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Choice is a necessary condition for free markets. There is little to no choice in water, roads, phone lines, rail transport, etc. I still don't understand why t

Choice is a necessary condition for free markets. There is little to no choice in water, roads, phone lines, rail transport, etc. I still don't understand why the UK went down this path.

cmrdporcupine 3y ago
Almost the entire western world did, starting in the early 90s, and those of us who tried to stop it at the time were derided as clueless naive economic illiterates (and still are.) And the west pushed this Privatize All The Things model into the former Soviet bloc, too, where mass brutal privatization of the huge portfolio of state assets created the kleptocrat economic they have there now. Nobody ever denied that the free market is efficient. The question is: efficient at what?
- emptyfile 3y ago
  No, the west didn't "push" eastern European kleptocrats into stealing everything in the privatisation drives, they didn't need any outside encouraging. Its really disconcerning how many people simply assume that small nations have no agency whatsoever. It's this kind of thinking that births ideas about Russian/American zones of influence around Europe and similar very dangerous antiquated nonsense. It need to die.
  - mantas 3y ago
    Oh, we did get (and still do get) lots of „consultants“ from West advising us to privatise all the things. Some paid by West governments, some paid by private funds (= big businesses). As for zones of influence... It is very real. That's why we jumped into NATO at first opportunity. A lot of companies were privatised looking for capital from, e.g., specifically USA, to make sure they have more interest in our survival. And any Russian investment is seen as a possible risk.
- krapp 3y ago
  >Nobody ever denied that the free market is efficient. The question is: efficient at what? Moving control of capital to capitalists. That's what it does. That's all it does. That's all it's ever been capable of doing.
bell-cot 3y ago
> I still don't understand... https://en.wikipedia.org/wiki/Thatcherism https://en.wikipedia.org/wiki/Thatcherism Or talk to a few older folks about Britain in the 1970's and 1980's.
- refurb 3y ago
  The UK was going into the dumps before Thatcher even came along. That's why she was elected. I couldn't imagine how bad it would be if Labour hadn't been kicked out and the far-left economic approach hadn't been abandoned.
  - bell-cot 3y ago
    True-ish. But "2 + 2 = 3 is false" is not an argument for "2 + 2 = 5 is true". (FWIW - I've seen arguments, in a broad range of periodicals, to the effect that the current generation of British politicians - if not the entire British ruling class - are dysfunctional sh*t, and the UK's future looks pretty bleak.)
  - gadders 3y ago
    I think people don't remember what services were like in those days - the weeks you'd wait for a phone installation etc.
  - odiroot 3y ago
    True for the railways, not sure about the rest.
- jablala 3y ago
  Good ol', "Know the cost of everything, but the value of nothing".
dazc 3y ago
Public utility companies were operating very inefficiently at the time, the motives behind privation obviously had a political element but there was some good intention behind it. In hindsight, much stricter regulation regarding reinvestment of profits would have been a good idea.
- xmcqdpt2 3y ago
  The thing is, by the time you have made the regulation strict enough to avoid any and all tricks Goldman-Sachs and friends can come up with, you've basically nationalized the companies.
lucraft 3y ago
One reason was to increase investment. In water's case the infrastructure had been under-invested in under public ownership for decades, due to it always being a low priority from a political point of view. The regulatory structure of the privatized industry says the water companies can only make profits if they make capital investments, and so the amount invested in water infrastructure in the UK (particularly England) has duly gone up a lot since privatization and has been comparable or higher to other nations since. From this point of view, it's less about choice and markets as a way to structure the regulation and ownership so that capital investment actually happens.
- swores 3y ago
  > One reason was to increase investment. That's such a ridiculous argument though. Privatisation increasing investment means one of two things, either the investors are getting ripped off or they're going to get a profitable return on their investment. Assuming no government would admit to the first and no investor would intentionally invest in the first, let's assume the second is the plan. In which case, if the investment will yield profits, there's no reason the government shouldn't make the investment themselves so that the public get the profits (as well as the benefits from increased investment at the start).

