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When profit becomes the main motivator, quality of services always seem to drop. I get that the government can be annoying, but I feel like there are many serv
by tnel77 3y ago
When profit becomes the main motivator, quality of services always seem to drop.
I get that the government can be annoying, but I feel like there are many services that we should aim to provide as a society where profit isn’t the goal. For example, you don’t need to price gouge people for electricity, but charging enough to cover expenses and future infrastructure upgrades is fine and to be expected. No costly CEO or shareholder overhead thrown in there.
- PartiallyTyped 3y agoAdd education to that too. It should be pretty obvious to everyone that quality education is a matter of national security but here we are, with people proudly uneducated, who - in their wilful ignorance - harm others. Thank you to everyone who flagged me and now I can't respond or comment in this thread <3
- brutusborn 3y agoI think education is actually case where the free market would solve a lot of issues. Making schools compete for students would incentivise schools to provide a more valuable education.
- jamil7 3y agoYou end up pricing people out of the best possible education unless you regulate heavily, at which point you may as well have state-run education.
- em500 3y agoAs opposed to state run education where the best possible education is available to everybody? Is that what we see in public education?
- eertami 3y agoWe do see this in Switzerland, Finland, etc. But this is due to a competent Department of Education, which simply doesn't exist in the UK. Infact the UK DoE isn't even just incompetent - it is quite clearly maliciously sabotaging education, there is no other logical conclusion for the farcical policies that are in use.
- brutusborn 3y agoWhat kind of UK policies are you referring to?
- debok 3y agoOr you have state-run education as another competitor. Or you can have the state sponsor promising but poor students. You can even incentivise private enterprises to give bursaries to promising but poor students.
- brutusborn 3y agoYou could use a voucher system where everyone pays nothing although I don’t think that would be optimal.
- PartiallyTyped 3y agoYou want to provide quality education to __ALL__ of the population. I don't mean university level education. I mean real world education, such as how their body works, how to navigate society, critical thinking, cognitive biases, how probability works. If humanity is to survive we need to move away from empiricism and dogma, we need to move towards an educational system where kids grow into rational adults.
- brutusborn 3y agoI agree, except for the move away from empiricism part, empiricism can be quite quite useful.
- phatfish 3y agoPublic schools complete for government funding, the better the school the more funding they should receive to educate as many children as possible. The competition should be the grades attained by the students or their entry into higher education/vocational training. Not value on the stock market or the directors total comp. Measuring pupil attainment is harder than comparing share prices, but it's certainly better for society.
- deleted 3y ago[deleted]
- tnel77 3y agoWho wants the “bad” students? Bad could be from a behavioral or academic standpoint? Don’t they deserve a chance at an education as well?
- brutusborn 3y agoAs long as ‘bad’ students have a voucher, you could ensure that public schools take them.
- scrlk 3y agoCynical take: they don't want an overeducated population as that poses a mortal threat to the system.
- PartiallyTyped 3y agoCould you elaborate? There are at least 2 interpretations of “over-educated” people being a threat to “the system”. Overeducated as in having university degrees and being “highly skilled” which demands imports of “unskilled” workers which causes integration problems. Or overeducated as in understanding how “the system” works and are aware of the class war they were thrown in since their conception, how the system pits the working class against each other while the ruling class enjoys a paradise.
- scrlk 3y agoThe second interpretation of my comment is what I was attempting to allude to. I am reminded of this particular quote from Orwell's 1984: "Until they become conscious they will never rebel, and until after they have rebelled they cannot become conscious."
- PartiallyTyped 3y agoSounds like Orwell was paraphrasing Plato. Funny, effectively the same issues 2500 years later...
- jack_riminton 3y agoExactly. Fake competition in utilities and services makes no sense. The "privatisation" of the UK railways is a prime example. I use quotation marks because it's just privatising the profits and socialising the losses. "from March 2020 to February this year, the Government paid out more than £7.3 billion in operational support to private train operators" - https://bylinetimes.com/2021/05/18/7-billion-covid-bailout-for-private-train-firms-includes-70-million-management-fees https://bylinetimes.com/2021/05/18/7-billion-covid-bailout-f...
