7 ms·

Perhaps I'm too cynical, but somehow I doubt that those with decision making power that were in favour of selling at the time regret much. Our modern political

by tmnvix 2y ago

Perhaps I'm too cynical, but somehow I doubt that those with decision making power that were in favour of selling at the time regret much. Our modern political economy is almost entirely focused on ensuring that everything that can be sold to private entities (read, the market) is. In this ideology the sale would be viewed as a success regardless of any practical downsides.

Ekaros 2y ago
I think this is just the end-stage failures of social democracies. Fund the things now, even if it means selling anything that can generate slight profits in long term. Or provide basic services at reasonable rates. Eventually everything is sold and out sourced, money has been wasted on buying votes and the debt is maxed out. Then the system will fail...
- treyd 2y ago
  It's the end state of neoliberal policies. That's the ideological tendency that actually has the obsession with markets and strangling government capacity to do anything other than be a spigot for tax dollars. Scandinavian social democracies aren't perfect but they don't suffer from these entirely predictable problems to nearly the same degree.
  - jopsen 2y ago
    Sure, they do we're just not as far along the curve! That said, who is to say the trend isn't reversible some day. Also let's not forget the selling to private operators does provide benefits, not always, it's not the magic fix we pretend it is.
  - SoftTalker 2y ago
    They’ve really only existed since the end of WWII and were rescued from that war by the U S so not really enough time to judge.
  - animal_spirits 2y ago
    I think one problem is that most people confuse private ownership with "the market". Just because a utility company is owned and operated by a private entity does not mean it is influenced by market forces. Utilities fall under a natural or technological monopoly. Due to space constraints it is not desirable or efficient to have multiple companies run pipes, cables, or other infrastructure alongside each other to compete. There are no competitive forces; there is no market. Publicly run institutions or privately run+ publicly regulated institutions better serve the needs of the people in these conditions.
    - forgetfreeman 2y ago
      I think a related thing that many people get confused by is the idea that market forces even exist. It's very rare these days to find industry segments where participants actively compete on quality or price. The whole idea is a holdover from how business was done 40 years ago.
      - _DeadFred_ 2y ago
        And with today's investors just buying funds/picking some 'group' on the 401k website, they aren't investing in a company, counting on receiving dividends from the company for the rest of their lives, and therefore forcing the company to be healthy. Instead they are counting on the stock going up short term, something totally different than buying and holding for dividends. And they just keep putting money into the generic pools of XYZ stock fund, again not a specific stock that they then hold accountable for anything. In fact they can't even punish a specific company by selling it's stock, only an entire ETF or 401 fund that the company is buried in. And then there's dark pools. Trading isn't even done on the market anymore.
        maest 2y ago
        > And then there's dark pools. This is such a non-sequitor, it undermines your entire post.
      - dgoldstein0 2y ago
  - wisty 2y ago
    Neoliberalism fails because of what economists call "the theory of the second best". Neoliberalism fundamentally assumes that the best practical system is as close as possible to an ideal free market, but it's not, due to local minima (often ones we've already found!) often being better. The best system is a free market, if possible. But the second best system may not be close to the best system, it may be a local minima that is very different. A classic example is that small companies and no unions is theoretically best, but monopoly unions vs monopoly companies is the second best (since there's no single monopoly, so they negotiate something close to the theoretical ideal). Free markets are best, but if the government is going to heavily subsidise and regulate the power companies (as they are natural monoplolies, so they either get regulated or they abuse their position) then maybe it's best to just cut out the middle man.
    - mindslight 2y ago
      You're still assuming that free markets will find the global optimum, which is equivalent to asserting P=NP and shrouding it in no true Scotsman.
      - Arrath 2y ago
        Isn't part of the problem assuming that there is a single global optimum? It seems there are at least two, such as in the case of utilities: best services or best profits for the shareholders. Again in the case of utilities we see time and again that these are mutually exclusive optimums as a privatized utility makes cuts to investment, build out, maintenance, customer service, or other aspects of the business in the goals of increasing profits, to the detriment of the quality of their service.
