3 ms·

There are two ways to privatise: to create a competitive market (liberalisation) or simply to outsource the execution of what is essentially still public policy

There are two ways to privatise: to create a competitive market (liberalisation) or simply to outsource the execution of what is essentially still public policy (to provide quality public transport). Japan is an example of the latter, the UK is a strongly ideologically (Thatcherite) driven attempt at the former. And those almost almost fail when it comes to infrastructure. Not so much a matter of culture but ideology. The whole private versus public debate is a red herring: in the end, these services depend completely on a functioning government taking full responsibility for the outcome, regardless of how the outcome is achieved.

m_mueller 12y ago
I don't agree fully. With the rail network I think it's pretty much the same in Japan as in the UK - since you have one set of rails going from point A to point B for most (A,B), it's not a liberalisation in either countries. With postal services we have to look at packages and letters separately - the former market is completely liberalised, for the later JP still has a de facto monopoly - that doesn't mean you're not allowed to create your own letter mailing service though, it's probably just that you can hardly match them at their price point. So I don't think Japan's case is that much different from the UK from a market perspective and I'm not quite sure whether the ideology is that different either - if you (as in the premier minister responsible for it) don't have a free market ideology, why putting privatisation on your flag at all?
mavhc 12y ago
You can't have real competition with networks, be they road, rail, telephone, internet
- hengheng 12y ago
  Where do you draw the line? Air travel/airports? Mobile data networks?
  - darkmighty 12y ago
    Competition fails where the cost of redundancy is prohibitive, which leads to either large scale partitioning (local monopolies) or monopoly (global monopoly). It doesn't really make sense to build several rail lines connecting city A to B. The same goes for telephone lines -- in all but the most dense centers, the infrastructure cost is so dominant that redundancy doesn't make sense. Now for mobile data for example, you can, for a more modest investment, cover large areas with cell towers, so direct competition occurs.
    - ChrisLTD 12y ago
      The United States is still limited to only four competing firms when it comes to mobile networking, thanks to the limited amount of available wireless spectrum and high costs for the access to that spectrum.
- DennisP 12y ago
  Internet? Then why is Google driving down prices wherever it rolls out fiber?
  - hackerboos 12y ago
    Because they cherry pick densely populated areas. They're not providing a universal service.
gsnedders 12y ago
The infrastructure in the UK is owned by Network Rail, which is a central government body. The failure has been the privatisation of the ToCs (train operating companies), and the lack of competition between them. There are many other places in the EU where the incumbent was split up into smaller, state-owned companies and then the ToCs have been opened up to competition, with good results. The problem with the British situation is there is essentially a monopoly granted to a single company for a number of years — and this doesn't give much incentive to invest.

m_mueller 12y ago

I don't agree fully. With the rail network I think it's pretty much the same in Japan as in the UK - since you have one set of rails going from point A to point B for most (A,B), it's not a liberalisation in either countries. With postal services we have to look at packages and letters separately - the former market is completely liberalised, for the later JP still has a de facto monopoly - that doesn't mean you're not allowed to create your own letter mailing service though, it's probably just that you can hardly match them at their price point. So I don't think Japan's case is that much different from the UK from a market perspective and I'm not quite sure whether the ideology is that different either - if you (as in the premier minister responsible for it) don't have a free market ideology, why putting privatisation on your flag at all?

mavhc 12y ago

You can't have real competition with networks, be they road, rail, telephone, internet

hengheng 12y ago
Where do you draw the line? Air travel/airports? Mobile data networks?
- darkmighty 12y ago
  Competition fails where the cost of redundancy is prohibitive, which leads to either large scale partitioning (local monopolies) or monopoly (global monopoly). It doesn't really make sense to build several rail lines connecting city A to B. The same goes for telephone lines -- in all but the most dense centers, the infrastructure cost is so dominant that redundancy doesn't make sense. Now for mobile data for example, you can, for a more modest investment, cover large areas with cell towers, so direct competition occurs.
  - ChrisLTD 12y ago
    The United States is still limited to only four competing firms when it comes to mobile networking, thanks to the limited amount of available wireless spectrum and high costs for the access to that spectrum.
DennisP 12y ago
Internet? Then why is Google driving down prices wherever it rolls out fiber?
- hackerboos 12y ago
  Because they cherry pick densely populated areas. They're not providing a universal service.

gsnedders 12y ago

The infrastructure in the UK is owned by Network Rail, which is a central government body. The failure has been the privatisation of the ToCs (train operating companies), and the lack of competition between them. There are many other places in the EU where the incumbent was split up into smaller, state-owned companies and then the ToCs have been opened up to competition, with good results. The problem with the British situation is there is essentially a monopoly granted to a single company for a number of years — and this doesn't give much incentive to invest.