Is Privatisation A Good Thing?
Poll: Is Privatisation A Good Thing?
Total Members Polled: 122
Discussion
Well there's a lot of bad news around privatised water companies etc, and now we see a Czech billionaire trying to buy the Post Office.
Full disclosure; I'm a businessman so a fully signed-up Capitalist but consider myself to be caring and considerate, and detest the rampant/rapacious Capitalism and dishonesty that we've seen under the Tories, with profits from our infrastructure going into the pockets of (often overseas) shareholders.
My first adult job was in a nationalised industry the early 80's, which I also detested because of the restrictive working practices and attitude of unions (it was a closed shop), so couldn't wait to get out of there. But don't think things are better now with privatisation.
A Labour victory seems all but nailed on so what would you like them to do (assuming they don't make a mess of things)?
Full disclosure; I'm a businessman so a fully signed-up Capitalist but consider myself to be caring and considerate, and detest the rampant/rapacious Capitalism and dishonesty that we've seen under the Tories, with profits from our infrastructure going into the pockets of (often overseas) shareholders.
My first adult job was in a nationalised industry the early 80's, which I also detested because of the restrictive working practices and attitude of unions (it was a closed shop), so couldn't wait to get out of there. But don't think things are better now with privatisation.
A Labour victory seems all but nailed on so what would you like them to do (assuming they don't make a mess of things)?
Services like gas, water, electricity generation and supply should not be privatised, they are fundamental needs and as such should not be run for profit.
The rail network was within a whisker of breaking even just before that idiot John Major privatised it and look how well that turned out...
The rail network was within a whisker of breaking even just before that idiot John Major privatised it and look how well that turned out...
Good for whom?
I think many individuals (many with close links to the Tories) have got very rich since Thatcher launched her ideological war on public ownership in the 1980s but I am less certain it has been good for employees, consumers or the public purse.
As a general point, there are certain industries related to infrastructure where public ownership probably makes sense and for which attempts to create markets will be inefficient.
I think many individuals (many with close links to the Tories) have got very rich since Thatcher launched her ideological war on public ownership in the 1980s but I am less certain it has been good for employees, consumers or the public purse.
As a general point, there are certain industries related to infrastructure where public ownership probably makes sense and for which attempts to create markets will be inefficient.
Tango13 said:
Services like gas, water, electricity generation and supply should not be privatised, they are fundamental needs and as such should not be run for profit.
The rail network was within a whisker of breaking even just before that idiot John Major privatised it and look how well that turned out...
Pretty much this. I think this is the Chinese Communist Party model. Stuff we need, water, power, public transport, education, health, is state owned. Stuff we want, cars, TVs etc is privatised. The rail network was within a whisker of breaking even just before that idiot John Major privatised it and look how well that turned out...
Isn't Daniel Kretinsky bidding for Royal Mail, not the Post Office?
My answer to the OP's question is "yes, sometimes". If an organisation provides a necessity and there is no consumer choice - such as we have with water companies - then privatisation is a bad idea in my opinion. Conversely, if what's provided is discretionary and there's competition then privatisation can deliver benefits over and above state provision.
However, one usually sees a mix. The NHS relies heavily on private GP and dentist practices, and the state owns Network Rail but trains are run by private franchises. Except where they're not, such as LNER. Meanwhile, private healthcare providers use NHS doctors and might turn to an NHS hospital in an emergency, for example.
My answer to the OP's question is "yes, sometimes". If an organisation provides a necessity and there is no consumer choice - such as we have with water companies - then privatisation is a bad idea in my opinion. Conversely, if what's provided is discretionary and there's competition then privatisation can deliver benefits over and above state provision.
However, one usually sees a mix. The NHS relies heavily on private GP and dentist practices, and the state owns Network Rail but trains are run by private franchises. Except where they're not, such as LNER. Meanwhile, private healthcare providers use NHS doctors and might turn to an NHS hospital in an emergency, for example.
Tango13 said:
Services like gas, water, electricity generation and supply should not be privatised, they are fundamental needs and as such should not be run for profit.
The rail network was within a whisker of breaking even just before that idiot John Major privatised it and look how well that turned out...
Pretty much my take. The rail network was within a whisker of breaking even just before that idiot John Major privatised it and look how well that turned out...
It's very difficult and I would consider would the investment be any better in public ownership for the industry in question? From personal experience I'd say that water should be renationalised because it's harder for an mp to dodge difficult complains than a faceless CEO - over 6wks to fix a major visible leak near me and then we get a hosepipe restriction!!!
The railways is one that is constantly brought up and argued about, I never had to commute under BR but did have lots of leisure travel which was always on time/clean and available. I read Christian Wolmar's British Rail book and it seemed to surmise to me that a public organisation managed like a private business was starting to work and was finally getting on top of itself during sectorisation. Sadly it was then sold for a pittance and we get the s
t we have now which I have experienced of paying alot of money for sitting on the floor of a grubby train that was usually late.