        hgomersall 2y ago
        It's hard to argue that as a society we should construct systems that have any goal that isn't optimising (in this example) services. If that aligns with maximising profits for shareholders, then great, if not then the system is not working as it needs to. IMO it's never really about free markets per se, but about competition. If the market is not delivering effective competition, then it should be made to do so. Competition is what aligns shareholder interest with customer interest.
  - wesselbindt 2y ago
    I can't speak for the parent post of course, but what I think they might mean is this: social democracy eventually devolves into neoliberalism (or worse), which, as you rightly point out, is geared towards making life much, much worse for the many to the benefit of a shrinking few. To see some examples of this, look at the arguably social democratic Keynesian US from the fifties, and where they're at now. Similarly for the United Kingdom. Labour used to fight for social democratic policies, and since the advent of "New Labour" (Thatcher's greatest victory), they're essentially a right wing party. For a much more harrowing example, look at Allende in Chile and the US sponsored coup by Pinochet. In general what you see is that the social democratic status of a state is an unstable one. Roughly speaking, the people who would benefit from neoliberal policies happen to have a lot of money with which they can and do influence politics. There's campaign funds, lobbying, but much more importantly owning the media[1]. Propaganda is incredibly powerful (we are not immune), and it has been used successfully time and again to get people to vote against their own interests, such as abolishing social democratic practices. [1] In the case of Chile, and for example Indonesia, the mechanism is much more violent, but the principle the same. Capital is spent to successfully influence politics in favor of capital.
- dartos 2y ago
  Selling almost any state function to a private entity is almost the opposite of what social democrats want to do… I think you mean neoliberal democracies.
ksec 2y ago
>In this ideology the sale would be viewed as a success regardless of any practical downsides. In other places on earth, selling public utility requires the company to operate at similar or better level of services previously provided while retaining the cost. And those deals are mostly regulated, penalties when not meeting them. And it used to be, may be in rare cases the people in Government making those deals actually knows what they are getting out of it, so the contract are all well written. Now it seems they are selling because 1. They dont have money. 2. They are running it poorly. 3. They are bribed or have incentives to sell it. All with no caring of how the people they serve were getting any good value out of it.
- econ 2y ago
  I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times. Our railroads paid a nice 300m in divident every year then corona came, people were told to stay home. You can guess who had to pay for the lack of travelers. The most silly are ISP's. The prices in each country depend on how much people can pay and what you get for it is rng
  - philjohn 2y ago
    Privatize the profit, socialise the losses. The one privatisation I believe the UK got right was British Telecom. We now have a strongly regulated infrastructure side called OpenReach - the price they can charge for last mile connectivity is limited, and as such we have a load of different ISP's which either compete on tech and service (AAISP, Zen) or cost (PlusNet et al). And then a proliferation of alternative last mile providers has also occurred - I now have the option of 900/100 FTTP from OpenReach based suppliers, 1130/104 DOCSIS from Virgin Media and 900/900 FTTP from CityFibre based suppliers. I'm paying £40 a month for the latter.
    - ksec 2y ago
      It is one of those rare cases where Government actually knows where the monopoly could get into and formed OpenReach. Probably worth a submission on its own [1] but UK is slowly and surely getting all the FTTP roll out. Hopefully there will be enough push to get 1Gbps Connection to every home rather than settled on 30Mbps. [1] EXCLUSIVE: January 2025 update on broadband availability across the UK, nations and regions https://www.thinkbroadband.com/news/10528-exclusive-january-2025-update-on-broadband-availability-across-the-uk-nations-and-regions https://www.thinkbroadband.com/news/10528-exclusive-january-...
cscurmudgeon 2y ago
Don’t blame this on the market. A true market won’t have a heavy handed regulator in bed with a govt approved monopoly.
- LtWorf 2y ago
  A true market doesn't exist.
- DrillShopper 2y ago
  > A true market won’t have a heavy handed regulator in bed with a govt approved monopoly. So the only way to have a true market is to count on the opposite of human greed. Well hopefully that works out.
fransje26 2y ago
> but somehow I doubt that those with decision making power that were in favour of selling at the time regret much. They possibly even managed to buy a luxury car in the years that followed. Or went on holiday more often. Or somehow unexpectedly landed a nice and cush job at said energy company.

