6 ms·

That's the UK in a nutshell this past decade. Privatise all of the public services for a quick buck, and slowly but surely the service decays whilst the prices

That's the UK in a nutshell this past decade. Privatise all of the public services for a quick buck, and slowly but surely the service decays whilst the prices for consumers increases. The trains in the UK are a great example of this.

jacobp100 11mo ago
[flagged]
- rwmj 11mo ago
  Citation definitely needed for this one.
  - zimpenfish 11mo ago
    > Following the 2010 general election, the new Business Secretary in the coalition government, Vince Cable, asked Richard Hooper CBE to expand on his previous report, to account for EU Directive 2008/6/EC which called for the postal sector to be fully open to competition by 31 December 2012. Based on the updated Hooper Review, the government passed the Postal Services Act 2011. The act allowed for up to 90% of Royal Mail to be privatised, with at least 10% of shares to be held by Royal Mail employees. https://en.wikipedia.org/wiki/Royal_Mail https://en.wikipedia.org/wiki/Royal_Mail which links to https://web.archive.org/web/20150224033637/http://stakeholders.ofcom.org.uk/binaries/consultations/e2e-guidance/responses/TNT.pdf https://web.archive.org/web/20150224033637/http://stakeholde... (the EU directive has gone from their website and isn't in archive.org) which says > Summary of legal position: Article 7 of the EU Postal Directive (Financing of universal services), has required the progressive – and since 1 January 2013, total - liberalisation of postal services throughout the EU. Hopefully this qualifies as a valid citation.
    - Retric 11mo ago
      That’s a little misleading in terms of EU requirements: https://eur-lex.europa.eu/eli/dir/2008/6/oj/eng https://eur-lex.europa.eu/eli/dir/2008/6/oj/eng “The external financing of the residual net costs of the universal service may still be necessary for some Member States. It is therefore appropriate to explicitly clarify the alternatives available in order to ensure the financing of the universal service, to the extent that this is needed and is adequately justified, while leaving Member States the choice of the financing mechanisms to be used. These alternatives include the use of public procurement procedures including, as provided for in the public procurement Directives, competitive dialogue or negotiated procedures with or without the publication of a contract notice and, whenever universal service obligations entail net costs of the universal service and represent an unfair burden on the designated universal service provider, public compensation and cost sharing between service providers and/or users in a transparent manner by means of contributions to a compensation fund. Member States may use other means of financing permitted by Community law, such as deciding, where and if necessary, that the profits accruing from other activities of the universal service provider(s) outside the scope of the universal service are to be assigned, in whole or in part, to the financing of the net costs of the universal service, as long as this is in line with the Treaty. Without prejudice to the obligation of Member States to uphold the Treaty rules on State aid, including specific notification requirements in this context, Member States may notify the Commission of the financing mechanisms used to cover any net costs of the universal service, which should be reflected in the regular reports that the Commission should present to the European Parliament and Council on the application of Directive 97/67/EC.” IE Privatizing Royal mail was not required by the EU, instead they needed to allow for competition by UPS, FedEx etc.
    - xorcist 11mo ago
      "Open to competition" != "Privatised"
  - exasperaited 11mo ago
    jacobp100 is referring to: https://eur-lex.europa.eu/eli/dir/2008/6/oj/eng https://eur-lex.europa.eu/eli/dir/2008/6/oj/eng They did not force the privatisation of Royal Mail; it was first made a special sort of PLC back in 2000 so that it could access private money, and arguably that helped accelerate the EU belief that postal services needed competition. But they did force competition in EU postal delivery, and that effectively drove the decision to essentially fully privatise Royal Mail so it could compete. It also had a very unfortunate outbreak of Crozier Disease and that didn't help.
- halo 11mo ago
  If this is the case, why are many other EU postal services still state-owned (e.g. Ireland, Poland, Cyprus, Greece)? The UK left the EU 5 years ago yet it’s still being used as cover for UK political decisions.
  - osrec 11mo ago
    We live in a world where, for certain topics, people believe whatever narrative suits them at the time. Facts seem to not matter too much. Brexit is one of those topics.
- FridayoLeary 11mo ago
  Other users have pointed out this isn't entirely accurate but i'm still shocked. My understanding was the job of the eu was to impose continent wide standards to enable free exchange between member states. How does dictating the policy of national postal services achieve any of that?
  - hdgvhicv 11mo ago
    Preventing governemt monopoles in a specific areas is what the eu predecessors started of back in the coal and steel days.
  - avianlyric 11mo ago
