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The utility sector has a 10% profit margin. Hardly an example of a monopoly abusing its position. If utilities were nationalized the maximum possible gain is

The utility sector has a 10% profit margin. Hardly an example of a monopoly abusing its position. If utilities were nationalized the maximum possible gain is 10% and the potential loss is the unlimited capacity of the government to waste resources.

nothercastle 2y ago
Not true the maximum losses a private utility can generate for the public are unlimited because the losses always get nationalized. The 10% margin is after C suite grift so it’s likely more than 10% you can save. Plus if you are on the hook for losses might as well take the 10%
- fallingknife 2y ago
  It will be paid out of tax money either way. To save me money the government would have to either: 1. run the operation at least 90% as cost effectively 2. be less likely to make major costly mistakes From my experience with government the probability of 1 is 0% and the probability of 2 is minimal. At least when PG&E caused those wildfires, their execs were fired and had to pay $100 million of their own personal money in damages. This doesn't happen when government employees screw up. They don't even lose their jobs.
  - nothercastle 2y ago
    The fact that they had 100 mil to pay speaks of the excesses salaries were paying them. PGE isn’t really run any more efficiently than a government institution, at least with government there is some measure of transparency, though accountability is lacking for both situations. Capitalism doesn’t drive efficiency when there is no competition, in fact the incentive for PGE is to drive up actual costs and then raise prices to maintain 10%. The more expensive and inefficient they are the larger the 10% bucket is.
    - fallingknife 2y ago
      That 100 mil is 0.4% of annual revenue, and that isn't one year's pay, it's a lifetime of accumulation. There were 20 people in the settlement averaging close to 6 mil each (it was actually 117 mil total). That's really not that high of a net worth for people running an enormous power company. Pay peanuts, get monkeys. As for transparency, audited financial statements of public companies are infinitely more information than you will ever get about the finances of a government bureaucracy. And their only incentive is to use up their budget so they can ask for an increase next year.
creer 2y ago
10% profit margin says not much. Maximum 10% gain is not true for example because a contracted utility has little pressure to improve services, create new services, invent new energy processes, open or serve new markets. They can go with the generic political will and collect their garanteed 10%. Private enterprise wins or loses potentially big specifically by not doing that. Maximum 10% gain is also not true for example because there is little pressure to "do it right" from an economic outcome point of view (when to plan expansions, how to schedule maintenance). Skipping the extremely politically incorrect example. Maximum 10% gain is also not true for example because the current sector rarely has the opportunity to expand dramatically to support a dramatic new industry. (In that case, the gain would come from the new industry - AND the expanding utility sector) Even the Pacific North West did it the other way around: available surplus energy caused new industry to settle there.

nothercastle 2y ago

Not true the maximum losses a private utility can generate for the public are unlimited because the losses always get nationalized. The 10% margin is after C suite grift so it’s likely more than 10% you can save. Plus if you are on the hook for losses might as well take the 10%

fallingknife 2y ago
It will be paid out of tax money either way. To save me money the government would have to either: 1. run the operation at least 90% as cost effectively 2. be less likely to make major costly mistakes From my experience with government the probability of 1 is 0% and the probability of 2 is minimal. At least when PG&E caused those wildfires, their execs were fired and had to pay $100 million of their own personal money in damages. This doesn't happen when government employees screw up. They don't even lose their jobs.
- nothercastle 2y ago
  The fact that they had 100 mil to pay speaks of the excesses salaries were paying them. PGE isn’t really run any more efficiently than a government institution, at least with government there is some measure of transparency, though accountability is lacking for both situations. Capitalism doesn’t drive efficiency when there is no competition, in fact the incentive for PGE is to drive up actual costs and then raise prices to maintain 10%. The more expensive and inefficient they are the larger the 10% bucket is.
  - fallingknife 2y ago
    That 100 mil is 0.4% of annual revenue, and that isn't one year's pay, it's a lifetime of accumulation. There were 20 people in the settlement averaging close to 6 mil each (it was actually 117 mil total). That's really not that high of a net worth for people running an enormous power company. Pay peanuts, get monkeys. As for transparency, audited financial statements of public companies are infinitely more information than you will ever get about the finances of a government bureaucracy. And their only incentive is to use up their budget so they can ask for an increase next year.

creer 2y ago

10% profit margin says not much. Maximum 10% gain is not true for example because a contracted utility has little pressure to improve services, create new services, invent new energy processes, open or serve new markets. They can go with the generic political will and collect their garanteed 10%. Private enterprise wins or loses potentially big specifically by not doing that. Maximum 10% gain is also not true for example because there is little pressure to "do it right" from an economic outcome point of view (when to plan expansions, how to schedule maintenance). Skipping the extremely politically incorrect example. Maximum 10% gain is also not true for example because the current sector rarely has the opportunity to expand dramatically to support a dramatic new industry. (In that case, the gain would come from the new industry - AND the expanding utility sector) Even the Pacific North West did it the other way around: available surplus energy caused new industry to settle there.