- krona 3y agoThe railway infra is run by a Non-departmental public body; it's not privatised. Its customers are rail companies which run the trains.
- mnd999 3y agoIt was, rail track was a private company. They had to roll that one back because trains kept crashing.
- bombolo 3y agoJust overcommitting the tracks to maximize profit :)
- kaashif 3y agoBut is the most economically efficient number of deaths on trains really zero? If a million people get to work a few minutes faster every day for 40 years, is that worth one life? No, but I have actually heard this argument before and regard it as unhinged.
- mnd999 3y agoFight club.
- vidarh 3y agoThe train operating companies are a particularly bad failure because like e.g. the water companies they get to channel the revenue but unlike the water companies they don't own the capital intensive bits but bid on how much they'll return during the franchise period. As a result, the capital need to start a train operating company is tiny in proportion the revenue flow, and their returns look modest related to revenue, but the return on investment looks decidedly less than modest. And so their parent companies can afford to risk outright failure of the franchise because the risk reward were tilted heavily in their favour even before the covid bailouts. The incentives for them are really perverse.
- vidarh 3y agoWhile I agree with you entirely, I'll propose an adjustment to the reason for this problem in the case of the UK: When the government is ideologically opposed to ensuring sufficient public oversight, quality of services drops. The problem in the UK is not merely privatisation, but privatisation in a way that privatises profits, often socialises losses, and that substitutes dealing with crises after the fact over strong oversight during, because of a string of governments that have not just been opposed to government ownership, but that has been opposed to regulation. You could strip away the profit motive by making these all non-profit stakeholder led organisations of some sort, and you'd still have a massive problem because of the lack of proper oversight. Fix the oversight issue and maybe some degree of privatisation would work (though I agree many of these services should still not be operated with a profit motive), but the double whammy of weak oversight and privatisation is disastrous.
- scrlk 3y agoDieter Helm recently wrote an article about scrapping the current water privatisation model, without re-nationalisation: https://dieterhelm.co.uk/regulation-utilities-infrastructure/time-to-pull-the-plug-on-the-water-privatisation-model/ https://dieterhelm.co.uk/regulation-utilities-infrastructure...
- anonymousDan 3y agoThe problem is that even if one government were able to fix the oversight issue, its hard to see how subsequent governments can be prevented from ripping up the oversight (e.g. under the rubric of 'removing red tape'). Even if you look at the most likely incoming government, they are reluctant to get rid of the water companies due to cost. Perhaps what is needed is some mechanism whereby the threat of re-nationalisation can be enforced at minimum cost to the taxpayer.
- vidarh 3y agoIt is a problem largely created by granting them property rights instead of franchises or operating agreements. In a democracy we can never remove the risk of the next government messing it up, but as long as they grant time limited or restricted contracts the opportunity for reversal is there. Which, incidentally, the cynic in me would suggest is the reason for why e.g. the water privatisation was done the way it was. Compare to the train privatisation, where after the failure of Railtrack brought the infra itself back under government control, time limited franchises means that the government can at least regain control over time at low cost by simply ending the issuing of new franchises (and where the government have operated many franchises for various lengths of time due to outright failures of the franchise-holders to meet their obligations). You can even see it as allowing for shifting governments to change their mind without it becoming big all or nothing decisions (though the original franchise model is utterly messed up in how it aligns the incentives). To be clear: I think the rail privatisation was also an utter disaster, but it's current incarnation is not nearly as bad with the water companies - largely, incidentally, because large early failures like with Railtrack ended up with the undoing of some of the worst parts of it. It's still shit, though.
- neximo64 3y agoThe other side of that coin is, with quality as the main motivator, the prices go up. There's no free ride either way through organising things differently, its a choice between quality or price (as opposed to getting quality at a cheaper price). The other issue of course is in a public setting, there is no motive for efficiency.