    The EU generally doesn’t like state subsidies of services. Which makes sense, because state subsidies would provide an unfair advantage to companies operating in that state, over other member states. Reducing trade and competition across the bloc. For postal services, the same applies. EU doesn’t like the idea of a state owned or subsidised postal business, preventing the entrance of competition from companies in other member states, or allowing the subsidised entities to expand and outcompete companies in other EU states. The EU doesn’t set national postal policy. It only requires that the basic postal service is an open to competition from entities (private and public) in any EU member. With a carve outs for the funding of universal service (I.e. making sure that every address gets post regardless of profitability), where state aid is clearly needed.
pas 11mo ago
water companies in England and Wales are perhaps even better the same sorry ass situation that PG&E is in California, everything is brutally expensive because it's an absolutely shitty old system sustaining an overgrowning fucking sprawl (which coincidentally also means more roads and pipes and less trains and tickets)
ch4s3 11mo ago
There's no iron law stating that private services must necessarily decay or be under provisioned.
- card_zero 11mo ago
  Besides, government-run British Rail was historically shit, reaching peak shitness in 1984 when they brought out the pleading slogan "We're Getting There".
  - ch4s3 11mo ago
    The Stockholm subway and basically all of Japanese rail are privately run.
  - aitchnyu 11mo ago
    This is news to me. When did they fall far behind other western countries?
- UltraSane 11mo ago
  Greed
  - ch4s3 11mo ago
    Incentives?
- kitd 11mo ago
  Maybe not iron, but "common" law if you like is for privatised services to enshittify post haste. ;)
- stuaxo 11mo ago
  Fiduciary duty usually achieves this.
- drweevil 11mo ago
  The iron law of capitalism--maximize investor return, minimize expense, even at the expense of the core product. This is especially true when there is not adequate competition, which is the case in a lot of sectors in this country.
ralferoo 11mo ago
It does seem to be the inevitable consequence, but often privatisation is required too. Publicly run services and utilities often suffer from inefficiencies because there's no incentive to change the processes and lots of government funded agencies suffer from the "we must spend our entire budget or we'll get less next year" syndrome. Privatisation replaces the leadership with people who are incentivised to make the organisation as efficient as possible, but the actual quality of the services delivered matters if people are stuck with a now privatised monopoly and they have no choice of provider (or e.g. energy companies where the choice doesn't really make a meaningful difference anyway). Probably the sensible middle ground is for the government to maintain a sizeable but minority share in everything that gets privatised, with a general policy of never exercising the voting rights unless it's against a course of action that is clearly detrimental to public interest. Probably even the threat of being able to vote out key personnel would be enough to keep them focussed on serving the public better. And with something like a 40% share, the shareholders have enough incentive to keep profitability high, and the government would also share in the profits of the previously public entity.
- franga2000 11mo ago
  > Privatisation replaces the leadership with people who are incentivised to make the organisation as efficient as possible This is the core lie that economists have sold us. Private companies are not incentivised to be efficient, but to make as big a profit as possible. This usually means they cut quality, reduce unprofitable activity and extract every last cent they can out of their customers or other source of funding. Public benefit companies run on a service-first principle. They deliver the required service to everyone, at the same quality, at a reasonable price - at all cost. They're sometimes inefficient at doing that, but more often than not, any "efficiency" gains would mean reducing service quality or accessibility, which is not acceptable when you work for the people, not the shareholders.
- dgroshev 11mo ago
  This logic breaks apart in high positive externality areas, like public transport (or indeed postal systems). Public transport brings a lot of value to other businesses and communities it operates in that can't be directly captured in fares. Which means that if a public transport system is profitable and the goal is maximising total economic (and social) value of the area as a whole, the system either under-invests, or is too expensive, or both. The classic economic solution to this is subsidies: capture some of the generated value in taxes, re-invest back into the transport system. However, this makes the business part of the whole arrangement almost meaningless, because the amount of optimal subsidy can't be objectively determined. It's impossible to distinguish a bad business losing money from inefficiencies from a good business asking for subsidies to optimise its total impact. There are some peculiar arrangements that some countries and systems were able to create, like direct land value capture through transport companies buying and selling property. But those cases are pretty exceptional and for practical purposes don't scale.

