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It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good. Networks and

It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good. Networks and infrastructure = little to no competition. Eg. networks naturally settle in a optimal geographical location and utilize economy of scale then. Can't compete with that. So don't privatise platforms. Rather - make them monopolistic and make them share the revenue with public using a monopoly tax. AT&T model. Translated to programmer speak: society's OS (law,defence,policing,roads,energy,networks,sewers,etc.) should be uniform and near monopolistic to maximize economy of scale. Society's Apps (businesses) running in the ecosystem of the OS should be private, numerous and competitive as much as possible. Occassionally you stumble upon a private business which develops a new network model and after some time it should be refactored from being an App to be part of the OS (eg. twitter).

eqvinox 6y ago
Road networks are a great example. Just assume the hypothetical position of a competitor. Where are you gonna build a competing road in, say, NYC? Each block only has 4 sides, and each of them already has a street. You could maybe compete on interstate highways or other long-area bits. Maybe. That's stretching it. Build a competing water supply network to each house? Another set of sewers? Electricity distribution? Hell no. IMHO all of these things should be communal property & development. The preconditions for free market are not met, it's not possible to compete; so the whole market equation falls apart. Hand the operation & maintenance out to some company or whatever, there it's possible to compete. But not the actual physical infrastructure.
- ethanbond 6y ago
  What about housing itself? There is only one building that can exist at 100 1st Ave, and its location is entirely unique/entirely monopolized.
  - snidane 6y ago
    That's actually land monopoly problem. Ie. whoever came first to claim the land has exclusive use rights on it forever, or as long as his descendants go. It's yet another monopoly problem even though it doesn't look like it at first glance. Each house basically sits on a piece of mlonopoly for the parcel below it, preventing others from use. It's not much of a big deal in general, but in congested big cities, it is a problem. It's the cause of high rents (by Ricardo's law od rent). The solution is also a kind of monopoly tax - land value tax (LVT). You pay yearly percentage of the market value. Achieving almost optimal allocation instead of current hereditary one.
    - yourapostasy 6y ago
      > You pay yearly percentage of the market value. Establishing "market value" is the rub. Texas for example, does not make real estate sales prices public. This has a lot of perverse effects, one of which is deep-pocketed commercial interests have pummeled public assessors until commercial property is tacitly way undervalued for tax purposes, yet is openly sold for much more than the purported tax basis. I've heard of a system I found interesting (but alas, can no longer find a reference to link) to competitively establish tax basis on commercial real estate (I wouldn't want this on natural person owner-occupied residential). You claim whatever tax basis you want. It gets published in the open. Whoever can put up completely unencumbered cash over the barrel for that basis + 7% or more though, can purchase the property. And by unencumbered, I mean not even investor syndication. Real, natural person, outright first and only lien on the cash, absolutely no liens tolerated against the property tied directly or indirectly to the cash. Cash goes into government-controlled escrow. Current owner has one year to pay difference on one year's worth of new imputed tax basis represented by the escrowed cash, and continue from that point forward with the new basis. If the owner comes up with it, the bidder loses 6% of the cash (or whatever the real estate industry commission structure is at that time in that locality) to the local government as commission to facilitate the price discovery. Bidder can increase bid at any time by adding to escrow account, until either current owner "sells" to bidder (and escrow releases 100% to the current owner, no commission), or bidder walks. I haven't sat down to really pencil it out, but I'm sure if someone did they'd find a way to game such a system, since I figured it otherwise would have been put into use.
  - eqvinox 6y ago
    The fact that it's unique/monopolized doesn't mean that competition is hampered. The building (or land parcel) at 100 1st Ave does not provide a service that is ubiquitously needed by almost the entire populace. If anything, this strengthens the argument. You can buy/rent/... a different parcel nearby, and this only affects you and your planned use of the building. But you can't switch to a different road network, and this affects everyone in their daily life. That said, I also agree with the sibling post that this is also a problem, just of a different kind.
  - imtringued 6y ago