by tmnvix 2y ago

Ekaros 2y ago

I think this is just the end-stage failures of social democracies. Fund the things now, even if it means selling anything that can generate slight profits in long term. Or provide basic services at reasonable rates. Eventually everything is sold and out sourced, money has been wasted on buying votes and the debt is maxed out. Then the system will fail...

treyd 2y ago
It's the end state of neoliberal policies. That's the ideological tendency that actually has the obsession with markets and strangling government capacity to do anything other than be a spigot for tax dollars. Scandinavian social democracies aren't perfect but they don't suffer from these entirely predictable problems to nearly the same degree.
- jopsen 2y ago
  Sure, they do we're just not as far along the curve! That said, who is to say the trend isn't reversible some day. Also let's not forget the selling to private operators does provide benefits, not always, it's not the magic fix we pretend it is.
- SoftTalker 2y ago
  They’ve really only existed since the end of WWII and were rescued from that war by the U S so not really enough time to judge.
- animal_spirits 2y ago
  I think one problem is that most people confuse private ownership with "the market". Just because a utility company is owned and operated by a private entity does not mean it is influenced by market forces. Utilities fall under a natural or technological monopoly. Due to space constraints it is not desirable or efficient to have multiple companies run pipes, cables, or other infrastructure alongside each other to compete. There are no competitive forces; there is no market. Publicly run institutions or privately run+ publicly regulated institutions better serve the needs of the people in these conditions.
  - forgetfreeman 2y ago
    I think a related thing that many people get confused by is the idea that market forces even exist. It's very rare these days to find industry segments where participants actively compete on quality or price. The whole idea is a holdover from how business was done 40 years ago.
    - _DeadFred_ 2y ago
      And with today's investors just buying funds/picking some 'group' on the 401k website, they aren't investing in a company, counting on receiving dividends from the company for the rest of their lives, and therefore forcing the company to be healthy. Instead they are counting on the stock going up short term, something totally different than buying and holding for dividends. And they just keep putting money into the generic pools of XYZ stock fund, again not a specific stock that they then hold accountable for anything. In fact they can't even punish a specific company by selling it's stock, only an entire ETF or 401 fund that the company is buried in. And then there's dark pools. Trading isn't even done on the market anymore.
      - maest 2y ago
        > And then there's dark pools. This is such a non-sequitor, it undermines your entire post.
    - dgoldstein0 2y ago
- wisty 2y ago
  Neoliberalism fails because of what economists call "the theory of the second best". Neoliberalism fundamentally assumes that the best practical system is as close as possible to an ideal free market, but it's not, due to local minima (often ones we've already found!) often being better. The best system is a free market, if possible. But the second best system may not be close to the best system, it may be a local minima that is very different. A classic example is that small companies and no unions is theoretically best, but monopoly unions vs monopoly companies is the second best (since there's no single monopoly, so they negotiate something close to the theoretical ideal). Free markets are best, but if the government is going to heavily subsidise and regulate the power companies (as they are natural monoplolies, so they either get regulated or they abuse their position) then maybe it's best to just cut out the middle man.
  - mindslight 2y ago
    You're still assuming that free markets will find the global optimum, which is equivalent to asserting P=NP and shrouding it in no true Scotsman.
    - Arrath 2y ago
      Isn't part of the problem assuming that there is a single global optimum? It seems there are at least two, such as in the case of utilities: best services or best profits for the shareholders. Again in the case of utilities we see time and again that these are mutually exclusive optimums as a privatized utility makes cuts to investment, build out, maintenance, customer service, or other aspects of the business in the goals of increasing profits, to the detriment of the quality of their service.
      - hgomersall 2y ago
        It's hard to argue that as a society we should construct systems that have any goal that isn't optimising (in this example) services. If that aligns with maximising profits for shareholders, then great, if not then the system is not working as it needs to. IMO it's never really about free markets per se, but about competition. If the market is not delivering effective competition, then it should be made to do so. Competition is what aligns shareholder interest with customer interest.
- wesselbindt 2y ago
  I can't speak for the parent post of course, but what I think they might mean is this: social democracy eventually devolves into neoliberalism (or worse), which, as you rightly point out, is geared towards making life much, much worse for the many to the benefit of a shrinking few. To see some examples of this, look at the arguably social democratic Keynesian US from the fifties, and where they're at now. Similarly for the United Kingdom. Labour used to fight for social democratic policies, and since the advent of "New Labour" (Thatcher's greatest victory), they're essentially a right wing party. For a much more harrowing example, look at Allende in Chile and the US sponsored coup by Pinochet. In general what you see is that the social democratic status of a state is an unstable one. Roughly speaking, the people who would benefit from neoliberal policies happen to have a lot of money with which they can and do influence politics. There's campaign funds, lobbying, but much more importantly owning the media[1]. Propaganda is incredibly powerful (we are not immune), and it has been used successfully time and again to get people to vote against their own interests, such as abolishing social democratic practices. [1] In the case of Chile, and for example Indonesia, the mechanism is much more violent, but the principle the same. Capital is spent to successfully influence politics in favor of capital.
dartos 2y ago
Selling almost any state function to a private entity is almost the opposite of what social democrats want to do… I think you mean neoliberal democracies.