The railways is one that is constantly brought up and argued about, I never had to commute under BR but did have lots of leisure travel which was always on time/clean and available. I read Christian Wolmar's British Rail book and it seemed to surmise to me that a public organisation managed like a private business was starting to work and was finally getting on top of itself during sectorisation. Sadly it was then sold for a pittance and we get the s
t we have now which I have experienced of paying alot of money for sitting on the floor of a grubby train that was usually late. Utilities should be publicly owned or they just end up being a cash dispenser for the rich at the expense of everyone else.
Railways. Mixed feelings. I'm old enough to remember pre-privatisation "British Rail". Trains were perpetually late, broke down a lot, were always overcrowded and were utterly, utterly fking filthy. Also, the cost was so high that, as a kid growing up in a working class faimily, going anywhere on a train was a massive treat which happend a couple of times a year at best. If anything, privatisation has brought better fares (though they're still fking scandalous) and the trains are mostly clean as private companies have a brand image to take care of.
Railways. Mixed feelings. I'm old enough to remember pre-privatisation "British Rail". Trains were perpetually late, broke down a lot, were always overcrowded and were utterly, utterly f
king filthy. Also, the cost was so high that, as a kid growing up in a working class faimily, going anywhere on a train was a massive treat which happend a couple of times a year at best. If anything, privatisation has brought better fares (though they're still fking scandalous) and the trains are mostly clean as private companies have a brand image to take care of.six wheels said:
Critical infrastructure, utilities, health and security should not be run for profit.
But it’s complicated.
Agree.But it’s complicated.
No one should be making a profit on any of those you mention, and I would make sure that public transport including the rail network, is included in that.
I blame the government (any government) for not being able to make either publicly owned, or privatised, work properly. They have the power to set the rules and regulations, and yet they seemingly cannot manage this. It results in my urine boiling.
Tango13 said:
Services like gas, water, electricity generation and supply should not be privatised, they are fundamental needs and as such should not be run for profit
Pretty much my thoughts, especially regarding water. Why something which is vital to live is for profit is a massive no from me.The tedious answer to the bald question as posed in the thread title is "It really depends".
The OP is clearly talking more about services and infrastructure. And there I definitely come down on the "no, it's not". Is it something we're happy to go without if the provider fails? Is meaningful competition possible? Is it something people can meaningfully choose to go without? Is it something we haven't deemed as a social good beyond its ability to turn a profit? If the answer is 'yes' to those questions then let Privatisation run wild, but also don't expect the taxpayer to pick up a tab when it goes wrong. Private capital, private risk, private responsibility, private profit...and private loss if it comes to that.
If the answer is 'no' to one or some of those questions then the case for having that service or infrastructure or industry in private hands starts looking shaky, and the case becomes weaker the more 'Noes' there are.
What happens all too often under the UK 'privatisation' system is that an essential service (either literally essential like water or what we have decided is economically/socially essential like rail) get sold to private capital, it gets strip-mined for short-term profit or incompetently run, the private owners bail and the state picks up the tab because we can't just turn off water to the Thames Valley or stop running trains on the East Coast Main Line.
The sweeping nationalisations under the Attlee government in the 1940s included a removals company, several hotel chains and a travel agent's (albeit that was via nationalisation of the railways rather than a specific desire to hold Pickford's as part of the common wealth of the nation...) and I think it would be hard to argue that they were strictly necessary or delivered some sort of service or accessibility that was beyond the ability of the private sector.
There's also the point that it's not just a dichotomy between 'privatisation' and 'nationalisation', although that has often been how it has panned out in Britain due to our big experiment with common ownership being in the post-WW2 years when central planning was very much in vogue having just seemingly delivered miraculous results. But just because something 'isn't private' doesn't mean it has to be nationalised. A lot of countries have their infrastructure and services controlled by regional or municipal governments. There's co-determination and co-operative business models and so on.
The OP is clearly talking more about services and infrastructure. And there I definitely come down on the "no, it's not". Is it something we're happy to go without if the provider fails? Is meaningful competition possible? Is it something people can meaningfully choose to go without? Is it something we haven't deemed as a social good beyond its ability to turn a profit? If the answer is 'yes' to those questions then let Privatisation run wild, but also don't expect the taxpayer to pick up a tab when it goes wrong. Private capital, private risk, private responsibility, private profit...and private loss if it comes to that.
If the answer is 'no' to one or some of those questions then the case for having that service or infrastructure or industry in private hands starts looking shaky, and the case becomes weaker the more 'Noes' there are.
What happens all too often under the UK 'privatisation' system is that an essential service (either literally essential like water or what we have decided is economically/socially essential like rail) get sold to private capital, it gets strip-mined for short-term profit or incompetently run, the private owners bail and the state picks up the tab because we can't just turn off water to the Thames Valley or stop running trains on the East Coast Main Line.