    Housing isn't the problem here but as you said correctly, it's the land ownership that is problematic. If we assume that house owners merely rent the land then it's perfectly fine to build a private housing market since housing needs can differ drastically between citizens. Some need a big house for a large family with lots of children, others only need a studio apartment. Some people want a home workshop or a home office. The market finds a satisfying solution for everyone. Land ownership is problematic because neighborhood improvements can be extracted via land ownership. The most effective policy against this extraction is to simply tax the land itself and thus turn it into a liability if the value of the land grows. Ideally, property taxes would be replaced with land value taxes. If land is a liability the only reason why people would purchase it is to improve the value of the land and make it available for productive uses like renting it out to a large number of people.
- bko 6y ago
  I don't know if NYC infrastructure is a good example. The second avenue subway was the most expensive subway in the world on a per mile basis. Considerably more expensive than Paris or Tokyo > The estimated cost of the Long Island Rail Road project, known as “East Side Access,” has ballooned to $12 billion, or nearly $3.5 billion for each new mile of track — seven times the average elsewhere in the world Similarly, the fare only covers around 50% of the operating costs which hardly seems fair for NY state taxpayers that pick up the expense despite receiving no benefit. The competing services for infra in NYC are cabs, car pools, private buses, bike rentals, scooters, subways. For getting into/out of the city, you have a number of bridges. For instance, I can take Lincoln tunnel, Holland Tunnel or ferry. It would be great to have more options and obviously its not easy to build tunnels, but private ferry and water cab services could be expanded [0] https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-construction-costs.html https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-... [1] https://www.bloomberg.com/news/articles/2019-03-14/what-s-a-fair-fare-transit-experts-talk-proper-pricing https://www.bloomberg.com/news/articles/2019-03-14/what-s-a-...
  - rocqua 6y ago
    Its an interesting example, subways seem to have some minor room for competition, so the argument against privatization based on "there cannot be competition" does not quite apply. Even here though, there is a coordination problem to ensure various companies remain mutually compatible.
    - eqvinox 6y ago
      Competition on public transport is limited by the fact that you often need a cohesive network to get from A to B via C & D. If multiple companies cooperate on crossover ticketing and align their schedules, yes, it can work. Even more likely to work is a model where a central authority opens tenders for specific services, and transport companies can compete on that. Then again, I don't think it's viable to build subway tracks and tunnels to compete. Even if you have space under the earth, there may not be space for more stations, and good station locations are important too.
- rini17 6y ago
  Bore a tunnel!
- m4rtink 6y ago
  Seems to work fine in Japan for railways - there are three different rail connections from Tokyo to the Narita International Airport for example, each run by a different company (at the same time, we have 0 rail/subway connections to the Prague Airport:P). Same thing in many other places - in Kyoto there is big and nicely build station by JR and, Transport Tycon style 200 meters from it another big station by IIRC Kintetsu. Or in the middle of Tokyo, the Minami Senju station is effectively three station - One on the JR Joban line, one on Tokyo Metro and deep bellow another one on the Tsukuba express line. So its definitelydoable, even in the most densely populated of places, at least with rail. Also when you compare with places that have little to no competitionon the rail network you can clearly see the lack of service quality resulting from that. Well, if you get any service at all. :P
  - hinoki 6y ago
    I just found this [0] paper about the development of the Tsukuba Express, one of the more recent train lines into central Tokyo. Land owners whose land is taken away are given new plots of land that are smaller, but closer to stations. These smaller plots are worth more than the original land because they are now near (future) train stations. [0] http://www.wctrs-society.com/wp-content/uploads/abstracts/rio/selected/2800.pdf http://www.wctrs-society.com/wp-content/uploads/abstracts/ri...
    - m4rtink 6y ago
      That's really clever idea, no wonder they can get it to work, thanks for the article! BTW, that's something else I noticed in Japan - train stations are almost always hubs of commercial and often also cultural activity - there are shops, hotels, good restaurants and often also galleries, event spaces, monuments and even the buildings themselves are often architectonic masterpieces (for example JR Kyoto station, just check it out!). This definitely helps with passenger numbers and keeps the whole thing sustainable not to mention profitable. In comparison Czech & Slovak railway stations (Prague, Brno, Bratislava) are often run down, dirty, fregvented by questionable people who aren't going to ride the trains and any shops or food places are cheap low quality ones. As a result one tries to spend as little as possible on these train station, let alone spend there any money for the few sub-par amenities available. It's really strange why it is like this, given the missed commercial opportunities, seems to be much better in other european countries (Vienna, Eindhoven, etc.).
- mschuster91 6y ago
  > Hand the operation & maintenance out to some company or whatever, there it's possible to compete. Oh no. Construction, operation and maintenance of electricity and other vital networks (water, gas, sewage, telecommunication) should be done by the government as a government agency with a quality of service mandate and not in form of a profit-oriented company no matter if government owned or private owned / publicly traded - because "competition" and/or a focus on costs is always going to end in price and wage dumping, cutting corners and sometimes in deathly disasters (California fires caused by cutting costs on maintenance, Flint water scandal, Texas infrastructure collaps due to un-hardened systems, ...).
hn_throwaway_99 6y ago
I wish our political systems would admit to this. So often I hear one side praying at the alter of free markets and deregulation, while the other condemns any profit making business as greedy. It just seems to me that free markets work absolutely fantastic in some areas and absolutely horrid in others (health care being probably the most notorious example).
- imtringued 6y ago
  Yes, this is important. Free markets are just a tool. If there is a more effective tool then you should use that instead. I think it is particularly telling that one side is constantly engaging in corporate welfare when they talk about deregulation. The other side is exhausted from faceless corporations screwing them over. What's needed is more people who are on both sides and understand the whole picture. The idea that only one side is right is simply wrong. You need a wide variety of strategies. There is this mindset that capitalism is always wrong when the mindset should be capitalism is not always right, which is a completely different perspective. However, I am really disappointed that people don't think about how to make the system work for themselves. Corporate abuse doesn't necessarily have to be the rule. The political environment could be shifted to favor workers instead and to a certain degree this would benefit everyone, not just one side.
- x86_64Ubuntu 6y ago
  I think you are citing a false equivalency. "Any profit = Greedy" isn't as tightly held on the Left as Free-Market principles are on the right. The proof is in the pudding, which states have lost production of a service utility due to adhering to "Any profit is greed!"?
  - hn_throwaway_99 6y ago
    Well, I'll give you a specific example I was thinking of. Nearly every economist agrees that rent control is a bad idea if your overall goal is to make more affordable housing available to the largest possible population [1]. Yet I consistently see arguments in my left-leaning city against increasing density (e.g. with large multi family buildings) as "those greedy developers". Even the whole "Cancel Rent" protests during Covid often portrayed landlords as greedy (literal) rent seekers, despite the fact that some of the largest providers of affordable housing are small landlords at risk of losing their properties. The overall effect of this demonization of profit motive is a severe, and in some places catastrophic, housing crisis. [1] https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent...
rocqua 6y ago
> It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good. Its well understood by people who studied it well. However, there are still many pushes and arguments for privatisation that do not take these well understood facts into account.
clcaev 6y ago
While I agree with your sentiment, this was not exactly a private operator: this was a rural electric cooperative, that intentionally runs close to cost hile holding reasonable reserves. Its voting members were distribution cooperatives, whose voting members are individual households. This is about as sane as a platform ownership as one might have. This is not an obvious problem nor solution. As posted downstream, risk of polar vortex was even known and discussed by the general manager of the facility: https://www.energy.gov/sites/prod/files/2014/08/f18/karnei_statement_denver_qer.pdf https://www.energy.gov/sites/prod/files/2014/08/f18/karnei_s...
- eqvinox 6y ago
  The cooperative that went bankrupt isn't the platform that the argument applies to. In fact, you could create another cooperative without much trouble and start a parallel implementation of the same scheme. This really applies to the power grid itself. Even the power plants aren't covered by the argument, since if you have a reasonable grid, you can build another power plant of any kind you feel viable in some reasonably suitable place. [Ed. add.: the grid is actually the market. It facilitates the transactions between power plants and consumers.]
  - clcaev 6y ago
