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IMHO, the USA has made the mistake of privatizing too much of its crucial infrastructure, ignoring that certain things are inherently monopolistic in nature and
by qalmakka 5y ago
IMHO, the USA has made the mistake of privatizing too much of its crucial infrastructure, ignoring that certain things are inherently monopolistic in nature and do not benefit at all from being in private hands.
Privatizing infrastructure is extremely positive if there's any chance for competition to arise - for instance, Italy has moved from a monopolistic state phone company to a well regulated and open free market, which has caused a boom of competing companies that has massively driven prices down. I now pay €27/mo for unlimited 1Gbps/300Mbps fiber and €7/mo for my phone plan with 50 GB of data, unlimited calls and unlimited SMS.
This is offset by the sad state of our highway system, which has been handed off to private companies a long time ago. There is obviously no way to create competition in highways (what are you going to do, build a cheaper highway next to the already existing one?), so the main company (API) has been neglecting mantaining infrastructures up to the point that a few bridges have collapsed, killing people and creating huge preventable disasters. Tolls are also crazy expensive, often amounting to half the cost of a road trip (and here petrol costs €1.50 per litre).
There's no incentive for a private company to invest a single cent as soon as it becomes a monopoly, it is something that has been known since the dawn of man.
- silviot 5y agoCompetition is not only ineffective in monopolistic markets. Also oligopolic markets are very inefficient. In Italy's example the price you now pay for your mobile plan (7 €/month for 50 GB) was made possible by Iliad, a new ISP that broke the Italian oligopoly and forced all competitors to bring prices down (or better data caps up) ten fold in the span of a few months.
- alanfranz 5y agoNo, not tenfold. Iliad entered a competitive market, but my pre-iliad price was around 10 eur/month, albeit with smaller data allowance. Iliad helped lowering prices by offering a lower end service.
- girvo 5y agoAustralia has followed America in making that mistake too, sadly. Other countries as well I assume. The politicians that push this, seem to make sure it’s their cronies that are the ones that get to make billions off said privatisation, too.
- capableweb 5y agoOn the other hand you have countries like Norway, where parts of the profits earned from oil goes into the "Oil Fund" (https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Norway https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...), currently the "world’s largest sovereign wealth fund". If Norway had failure like the US, they could easily offset the costs while making things still work as usual for a while, as they are thinking ahead.
- simfoo 5y agoNot just in the US. In Germany economic-liberal politicians keep pushing for privatized infrastructure all the time, arguing it would be better managed by a private company. This goes as far as privatizing toll collection on public streets. Unsurprisingly this always leads to badly maintained infrastructure and higher costs in the end.