The sweeping nationalisations under the Attlee government in the 1940s included a removals company, several hotel chains and a travel agent's (albeit that was via nationalisation of the railways rather than a specific desire to hold Pickford's as part of the common wealth of the nation...) and I think it would be hard to argue that they were strictly necessary or delivered some sort of service or accessibility that was beyond the ability of the private sector.
There's also the point that it's not just a dichotomy between 'privatisation' and 'nationalisation', although that has often been how it has panned out in Britain due to our big experiment with common ownership being in the post-WW2 years when central planning was very much in vogue having just seemingly delivered miraculous results. But just because something 'isn't private' doesn't mean it has to be nationalised. A lot of countries have their infrastructure and services controlled by regional or municipal governments. There's co-determination and co-operative business models and so on.
Edited by 2xChevrons on Friday 17th May 10:57
Again there are many pros and cons of privatisation.
One major con in the last two decades is the rise of venture capital/investors who spot the niche to buy out monopoly/duopoly businesses, load them with debt or sale and leasebacks and whilst some may not have paid dividends, can apply management fees to the business.
Whilst utilities are price capped, we see businesses such are Wightlink which are monopolies from their port, but duopolies for transport on the IOW charging as much as they can get away with.
One major con in the last two decades is the rise of venture capital/investors who spot the niche to buy out monopoly/duopoly businesses, load them with debt or sale and leasebacks and whilst some may not have paid dividends, can apply management fees to the business.
Whilst utilities are price capped, we see businesses such are Wightlink which are monopolies from their port, but duopolies for transport on the IOW charging as much as they can get away with.
The difference between public and private is easy to illustrate. Our postman saunters about, chatting on his phone while the Amazon guys dash up and down the drive. BT/Openreach were just as bad until they were exposed to competition for phone and internet.
Issues with utilities and the railways in UK have more to do with objectives and funding than the ownership structure. Most other governments aren't daft enough to think they can just magically privatise something and walk away.
The "essentials" argument doesn't stack up on its own. Food is essential but no one is shouting for that to be nationalised.
There's more of a case for nationalising things with fixed infrastructure like railway track and water pipes but it still comes back to objectives and funding rather than ownership structure.
Check out the condition of UK roads - they aren't privatised but just look at the state of them!
Issues with utilities and the railways in UK have more to do with objectives and funding than the ownership structure. Most other governments aren't daft enough to think they can just magically privatise something and walk away.
The "essentials" argument doesn't stack up on its own. Food is essential but no one is shouting for that to be nationalised.
There's more of a case for nationalising things with fixed infrastructure like railway track and water pipes but it still comes back to objectives and funding rather than ownership structure.
Check out the condition of UK roads - they aren't privatised but just look at the state of them!
Panamax said:
The difference between public and private is easy to illustrate. Our postman saunters about, chatting on his phone while the Amazon guys dash up and down the drive. BT/Openreach were just as bad until they were exposed to competition for phone and internet.
I'm not sure that pushing everything down to the level that Amazon treats its 'human capital' in the name of consumer service is exactly the best advert for private business. Panamax said:
The "essentials" argument doesn't stack up on its own. Food is essential but no one is shouting for that to be nationalised.
I guess the difference is that there are many different food producers and many different food retailers, so they have to compete. On the other hand, I have no choice over water and the only train company running between my town and my work location, or my nearest good shopping city, is Northern, so they can take the piss on price as I've no other choice.Panamax said:
The difference between public and private is easy to illustrate. Our postman saunters about, chatting on his phone while the Amazon guys dash up and down the drive. BT/Openreach were just as bad until they were exposed to competition for phone and internet.
Issues with utilities and the railways in UK have more to do with objectives and funding than the ownership structure. Most other governments aren't daft enough to think they can just magically privatise something and walk away.
The "essentials" argument doesn't stack up on its own. Food is essential but no one is shouting for that to be nationalised.
There's more of a case for nationalising things with fixed infrastructure like railway track and water pipes but it still comes back to objectives and funding rather than ownership structure.
Check out the condition of UK roads - they aren't privatised but just look at the state of them!
Isn't your postman an employee of a private company?Issues with utilities and the railways in UK have more to do with objectives and funding than the ownership structure. Most other governments aren't daft enough to think they can just magically privatise something and walk away.
The "essentials" argument doesn't stack up on its own. Food is essential but no one is shouting for that to be nationalised.
There's more of a case for nationalising things with fixed infrastructure like railway track and water pipes but it still comes back to objectives and funding rather than ownership structure.
Check out the condition of UK roads - they aren't privatised but just look at the state of them!
I think I'm right in saying the UK is just about the only country in the world to have fully privatised water. The essentials argument is probably more nuanced than at first sight. Certain utilities are core services. Water is in a way that railways aren't for example, you could live without railways if it came to it. But I'm struggling to think of a single privatisation that can be said to have benefitted consumers in the way in which it was sold. Cetainly not water, energy or transport. And widespread foreign ownership is a separate set of risks & vulnerabilities you would not place in the credit column. I'm with Eric - it depends.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff