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Weak oversight with nationalisation is even more disastrous. With a profit motive, the utility is at least incentivised to deliver the service so that they can

by debok 3y ago

Weak oversight with nationalisation is even more disastrous. With a profit motive, the utility is at least incentivised to deliver the service so that they can get paid. If you have government-owned utlity with weak oversight, there is no incentive to even deliver the service. Look at what is happening with South Africa's power utility (and other State Owned Enterprises like their post office and national airline) as a great example of what happens to a public enterprise with no oversight.

vidarh 3y ago
With nationalisation you can at least vote out the people who mismanage it. Privatisation makes this harder because you run into all kinds of issues with taking them over without paying market rates that acts as a massive barrier. E.g. this was a major factor in the arguments against Labour's 2017 and 2019 election manifestos in the UK, because the costs of buying out the private providers vs. the drastic risk to the economy of sending the signal that UK companies are at risk of uncompensated takeovers by the government were both used to hammer them with. But yes, you need strong oversight either way. > With a profit motive, the utility is at least incentivised to deliver the service so that they can get paid. I don't really agree with this. Semi-monopolised privatised providers only care to deliver service to the level where they maximise their return on investment. This is why we've seen multiple train operating companies collapse in the UK, because they were low capital to set up and bid on terms designed to let their owners extract as much as possible, without care for whether or not they'd remain viable, because until Virgin and Stagecoach faced outright bans on participating in bids for some new franchises there appeared to be no consequence. Worst case you'd just start a new one. It's also why we're seeing Thames Water fail to address a network of pipes that leaks an astonishing proportion of the supply because while you're right in as much as they've had to deliver service to consumer, they've not been incentivised to deliver the service to society as a whole that they were tasked with, which is broader than delivering water to consumers and includes stewardship of the capacity. A pure profit motive for a monopoly resource can often descend into looking for ways to extract maximal margins that are in the long run wildly detrimental both to customers and to society as a whole.
ClumsyPilot 3y ago
> With a profit motive, the utility is at least incentivised to deliver the service so that they can get paid. No they are not! In Britain rail companies were bailed out during Covid. Railways that had zero passengers reported profits and paid dividends! > Look at what is happening with South Africa's power utility South african society has various issues that are not applicable in UK/france/etc. Same goes for Russia. If suddenly French government does the kind fo shit Russian government does, half of Paris will be on fire before you can spell Baguette
kranke155 3y ago
Let’s take a look at nearly failed state as a counter example is pretty incredible. There are plenty of other examples you can pick vs SA.

by debok 3y ago

vidarh 3y ago

With nationalisation you can at least vote out the people who mismanage it. Privatisation makes this harder because you run into all kinds of issues with taking them over without paying market rates that acts as a massive barrier. E.g. this was a major factor in the arguments against Labour's 2017 and 2019 election manifestos in the UK, because the costs of buying out the private providers vs. the drastic risk to the economy of sending the signal that UK companies are at risk of uncompensated takeovers by the government were both used to hammer them with. But yes, you need strong oversight either way. > With a profit motive, the utility is at least incentivised to deliver the service so that they can get paid. I don't really agree with this. Semi-monopolised privatised providers only care to deliver service to the level where they maximise their return on investment. This is why we've seen multiple train operating companies collapse in the UK, because they were low capital to set up and bid on terms designed to let their owners extract as much as possible, without care for whether or not they'd remain viable, because until Virgin and Stagecoach faced outright bans on participating in bids for some new franchises there appeared to be no consequence. Worst case you'd just start a new one. It's also why we're seeing Thames Water fail to address a network of pipes that leaks an astonishing proportion of the supply because while you're right in as much as they've had to deliver service to consumer, they've not been incentivised to deliver the service to society as a whole that they were tasked with, which is broader than delivering water to consumers and includes stewardship of the capacity. A pure profit motive for a monopoly resource can often descend into looking for ways to extract maximal margins that are in the long run wildly detrimental both to customers and to society as a whole.

ClumsyPilot 3y ago

> With a profit motive, the utility is at least incentivised to deliver the service so that they can get paid. No they are not! In Britain rail companies were bailed out during Covid. Railways that had zero passengers reported profits and paid dividends! > Look at what is happening with South Africa's power utility South african society has various issues that are not applicable in UK/france/etc. Same goes for Russia. If suddenly French government does the kind fo shit Russian government does, half of Paris will be on fire before you can spell Baguette

kranke155 3y ago

Let’s take a look at nearly failed state as a counter example is pretty incredible. There are plenty of other examples you can pick vs SA.