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>1. The downside of private sector investments is that they will only invest in projects with the most lucrative returns, which comes at the cost of serving fur

by jdasdf 4y ago

>1. The downside of private sector investments is that they will only invest in projects with the most lucrative returns, which comes at the cost of serving further and smaller communities, more decentralized communities, and other less-profitable sectors, which are in the broader long-term interests of the whole society to maintain (despite being unprofitable). I dispute your assertion that those things are the broader long term interests of the whole society. Their unprofitability is factual undeniable evidence that they are in fact unwanted "services" who are having resources poured in to them not due to their own merits but due to political decisions unrelated to their merits. I want to be very clear here, because there are many people who seem to be under the misconception that profitability is something bad. It is not. Profitability is literally a measure of how much value a given thing is providing to society. There is a 1 to 1 relationship between profitability and societal and individual benefit. When you say "Public services don't need to be profitable" or express similar ideas, what you are actually saying is "Public services don't need to provide societal benefit".

taffer 4y ago
Except externalities are a thing.[1] Externalities are positive or negative impacts on society that do not accrue to those who cause them. Typically, rail transport leads to an increase in land prices and rents, but these additional profits are not recovered through fares, but fall into the hands of landowners. For this reason, railroads have historically been funded through land grants. For the same reason, most infrastructure is government-funded, such as airports, roads, or schools. [1] https://en.wikipedia.org/wiki/Externality https://en.wikipedia.org/wiki/Externality
Ajedi32 4y ago
I agree, and I think that's a really insightful way of framing things, though there is a caveat: Often government services are of the sort whose value would be rather difficult to capture commercially. For example, while I doubt many would dispute that having an active police force provides a significant societal benefit, actually capturing that value via a market-based system would be exceedingly difficult. (E.g. You just caught and jailed a murderer. Now, who do you bill for that?) Thankfully, trains don't suffer from that problem; their value is extremely easy to capture (and thus quantify) via a ticketing system. But I felt I should point out that it isn't always so easy in the general case.

by jdasdf 4y ago

taffer 4y ago

Except externalities are a thing.[1] Externalities are positive or negative impacts on society that do not accrue to those who cause them. Typically, rail transport leads to an increase in land prices and rents, but these additional profits are not recovered through fares, but fall into the hands of landowners. For this reason, railroads have historically been funded through land grants. For the same reason, most infrastructure is government-funded, such as airports, roads, or schools. [1] https://en.wikipedia.org/wiki/Externality https://en.wikipedia.org/wiki/Externality

Ajedi32 4y ago

I agree, and I think that's a really insightful way of framing things, though there is a caveat: Often government services are of the sort whose value would be rather difficult to capture commercially. For example, while I doubt many would dispute that having an active police force provides a significant societal benefit, actually capturing that value via a market-based system would be exceedingly difficult. (E.g. You just caught and jailed a murderer. Now, who do you bill for that?) Thankfully, trains don't suffer from that problem; their value is extremely easy to capture (and thus quantify) via a ticketing system. But I felt I should point out that it isn't always so easy in the general case.