, more than enough times than to encourage more.

pitaj 7y ago

"Privatizing" state utilities is not equivalent to bringing in the market. Usually privatization just means converting the government-managed monopoly to a heavily regulated, privately managed, government-sanctioned monopoly. There's no market there.

NeedMoreTea 7y ago
There is a market across much of Europe, a proper, functioning mature but rent-seeking market - as is to be expected from a utility. I can get my electricity from any of the companies in the UK, same for gas, without any restriction. I can choose on price or service, regardless of where I live. Yet service standards have declined, prices have risen far in excess of inflation, and buffer overhead of generation, production and storage has declined. The national grid is more fragile than it was as a result. That's despite efforts of the grid to modernise, and provide a smart grid for renewables. It's required additional regulation to bring back a little headroom on the grid, and inadequate regulation to prevent extreme profit-seeking. The projected plans for additional pumped storage and hydro and tidal schemes have been shelved. For decades. Electric has indulged in the same banking roulette with currency plays seeking profit in preference to producing electricity. So what part of the market is missing? None. What advantages has the market brought? For execs and shareholders, free money! For customers and the climate? More costs, poorer service. The biggest winners? The US corporations and hedge funds who fell like vultures on the privatised companies. Oh, and the French state - their power is still significantly state owned, I think 51%. They've been able to save their tax payers money by joining in the profiteering from UK generation - one of the big 6 UK suppliers is EDF: Électricité de France.
- AnthonyMouse 7y ago
  Markets require competition. If I have to pay a lawyer thousands of dollars before I can install some solar panels in my back yard and start selling the power to my neighbors then I'm not going to do it, and if the only remaining companies who do are an oligopoly of huge players with the regulators in their pocket then you no longer have a market. A lot of that is regulatory capture, but the other huge factor is administrative costs. Even if I can do a great job and do everything safely with no danger to anyone -- suppose I'm an electrical engineer -- then I'm still not actually allowed to do it because the rules require an electrician. We could have simple rules -- don't electrocute people, don't start a fire -- but sometimes it will happen despite our best efforts. Then a bureaucracy doing the work will want to defer blame. A set of regulations allow that. If there is a fire but they followed the regulations, well, they followed the regulations. Not their fault anymore, even though it ought to be. But then every time something bad happens, you get another rule (even if there are five other, possibly better, ways to solve the same problem), until the rules are so complex that only a large bureaucratic entity can follow them. Having destroyed competition, we can now blame the market for the resulting badness.
  - NeedMoreTea 7y ago
    Hmm, America sounds deeply broken if that's true - we don't need thousands on lawyers for solar installation here. Contact installer, arrange appointment, complete the few bits of paperwork - unless your house has restrictions on works, eg shared property or rental. Planning permission in national park areas is, I think, required. As for the other, it pays to remind ourselves why we have some of those rules. After years of assorted homes and offices, seeing the horrific electrical or plumbing ideas people have had, most of them are there for a purpose. "Don't electrocute people" isn't nearly enough to get a dim bulb technician to know the right wiring or grounding rating for a particular use, or correct routing, or to prevent corners being cut when the company employing pays them minimum wage or on piecework. Best efforts are regularly compromised as a matter of policy when profit is the key driver. It's an area with clear need for strong regulation, otherwise people die. As someone who rewired my first house, even the onerous regulation wasn't too bad - do the work, stop at the 80 amp fuse, and get a suitably qualified electrician to check and sign it off before hook up. I forget the costs now, but perhaps pay £200 for the safety check and hookup, but saved £2,000+ for having someone rewire. The rules are simple. They have to be in order for the semi-interested teen to be adequately taught. No small business or self employed guy need be ruled out. I have a friend who, for developing his business, did a few of these courses a few years back - to get the necessary papers to add additional services. His recollection: Extreme boredom because mostly they try to teach common sense - something vanishingly rare - as a college course, pitched for those who had difficulty with shoelaces. Sadly some of that is the price to be paid for not killing people with shite wiring or gas plumbing. Deregulation or simplification has a death toll - which is why the rules got writ in the first place. I vote to keep - even if the rules are imperfect as they are 99% common sense. I've seen (and paid to repair or replace) what people do to houses and offices, left to their own devices, more than enough times than to encourage more.