    If this cooperative was not the platform, what exactly is the platform being discussed? Why do you could think one could recreate such a large cooperative like this without much trouble? Isn't the likely outcome of this bankruptcy a sale of assets to private equity: a situation that can probably never be reversed? What do you think this cooperative did if it was not facilitating the transactions between power plans and consumers? I'm confused by your assertion.
    - eqvinox 6y ago
      > If this cooperative was not the platform, what exactly is the platform being discussed? The power grid is the platform; I'm not sure how the original poster intended to apply the platform argument to the cooperative. As far as recreating the cooperative goes: it doesn't need to start large, and I'm reasonably sure it doesn't hold much in assets. My understanding is that this cooperative is simply a collective of buyers who "pool their shopping", so money flows in and back out. A new cooperative may need to work its way back up to bulk pricing, but that should be doable?
rayiner 6y ago
> It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good That’s not “well understood” at all. Folks don’t remember how dysfunctional and sclerotic nationalized industries were in the 1950s and 1960s. There is a reason nearly every developed country got rid of them.
- disgruntledphd2 6y ago
  Yeah, mostly driven by the ideas of Milton Friedman. Fortunately, we can see that 40 years later there were no unpleasant side effects from introducing markets into almost every business and service /s.
  - tptacek 6y ago
    Working class people can now afford air travel, you can ship oranges between states without applying for a special trucking permit, almost 50% of Iowa's power generation is renewable, stock market trades went from 80c _per share_ to retail traders being paid to trade, and we still manage to make and enforce rules so that average gas mileage has gone from 13mpg to 26mpg. I don't agree with Rayiner about Texas, but I don't think you can wave your hands at 60s-70s deregulation and say "lol Milton Friedman". The deregulators were right about a lot of stuff.
cheph 6y ago
> It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good. Cite? I have lived in two countries, one with privatized market based grid and have not yet had one power failure, one with nationalized grid and producers grid that had daily 8 hours power outages for weeks on end to the point where year on year per capita electricity usage (an important measure for development) was going down. Anecdotes are not data, but all I can say is that most definitely every nationalised grid does not run better than every privatized grid, and without some data to back your claim I am skeptical.
rayiner 6y ago
The "deregulated" energy industry is built around that exact principle you're talking about, both in the US and the EU. The "platform" is the grid, which delivers electricity from plants to homes and businesses. Because competition in this area is limited, these companies are regulated monopolies, whose infrastructure decisions and rates are closely supervised by a government energy board. These entities work as part of a regional transmission organization, a highly regulated entity that ensures stability of the grid as a whole (https://en.wikipedia.org/wiki/Regional_transmission_organization_(North_America) https://en.wikipedia.org/wiki/Regional_transmission_organiza...). Generators and users of electricity operated on top of that platform. Generation is a competitive market--many entities can be delivering power into the grid, and the product is fungible. Users don't care where the electricity comes from, just about the price. Electricity generation is therefore quite suitable for market mechanisms. What happened in Texas was not an example of a privatized "platform" failing. The platform (the grid) was fine. Instead, adverse weather events caused a shortage of the product (electricity) running on top of the platform. Put differently, this is not like a scenario where Texas decided to privatize roads and things went sideways. It's like a scenario where packages didn't get delivered on Christmas because COVID caused an unexpected spike in demand for package delivery, as well as an unexpected shortage of drivers for delivery vehicles.
- lmeyerov 6y ago
  I thought energy generation is still regional in practice -- loosely, the further it goes, the more expensive -- and private co's deciding to cheap out on weather protections showed the king has no clothes in this case? grid sounds nice and platform-y, but when you zoom in, similar to us telcos: not quite as stable and abundant as the lobbyists advertise for any given region when you look. as an intuition, a solar panel farm in some isolated arizona desert doesn't help folks in maine. conversely, as neither region has that many local suppliers, a few private businesses making rational personal $ decisions to not supply in critical scenarios will put all citizens at risk when those scenarios happebs. (written as someone living through periodic wildfires allowed through similar market optimism.)
  - rayiner 6y ago
fomine3 6y ago
Generally agree for fiber, water, power, road, etc. But I wonder is there any mobile network operator succeeded with this model.