ksec 2y ago

>In this ideology the sale would be viewed as a success regardless of any practical downsides. In other places on earth, selling public utility requires the company to operate at similar or better level of services previously provided while retaining the cost. And those deals are mostly regulated, penalties when not meeting them. And it used to be, may be in rare cases the people in Government making those deals actually knows what they are getting out of it, so the contract are all well written. Now it seems they are selling because 1. They dont have money. 2. They are running it poorly. 3. They are bribed or have incentives to sell it. All with no caring of how the people they serve were getting any good value out of it.

econ 2y ago
I would argue that if something may not fail you can only pretend to privatize. You only privatize the profit during the good times. Our railroads paid a nice 300m in divident every year then corona came, people were told to stay home. You can guess who had to pay for the lack of travelers. The most silly are ISP's. The prices in each country depend on how much people can pay and what you get for it is rng
- philjohn 2y ago
  Privatize the profit, socialise the losses. The one privatisation I believe the UK got right was British Telecom. We now have a strongly regulated infrastructure side called OpenReach - the price they can charge for last mile connectivity is limited, and as such we have a load of different ISP's which either compete on tech and service (AAISP, Zen) or cost (PlusNet et al). And then a proliferation of alternative last mile providers has also occurred - I now have the option of 900/100 FTTP from OpenReach based suppliers, 1130/104 DOCSIS from Virgin Media and 900/900 FTTP from CityFibre based suppliers. I'm paying £40 a month for the latter.
  - ksec 2y ago
    It is one of those rare cases where Government actually knows where the monopoly could get into and formed OpenReach. Probably worth a submission on its own [1] but UK is slowly and surely getting all the FTTP roll out. Hopefully there will be enough push to get 1Gbps Connection to every home rather than settled on 30Mbps. [1] EXCLUSIVE: January 2025 update on broadband availability across the UK, nations and regions https://www.thinkbroadband.com/news/10528-exclusive-january-2025-update-on-broadband-availability-across-the-uk-nations-and-regions https://www.thinkbroadband.com/news/10528-exclusive-january-...

cscurmudgeon 2y ago

Don’t blame this on the market. A true market won’t have a heavy handed regulator in bed with a govt approved monopoly.

LtWorf 2y ago
A true market doesn't exist.
DrillShopper 2y ago
> A true market won’t have a heavy handed regulator in bed with a govt approved monopoly. So the only way to have a true market is to count on the opposite of human greed. Well hopefully that works out.

fransje26 2y ago

> but somehow I doubt that those with decision making power that were in favour of selling at the time regret much. They possibly even managed to buy a luxury car in the years that followed. Or went on holiday more often. Or somehow unexpectedly landed a nice and cush job at said energy company.