- eigenket 3y ago> Since then the sector has accumulated £53bn in debt while distributing £72bn to shareholders, the majority of whom are international investors Theres actually a pretty huge amount of "free ride" sitting there waiting to be ridden.
- neximo64 3y agoOne of the assumptions that may be being made in this statement is funds can be borrowed for free, in a debt or equity setting. Whoever is lending/providing those funds does expect something in return. Even a government that borrows, needs to pay something back with interest. And an investment by the way of shares the government makes needs something back roughly matching the interest rate too. I don't really see an argument where a public setting is any more beneficial from what you're saying, if the international investor was the the treasury, it would still want something back by shareholder returns.
- vidarh 3y agoA counter: The NHS is one of the cheapest universal healthcare systems among comparable developed countries. It's run on an utter shoestring. In other words: You can set budgets and force your providers to do the best they can within them. No matter where you set them, people will be unhappy, but it's not like setting quality as the main motivator means you need to give the provider free reign to spend however much it wants. PPP adjusted total UK healthcare spending is less than half of the US, despite a significant private sector acting as an outlet for a proportion of the situations when people are unhappy with the NHS. Incidentally US public money per capita going towards healthcare exceeds the per capita cost of the NHS (whether nominal or PPP adjusted). The low amounts flowing to private providers in the UK can be seen as a demonstration that most people considers the NHS service good enough - while many would not be able to afford going private, the proportion who could if it mattered is certainly far higher than the current takeup.
- phatfish 3y agoCorporations want the pubic to think that governments are incapable of running services for them. Then the public service can be asset striped and run on a shoestring. When the private owners get called out for providing a bad service their veiled argument is "well at least the government isn't running it, that would be even worse!". Obviously there are cases where the government fails and that can't be given a free pass, but this is too often assumed to be the outcome and the only solution is privatisation. Even in the UK where there is the feeling that government is totally incompetent the NHS keeps providing at least a baseline level of medical care expected from a western country. This is despite being sabotaged at every opportunity over the last 12 years by the Tory party.
- iraqmtpizza 3y ago(not) sorry to say that when a company has a strong ethos of providing great service it is primarily motivated by profit. even if it is known ahead of time that the profit won't materialize for decades. you must mean immediate profit
- waihtis 3y agoSo why not a private non-profit instead of government?
- deleted 3y ago[deleted]
- HWR_14 3y agoWhy prefer a private non-profit to the government? I like non-profits in some cases. They're great at funneling money into specific causes that people care about. Especially small ones (a local theater group is the go to example) or politically charged ones. But "the trains running" doesn't seem like one of those. Why not have the government oversee it?
- 0xy 3y agoThe entire premise of your comment is false, since energy retailer margins are sub 5%. Considering the UK government has directly been engaged in numerous schemes which have dramatically increased the wholesale price of energy, a 5% cost saving won't even help anyone. Prices are rising by 4x that yearly with the money printers and war machine turned up to 11.
- tnel77 3y agoI can’t speak to the UK directly since I live in the USA, but all of my experiences with privatization of services has been awful. I lived in one city that handled trash and recycling as a part of your property taxes. It was a good service. No complaints. Where I live now, you have to find your own trash and recycling service. Prices are higher and the service is far worse.
- VoodooJuJu 3y agoCuts both ways - people in general are largely motivated by profit, not just corporations and their executives. Do people prefer to buy the package of ground beef that's $9/lb or the one that's $5/lb? When faced with a choice, most people want the cheaper one, disregarding the harmful externalities that make the lower price possible. Nevermind that the more expensive one is better for their bodies and the environment. Most people and corporations are married by the same motivation: to make and save as much money as possible with no regard for the harmful effects. If profit-seeking consumers shift their motivations, profit-seeking corporations will naturally starve, and something higher than profits will prevail. But people won't change. Nobody is going to vote for the government to ban the cheaper but more harmful beef farm.
- ModernMech 3y ago> Nobody is going to vote for the government to ban the cheaper but more harmful beef farm. What do you think the FDA is, but people having voted for more expensive but healthier beef? Like, as bad as you think it is now, imagine how much worse it would be without food safety regulations.