eqvinox 6y ago

Road networks are a great example. Just assume the hypothetical position of a competitor. Where are you gonna build a competing road in, say, NYC? Each block only has 4 sides, and each of them already has a street. You could maybe compete on interstate highways or other long-area bits. Maybe. That's stretching it. Build a competing water supply network to each house? Another set of sewers? Electricity distribution? Hell no. IMHO all of these things should be communal property & development. The preconditions for free market are not met, it's not possible to compete; so the whole market equation falls apart. Hand the operation & maintenance out to some company or whatever, there it's possible to compete. But not the actual physical infrastructure.

ethanbond 6y ago
What about housing itself? There is only one building that can exist at 100 1st Ave, and its location is entirely unique/entirely monopolized.
- snidane 6y ago
  That's actually land monopoly problem. Ie. whoever came first to claim the land has exclusive use rights on it forever, or as long as his descendants go. It's yet another monopoly problem even though it doesn't look like it at first glance. Each house basically sits on a piece of mlonopoly for the parcel below it, preventing others from use. It's not much of a big deal in general, but in congested big cities, it is a problem. It's the cause of high rents (by Ricardo's law od rent). The solution is also a kind of monopoly tax - land value tax (LVT). You pay yearly percentage of the market value. Achieving almost optimal allocation instead of current hereditary one.
  - yourapostasy 6y ago
    > You pay yearly percentage of the market value. Establishing "market value" is the rub. Texas for example, does not make real estate sales prices public. This has a lot of perverse effects, one of which is deep-pocketed commercial interests have pummeled public assessors until commercial property is tacitly way undervalued for tax purposes, yet is openly sold for much more than the purported tax basis. I've heard of a system I found interesting (but alas, can no longer find a reference to link) to competitively establish tax basis on commercial real estate (I wouldn't want this on natural person owner-occupied residential). You claim whatever tax basis you want. It gets published in the open. Whoever can put up completely unencumbered cash over the barrel for that basis + 7% or more though, can purchase the property. And by unencumbered, I mean not even investor syndication. Real, natural person, outright first and only lien on the cash, absolutely no liens tolerated against the property tied directly or indirectly to the cash. Cash goes into government-controlled escrow. Current owner has one year to pay difference on one year's worth of new imputed tax basis represented by the escrowed cash, and continue from that point forward with the new basis. If the owner comes up with it, the bidder loses 6% of the cash (or whatever the real estate industry commission structure is at that time in that locality) to the local government as commission to facilitate the price discovery. Bidder can increase bid at any time by adding to escrow account, until either current owner "sells" to bidder (and escrow releases 100% to the current owner, no commission), or bidder walks. I haven't sat down to really pencil it out, but I'm sure if someone did they'd find a way to game such a system, since I figured it otherwise would have been put into use.
- eqvinox 6y ago
  The fact that it's unique/monopolized doesn't mean that competition is hampered. The building (or land parcel) at 100 1st Ave does not provide a service that is ubiquitously needed by almost the entire populace. If anything, this strengthens the argument. You can buy/rent/... a different parcel nearby, and this only affects you and your planned use of the building. But you can't switch to a different road network, and this affects everyone in their daily life. That said, I also agree with the sibling post that this is also a problem, just of a different kind.
- imtringued 6y ago
  Housing isn't the problem here but as you said correctly, it's the land ownership that is problematic. If we assume that house owners merely rent the land then it's perfectly fine to build a private housing market since housing needs can differ drastically between citizens. Some need a big house for a large family with lots of children, others only need a studio apartment. Some people want a home workshop or a home office. The market finds a satisfying solution for everyone. Land ownership is problematic because neighborhood improvements can be extracted via land ownership. The most effective policy against this extraction is to simply tax the land itself and thus turn it into a liability if the value of the land grows. Ideally, property taxes would be replaced with land value taxes. If land is a liability the only reason why people would purchase it is to improve the value of the land and make it available for productive uses like renting it out to a large number of people.
bko 6y ago