jacobp100 11mo ago

[flagged]

rwmj 11mo ago
Citation definitely needed for this one.
- zimpenfish 11mo ago
  > Following the 2010 general election, the new Business Secretary in the coalition government, Vince Cable, asked Richard Hooper CBE to expand on his previous report, to account for EU Directive 2008/6/EC which called for the postal sector to be fully open to competition by 31 December 2012. Based on the updated Hooper Review, the government passed the Postal Services Act 2011. The act allowed for up to 90% of Royal Mail to be privatised, with at least 10% of shares to be held by Royal Mail employees. https://en.wikipedia.org/wiki/Royal_Mail https://en.wikipedia.org/wiki/Royal_Mail which links to https://web.archive.org/web/20150224033637/http://stakeholders.ofcom.org.uk/binaries/consultations/e2e-guidance/responses/TNT.pdf https://web.archive.org/web/20150224033637/http://stakeholde... (the EU directive has gone from their website and isn't in archive.org) which says > Summary of legal position: Article 7 of the EU Postal Directive (Financing of universal services), has required the progressive – and since 1 January 2013, total - liberalisation of postal services throughout the EU. Hopefully this qualifies as a valid citation.
  - Retric 11mo ago
    That’s a little misleading in terms of EU requirements: https://eur-lex.europa.eu/eli/dir/2008/6/oj/eng https://eur-lex.europa.eu/eli/dir/2008/6/oj/eng “The external financing of the residual net costs of the universal service may still be necessary for some Member States. It is therefore appropriate to explicitly clarify the alternatives available in order to ensure the financing of the universal service, to the extent that this is needed and is adequately justified, while leaving Member States the choice of the financing mechanisms to be used. These alternatives include the use of public procurement procedures including, as provided for in the public procurement Directives, competitive dialogue or negotiated procedures with or without the publication of a contract notice and, whenever universal service obligations entail net costs of the universal service and represent an unfair burden on the designated universal service provider, public compensation and cost sharing between service providers and/or users in a transparent manner by means of contributions to a compensation fund. Member States may use other means of financing permitted by Community law, such as deciding, where and if necessary, that the profits accruing from other activities of the universal service provider(s) outside the scope of the universal service are to be assigned, in whole or in part, to the financing of the net costs of the universal service, as long as this is in line with the Treaty. Without prejudice to the obligation of Member States to uphold the Treaty rules on State aid, including specific notification requirements in this context, Member States may notify the Commission of the financing mechanisms used to cover any net costs of the universal service, which should be reflected in the regular reports that the Commission should present to the European Parliament and Council on the application of Directive 97/67/EC.” IE Privatizing Royal mail was not required by the EU, instead they needed to allow for competition by UPS, FedEx etc.
  - xorcist 11mo ago
    "Open to competition" != "Privatised"
- exasperaited 11mo ago
  jacobp100 is referring to: https://eur-lex.europa.eu/eli/dir/2008/6/oj/eng https://eur-lex.europa.eu/eli/dir/2008/6/oj/eng They did not force the privatisation of Royal Mail; it was first made a special sort of PLC back in 2000 so that it could access private money, and arguably that helped accelerate the EU belief that postal services needed competition. But they did force competition in EU postal delivery, and that effectively drove the decision to essentially fully privatise Royal Mail so it could compete. It also had a very unfortunate outbreak of Crozier Disease and that didn't help.
halo 11mo ago
If this is the case, why are many other EU postal services still state-owned (e.g. Ireland, Poland, Cyprus, Greece)? The UK left the EU 5 years ago yet it’s still being used as cover for UK political decisions.
- osrec 11mo ago
  We live in a world where, for certain topics, people believe whatever narrative suits them at the time. Facts seem to not matter too much. Brexit is one of those topics.
FridayoLeary 11mo ago
Other users have pointed out this isn't entirely accurate but i'm still shocked. My understanding was the job of the eu was to impose continent wide standards to enable free exchange between member states. How does dictating the policy of national postal services achieve any of that?
- hdgvhicv 11mo ago
  Preventing governemt monopoles in a specific areas is what the eu predecessors started of back in the coal and steel days.
- avianlyric 11mo ago
  The EU generally doesn’t like state subsidies of services. Which makes sense, because state subsidies would provide an unfair advantage to companies operating in that state, over other member states. Reducing trade and competition across the bloc. For postal services, the same applies. EU doesn’t like the idea of a state owned or subsidised postal business, preventing the entrance of competition from companies in other member states, or allowing the subsidised entities to expand and outcompete companies in other EU states. The EU doesn’t set national postal policy. It only requires that the basic postal service is an open to competition from entities (private and public) in any EU member. With a carve outs for the funding of universal service (I.e. making sure that every address gets post regardless of profitability), where state aid is clearly needed.