Choice is a necessary condition for free markets. There is little to no choice in water, roads, phone lines, rail transport, etc. I still don't understand why the UK went down this path.

cmrdporcupine 3y ago

Almost the entire western world did, starting in the early 90s, and those of us who tried to stop it at the time were derided as clueless naive economic illiterates (and still are.) And the west pushed this Privatize All The Things model into the former Soviet bloc, too, where mass brutal privatization of the huge portfolio of state assets created the kleptocrat economic they have there now. Nobody ever denied that the free market is efficient. The question is: efficient at what?

emptyfile 3y ago
No, the west didn't "push" eastern European kleptocrats into stealing everything in the privatisation drives, they didn't need any outside encouraging. Its really disconcerning how many people simply assume that small nations have no agency whatsoever. It's this kind of thinking that births ideas about Russian/American zones of influence around Europe and similar very dangerous antiquated nonsense. It need to die.
- mantas 3y ago
  Oh, we did get (and still do get) lots of „consultants“ from West advising us to privatise all the things. Some paid by West governments, some paid by private funds (= big businesses). As for zones of influence... It is very real. That's why we jumped into NATO at first opportunity. A lot of companies were privatised looking for capital from, e.g., specifically USA, to make sure they have more interest in our survival. And any Russian investment is seen as a possible risk.
krapp 3y ago
>Nobody ever denied that the free market is efficient. The question is: efficient at what? Moving control of capital to capitalists. That's what it does. That's all it does. That's all it's ever been capable of doing.

bell-cot 3y ago

> I still don't understand... https://en.wikipedia.org/wiki/Thatcherism https://en.wikipedia.org/wiki/Thatcherism Or talk to a few older folks about Britain in the 1970's and 1980's.

refurb 3y ago
The UK was going into the dumps before Thatcher even came along. That's why she was elected. I couldn't imagine how bad it would be if Labour hadn't been kicked out and the far-left economic approach hadn't been abandoned.
- bell-cot 3y ago
  True-ish. But "2 + 2 = 3 is false" is not an argument for "2 + 2 = 5 is true". (FWIW - I've seen arguments, in a broad range of periodicals, to the effect that the current generation of British politicians - if not the entire British ruling class - are dysfunctional sh*t, and the UK's future looks pretty bleak.)
- gadders 3y ago
  I think people don't remember what services were like in those days - the weeks you'd wait for a phone installation etc.
- odiroot 3y ago
  True for the railways, not sure about the rest.
jablala 3y ago
Good ol', "Know the cost of everything, but the value of nothing".

dazc 3y ago

Public utility companies were operating very inefficiently at the time, the motives behind privation obviously had a political element but there was some good intention behind it. In hindsight, much stricter regulation regarding reinvestment of profits would have been a good idea.

xmcqdpt2 3y ago
The thing is, by the time you have made the regulation strict enough to avoid any and all tricks Goldman-Sachs and friends can come up with, you've basically nationalized the companies.

lucraft 3y ago

One reason was to increase investment. In water's case the infrastructure had been under-invested in under public ownership for decades, due to it always being a low priority from a political point of view. The regulatory structure of the privatized industry says the water companies can only make profits if they make capital investments, and so the amount invested in water infrastructure in the UK (particularly England) has duly gone up a lot since privatization and has been comparable or higher to other nations since. From this point of view, it's less about choice and markets as a way to structure the regulation and ownership so that capital investment actually happens.

swores 3y ago
> One reason was to increase investment. That's such a ridiculous argument though. Privatisation increasing investment means one of two things, either the investors are getting ripped off or they're going to get a profitable return on their investment. Assuming no government would admit to the first and no investor would intentionally invest in the first, let's assume the second is the plan. In which case, if the investment will yield profits, there's no reason the government shouldn't make the investment themselves so that the public get the profits (as well as the benefits from increased investment at the start).