I don't know if NYC infrastructure is a good example. The second avenue subway was the most expensive subway in the world on a per mile basis. Considerably more expensive than Paris or Tokyo > The estimated cost of the Long Island Rail Road project, known as “East Side Access,” has ballooned to $12 billion, or nearly $3.5 billion for each new mile of track — seven times the average elsewhere in the world Similarly, the fare only covers around 50% of the operating costs which hardly seems fair for NY state taxpayers that pick up the expense despite receiving no benefit. The competing services for infra in NYC are cabs, car pools, private buses, bike rentals, scooters, subways. For getting into/out of the city, you have a number of bridges. For instance, I can take Lincoln tunnel, Holland Tunnel or ferry. It would be great to have more options and obviously its not easy to build tunnels, but private ferry and water cab services could be expanded [0] https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-construction-costs.html https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-... [1] https://www.bloomberg.com/news/articles/2019-03-14/what-s-a-fair-fare-transit-experts-talk-proper-pricing https://www.bloomberg.com/news/articles/2019-03-14/what-s-a-...
- rocqua 6y ago
  Its an interesting example, subways seem to have some minor room for competition, so the argument against privatization based on "there cannot be competition" does not quite apply. Even here though, there is a coordination problem to ensure various companies remain mutually compatible.
  - eqvinox 6y ago
    Competition on public transport is limited by the fact that you often need a cohesive network to get from A to B via C & D. If multiple companies cooperate on crossover ticketing and align their schedules, yes, it can work. Even more likely to work is a model where a central authority opens tenders for specific services, and transport companies can compete on that. Then again, I don't think it's viable to build subway tracks and tunnels to compete. Even if you have space under the earth, there may not be space for more stations, and good station locations are important too.
rini17 6y ago
Bore a tunnel!
m4rtink 6y ago
Seems to work fine in Japan for railways - there are three different rail connections from Tokyo to the Narita International Airport for example, each run by a different company (at the same time, we have 0 rail/subway connections to the Prague Airport:P). Same thing in many other places - in Kyoto there is big and nicely build station by JR and, Transport Tycon style 200 meters from it another big station by IIRC Kintetsu. Or in the middle of Tokyo, the Minami Senju station is effectively three station - One on the JR Joban line, one on Tokyo Metro and deep bellow another one on the Tsukuba express line. So its definitelydoable, even in the most densely populated of places, at least with rail. Also when you compare with places that have little to no competitionon the rail network you can clearly see the lack of service quality resulting from that. Well, if you get any service at all. :P
- hinoki 6y ago
  I just found this [0] paper about the development of the Tsukuba Express, one of the more recent train lines into central Tokyo. Land owners whose land is taken away are given new plots of land that are smaller, but closer to stations. These smaller plots are worth more than the original land because they are now near (future) train stations. [0] http://www.wctrs-society.com/wp-content/uploads/abstracts/rio/selected/2800.pdf http://www.wctrs-society.com/wp-content/uploads/abstracts/ri...
  - m4rtink 6y ago
    That's really clever idea, no wonder they can get it to work, thanks for the article! BTW, that's something else I noticed in Japan - train stations are almost always hubs of commercial and often also cultural activity - there are shops, hotels, good restaurants and often also galleries, event spaces, monuments and even the buildings themselves are often architectonic masterpieces (for example JR Kyoto station, just check it out!). This definitely helps with passenger numbers and keeps the whole thing sustainable not to mention profitable. In comparison Czech & Slovak railway stations (Prague, Brno, Bratislava) are often run down, dirty, fregvented by questionable people who aren't going to ride the trains and any shops or food places are cheap low quality ones. As a result one tries to spend as little as possible on these train station, let alone spend there any money for the few sub-par amenities available. It's really strange why it is like this, given the missed commercial opportunities, seems to be much better in other european countries (Vienna, Eindhoven, etc.).
mschuster91 6y ago
> Hand the operation & maintenance out to some company or whatever, there it's possible to compete. Oh no. Construction, operation and maintenance of electricity and other vital networks (water, gas, sewage, telecommunication) should be done by the government as a government agency with a quality of service mandate and not in form of a profit-oriented company no matter if government owned or private owned / publicly traded - because "competition" and/or a focus on costs is always going to end in price and wage dumping, cutting corners and sometimes in deathly disasters (California fires caused by cutting costs on maintenance, Flint water scandal, Texas infrastructure collaps due to un-hardened systems, ...).