pas 11mo ago

water companies in England and Wales are perhaps even better the same sorry ass situation that PG&E is in California, everything is brutally expensive because it's an absolutely shitty old system sustaining an overgrowning fucking sprawl (which coincidentally also means more roads and pipes and less trains and tickets)

ch4s3 11mo ago

There's no iron law stating that private services must necessarily decay or be under provisioned.

card_zero 11mo ago
Besides, government-run British Rail was historically shit, reaching peak shitness in 1984 when they brought out the pleading slogan "We're Getting There".
- ch4s3 11mo ago
  The Stockholm subway and basically all of Japanese rail are privately run.
- aitchnyu 11mo ago
  This is news to me. When did they fall far behind other western countries?
UltraSane 11mo ago
Greed
- ch4s3 11mo ago
  Incentives?
kitd 11mo ago
Maybe not iron, but "common" law if you like is for privatised services to enshittify post haste. ;)
stuaxo 11mo ago
Fiduciary duty usually achieves this.
drweevil 11mo ago
The iron law of capitalism--maximize investor return, minimize expense, even at the expense of the core product. This is especially true when there is not adequate competition, which is the case in a lot of sectors in this country.

ralferoo 11mo ago

It does seem to be the inevitable consequence, but often privatisation is required too. Publicly run services and utilities often suffer from inefficiencies because there's no incentive to change the processes and lots of government funded agencies suffer from the "we must spend our entire budget or we'll get less next year" syndrome. Privatisation replaces the leadership with people who are incentivised to make the organisation as efficient as possible, but the actual quality of the services delivered matters if people are stuck with a now privatised monopoly and they have no choice of provider (or e.g. energy companies where the choice doesn't really make a meaningful difference anyway). Probably the sensible middle ground is for the government to maintain a sizeable but minority share in everything that gets privatised, with a general policy of never exercising the voting rights unless it's against a course of action that is clearly detrimental to public interest. Probably even the threat of being able to vote out key personnel would be enough to keep them focussed on serving the public better. And with something like a 40% share, the shareholders have enough incentive to keep profitability high, and the government would also share in the profits of the previously public entity.

franga2000 11mo ago
> Privatisation replaces the leadership with people who are incentivised to make the organisation as efficient as possible This is the core lie that economists have sold us. Private companies are not incentivised to be efficient, but to make as big a profit as possible. This usually means they cut quality, reduce unprofitable activity and extract every last cent they can out of their customers or other source of funding. Public benefit companies run on a service-first principle. They deliver the required service to everyone, at the same quality, at a reasonable price - at all cost. They're sometimes inefficient at doing that, but more often than not, any "efficiency" gains would mean reducing service quality or accessibility, which is not acceptable when you work for the people, not the shareholders.
dgroshev 11mo ago
This logic breaks apart in high positive externality areas, like public transport (or indeed postal systems). Public transport brings a lot of value to other businesses and communities it operates in that can't be directly captured in fares. Which means that if a public transport system is profitable and the goal is maximising total economic (and social) value of the area as a whole, the system either under-invests, or is too expensive, or both. The classic economic solution to this is subsidies: capture some of the generated value in taxes, re-invest back into the transport system. However, this makes the business part of the whole arrangement almost meaningless, because the amount of optimal subsidy can't be objectively determined. It's impossible to distinguish a bad business losing money from inefficiencies from a good business asking for subsidies to optimise its total impact. There are some peculiar arrangements that some countries and systems were able to create, like direct land value capture through transport companies buying and selling property. But those cases are pretty exceptional and for practical purposes don't scale.