7 ms·

What is an example of a service which provides a lot of value but is not/ could not be profitable? There are public services we choose to run at a loss, like t

What is an example of a service which provides a lot of value but is not/ could not be profitable? There are public services we choose to run at a loss, like the postal service or public transit. These services definitely could raise their prices in order to turn a profit (they provide enough value that people would still pay the higher prices). We choose to run them at a loss as a sort of wealth redistribution program, where the taxes from the rich subsidize the cost of these services for the poor.

skyyler 3y ago
If I'm ever convicted of a crime, I sure hope the courtroom where my trial takes place isn't considered to be "profitable".
unethical_ban 3y ago
If we ran the post office or certain public transit at a profit, they wouldn't be the services they are today. You admit this. Post office wouldn't run daily service 6 days a week. They wouldn't run last mile to millions of people. Public transit wouldn't serve unprofitable communities. So no, they couldn't operate the same way. Hand-waving that away because it is wealth redistribution is invalid. Profit is not a prerequisite of value. Profit should not be the driving force of every mechanism in society. Caveat, not every public service which costs money is able to cost too much. Rejecting the profit motive is not equal to rejecting a bounded budget for programs.
wongarsu 3y ago
Running public services "at a loss" (= tax funded) is the entire premise of a government. Some as wealth redistribution schemes, but most of them because society as a whole is better off if we do so. If we only put out fires if the property owner has paid their fire fighting fees the fire might uncontrollably spread to other properties, so we are better off just having a public fire fighting service. Every trucking company paying for their own armed escorts is much more expensive than taxes financing a police force that ensures safe travel. Transportation infrastructure, no matter if that's streets, subways or airports, promotes trade and efficient resource use by allowing people and resources to get to places more easily.
p1necone 3y ago
Public transport is not run at a loss as a form of wealth distribution, it's run at a loss because the impact on the economy/society via enabling people to move around more freely is not captured via ticket prices. It's no different from building roads or sewage systems - you don't try to directly capture the building cost from the people using them because the higher order benefits from having a healthy, growing, functional society (both in the general wellbeing of the population, and in tax revenue) outweigh that.

skyyler 3y ago

If I'm ever convicted of a crime, I sure hope the courtroom where my trial takes place isn't considered to be "profitable".

unethical_ban 3y ago

If we ran the post office or certain public transit at a profit, they wouldn't be the services they are today. You admit this. Post office wouldn't run daily service 6 days a week. They wouldn't run last mile to millions of people. Public transit wouldn't serve unprofitable communities. So no, they couldn't operate the same way. Hand-waving that away because it is wealth redistribution is invalid. Profit is not a prerequisite of value. Profit should not be the driving force of every mechanism in society. Caveat, not every public service which costs money is able to cost too much. Rejecting the profit motive is not equal to rejecting a bounded budget for programs.

wongarsu 3y ago

Running public services "at a loss" (= tax funded) is the entire premise of a government. Some as wealth redistribution schemes, but most of them because society as a whole is better off if we do so. If we only put out fires if the property owner has paid their fire fighting fees the fire might uncontrollably spread to other properties, so we are better off just having a public fire fighting service. Every trucking company paying for their own armed escorts is much more expensive than taxes financing a police force that ensures safe travel. Transportation infrastructure, no matter if that's streets, subways or airports, promotes trade and efficient resource use by allowing people and resources to get to places more easily.

p1necone 3y ago

Public transport is not run at a loss as a form of wealth distribution, it's run at a loss because the impact on the economy/society via enabling people to move around more freely is not captured via ticket prices. It's no different from building roads or sewage systems - you don't try to directly capture the building cost from the people using them because the higher order benefits from having a healthy, growing, functional society (both in the general wellbeing of the population, and in tax revenue) outweigh that.