hn_throwaway_99 6y ago

I wish our political systems would admit to this. So often I hear one side praying at the alter of free markets and deregulation, while the other condemns any profit making business as greedy. It just seems to me that free markets work absolutely fantastic in some areas and absolutely horrid in others (health care being probably the most notorious example).

imtringued 6y ago
Yes, this is important. Free markets are just a tool. If there is a more effective tool then you should use that instead. I think it is particularly telling that one side is constantly engaging in corporate welfare when they talk about deregulation. The other side is exhausted from faceless corporations screwing them over. What's needed is more people who are on both sides and understand the whole picture. The idea that only one side is right is simply wrong. You need a wide variety of strategies. There is this mindset that capitalism is always wrong when the mindset should be capitalism is not always right, which is a completely different perspective. However, I am really disappointed that people don't think about how to make the system work for themselves. Corporate abuse doesn't necessarily have to be the rule. The political environment could be shifted to favor workers instead and to a certain degree this would benefit everyone, not just one side.
x86_64Ubuntu 6y ago
I think you are citing a false equivalency. "Any profit = Greedy" isn't as tightly held on the Left as Free-Market principles are on the right. The proof is in the pudding, which states have lost production of a service utility due to adhering to "Any profit is greed!"?
- hn_throwaway_99 6y ago
  Well, I'll give you a specific example I was thinking of. Nearly every economist agrees that rent control is a bad idea if your overall goal is to make more affordable housing available to the largest possible population [1]. Yet I consistently see arguments in my left-leaning city against increasing density (e.g. with large multi family buildings) as "those greedy developers". Even the whole "Cancel Rent" protests during Covid often portrayed landlords as greedy (literal) rent seekers, despite the fact that some of the largest providers of affordable housing are small landlords at risk of losing their properties. The overall effect of this demonization of profit motive is a severe, and in some places catastrophic, housing crisis. [1] https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent...

rocqua 6y ago

> It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good. Its well understood by people who studied it well. However, there are still many pushes and arguments for privatisation that do not take these well understood facts into account.

clcaev 6y ago

While I agree with your sentiment, this was not exactly a private operator: this was a rural electric cooperative, that intentionally runs close to cost hile holding reasonable reserves. Its voting members were distribution cooperatives, whose voting members are individual households. This is about as sane as a platform ownership as one might have. This is not an obvious problem nor solution. As posted downstream, risk of polar vortex was even known and discussed by the general manager of the facility: https://www.energy.gov/sites/prod/files/2014/08/f18/karnei_statement_denver_qer.pdf https://www.energy.gov/sites/prod/files/2014/08/f18/karnei_s...

eqvinox 6y ago
The cooperative that went bankrupt isn't the platform that the argument applies to. In fact, you could create another cooperative without much trouble and start a parallel implementation of the same scheme. This really applies to the power grid itself. Even the power plants aren't covered by the argument, since if you have a reasonable grid, you can build another power plant of any kind you feel viable in some reasonably suitable place. [Ed. add.: the grid is actually the market. It facilitates the transactions between power plants and consumers.]
- clcaev 6y ago
  If this cooperative was not the platform, what exactly is the platform being discussed? Why do you could think one could recreate such a large cooperative like this without much trouble? Isn't the likely outcome of this bankruptcy a sale of assets to private equity: a situation that can probably never be reversed? What do you think this cooperative did if it was not facilitating the transactions between power plans and consumers? I'm confused by your assertion.
  - eqvinox 6y ago
    > If this cooperative was not the platform, what exactly is the platform being discussed? The power grid is the platform; I'm not sure how the original poster intended to apply the platform argument to the cooperative. As far as recreating the cooperative goes: it doesn't need to start large, and I'm reasonably sure it doesn't hold much in assets. My understanding is that this cooperative is simply a collective of buyers who "pool their shopping", so money flows in and back out. A new cooperative may need to work its way back up to bulk pricing, but that should be doable?

rayiner 6y ago

> It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good That’s not “well understood” at all. Folks don’t remember how dysfunctional and sclerotic nationalized industries were in the 1950s and 1960s. There is a reason nearly every developed country got rid of them.

disgruntledphd2 6y ago
Yeah, mostly driven by the ideas of Milton Friedman. Fortunately, we can see that 40 years later there were no unpleasant side effects from introducing markets into almost every business and service /s.
- tptacek 6y ago
  Working class people can now afford air travel, you can ship oranges between states without applying for a special trucking permit, almost 50% of Iowa's power generation is renewable, stock market trades went from 80c _per share_ to retail traders being paid to trade, and we still manage to make and enforce rules so that average gas mileage has gone from 13mpg to 26mpg. I don't agree with Rayiner about Texas, but I don't think you can wave your hands at 60s-70s deregulation and say "lol Milton Friedman". The deregulators were right about a lot of stuff.

cheph 6y ago

> It's actually well understood that privatisation for platform industries is bad, privatisation for businesses running on top of platforms is good. Cite? I have lived in two countries, one with privatized market based grid and have not yet had one power failure, one with nationalized grid and producers grid that had daily 8 hours power outages for weeks on end to the point where year on year per capita electricity usage (an important measure for development) was going down. Anecdotes are not data, but all I can say is that most definitely every nationalised grid does not run better than every privatized grid, and without some data to back your claim I am skeptical.

rayiner 6y ago

The "deregulated" energy industry is built around that exact principle you're talking about, both in the US and the EU. The "platform" is the grid, which delivers electricity from plants to homes and businesses. Because competition in this area is limited, these companies are regulated monopolies, whose infrastructure decisions and rates are closely supervised by a government energy board. These entities work as part of a regional transmission organization, a highly regulated entity that ensures stability of the grid as a whole (https://en.wikipedia.org/wiki/Regional_transmission_organization_(North_America) https://en.wikipedia.org/wiki/Regional_transmission_organiza...). Generators and users of electricity operated on top of that platform. Generation is a competitive market--many entities can be delivering power into the grid, and the product is fungible. Users don't care where the electricity comes from, just about the price. Electricity generation is therefore quite suitable for market mechanisms. What happened in Texas was not an example of a privatized "platform" failing. The platform (the grid) was fine. Instead, adverse weather events caused a shortage of the product (electricity) running on top of the platform. Put differently, this is not like a scenario where Texas decided to privatize roads and things went sideways. It's like a scenario where packages didn't get delivered on Christmas because COVID caused an unexpected spike in demand for package delivery, as well as an unexpected shortage of drivers for delivery vehicles.

lmeyerov 6y ago
I thought energy generation is still regional in practice -- loosely, the further it goes, the more expensive -- and private co's deciding to cheap out on weather protections showed the king has no clothes in this case? grid sounds nice and platform-y, but when you zoom in, similar to us telcos: not quite as stable and abundant as the lobbyists advertise for any given region when you look. as an intuition, a solar panel farm in some isolated arizona desert doesn't help folks in maine. conversely, as neither region has that many local suppliers, a few private businesses making rational personal $ decisions to not supply in critical scenarios will put all citizens at risk when those scenarios happebs. (written as someone living through periodic wildfires allowed through similar market optimism.)
- rayiner 6y ago

fomine3 6y ago

Generally agree for fiber, water, power, road, etc. But I wonder is there any mobile network operator succeeded with this model.