tian2992
Anon OpinPrivatisation doesn't create competition. The free market doesn't lower prices. All it does is degrade the service because the profits go to shareholders and company execs, not back into the business for improvement. All the selling points of privatisation are fucking lies.
Dreldragon Drakedon Douay@anon_opin something something Marx was right all along?
Usona HomaranoNo, comrade, TSA Gold Plus will have multiple competing firms putting in the lowest bid to touch your junk.
Lot⁴⁹@anon_opin Particularly with natural monopolies like utility or mail service.
David Chisnall (*Now with 50% more sarcasm!*)Mail is slightly different. It isn’t a natural monopoly because the roads that the deliveries run over are publicly owned and maintained so the cost of starting a new delivery company is low. Switzerland has the same model for Internet and apparently it works very well: three fibres go from your house to the exchange, but companies can compete to provide you with the service that runs over them.
The problem with privatising delivery is that we learned a long time ago that completely disconnecting people from the postal service causes huge problems and so you need at least one delivery operator with a universal service guarantee. And that has to come with some price control that makes delivering to some people unprofitable.
If the price setting is centrally controlled, there isn’t much scope for competition. There are a lot of economies of scale and the largest player will win. This will tend towards monopoly.
If the new players are exempt from the universal service obligations then they will focus exclusively on the profitable areas. This takes away business from the operator that has to cover all addresses. This makes them start to lose money. If they are privatised, they will go bankrupt and need bailing out. If they are public, they will become a revenue sink, indirectly subsidising the profitable companies.
I would love to see last-mile delivery taken back into public ownership. We often get half a dozen or more delivery vehicles on our road in a day, damaging the road. We’ve had a single order from one company shipped via three different couriers and end up arriving on the same day, spread out over a few hours. Requiring the Royal Mail to accept next-day and same-day (if arriving sufficiently early) parcels at all of their distribution centres and giving them back their delivery monopoly would improve efficiency enormously.
foldworks@david_chisnall @12thRITS @anon_opin An Open University tutor told a memorable anecdote about externality.
He worked for Royal Mail and saw that private couriers would take the easy profitable business (like deliveries in cities) but put expensive deliveries in the public postbox and let Royal take the hit (to remote addresses like the Outer Hebrides, for example).
Neo Ehproque@anon_opin Anon Fact
Mike Taylor 🦕@anon_opin An actual free market DOES lower prices. But you can't get a free market without regulation.
Meneer de Bruin 🚂🍉🔻@mike @anon_opin Nope. Not in all cases, services/products you do not want to leave to 'the market': Electricity, water, gas, roads, postal services, taxes, hospitals, public transport, police, military, ...
@MeneerDeBruin @anon_opin Of course. I'd add health and education.
Ian Tindale@anon_opin Privatisation does prompt a little bit of competition in areas where there was none but should have been some, and this competition does cause otherwise slow and expensive and primitive offerings from organisations who would rather sit on their arses reaping the rewards with little effort into having to offer a better product at better prices by developing improved processes and supply chains.
Otherwise it’d be like soviet-era days of just providing a quota, most product out of the door wouldn’t even work because of poor manufacture, nonexistent testing, and drunkenness on Fridays. Contrast that with the competition involved in flash memory cards, if it weren’t for competitive process improvements we’d still be limited to 16MB cards at two hundred quid each.
However, competition isn’t an on-off switch, unlike the perceptions of most politicians and some past prime ministers. There’s a small area, a tiny band, a little portion of the curve, where underneath this things definitely could be improved because there’s no competition and the suppliers know this. Competition could kill a startup simply because there’s actual competition, which is unsurvivable - if there wasn’t competition, they’d have a chance of getting on their feet and coming up with the next model and the next, by which time they might have something worthwhile for the world.
Once this stage is arrived at, there’s the part of the curve where competition works. All the suppliers of a product or service are trying to ‘one-up’ their competitors across the street, and the state-of-the-art improves considerably, the prices satisfy consumers, the overall design optimises and the style improves. Happy days, if a little hectic and sleepless.
After more and more competition like this, however, the rewards are not there in such abundance, the price race makes the products suffer, the products sourcing switches to the cheapest possible which affects reliability or longevity of the product, the only levers left to adjust are the brand image and the promises conveyed through advertising. Ultimately the manufacturers or suppliers cave in to economic pressure and make redundancies and then get bought out by a faceless bigger organisation, then broken up, the brand name gets sold on as the only valuable part that remains, and so we have 1950s, 60s, 70s, 80s brand names on cheap nasty worthless products today with a ‘known’ brand name stuck on them. Competition killed them long ago.
Competition is good – but it’s not linear and it’s not from zero to full of the curve, it’s only valid for a small portion of the curve, which is typically down in the bottom 2nd quartile of it or somewhere like that. Before it and after it, it’s poison.
Otherwise it’d be like soviet-era days of just providing a quota, most product out of the door wouldn’t even work because of poor manufacture, nonexistent testing, and drunkenness on Fridays. Contrast that with the competition involved in flash memory cards, if it weren’t for competitive process improvements we’d still be limited to 16MB cards at two hundred quid each.
However, competition isn’t an on-off switch, unlike the perceptions of most politicians and some past prime ministers. There’s a small area, a tiny band, a little portion of the curve, where underneath this things definitely could be improved because there’s no competition and the suppliers know this. Competition could kill a startup simply because there’s actual competition, which is unsurvivable - if there wasn’t competition, they’d have a chance of getting on their feet and coming up with the next model and the next, by which time they might have something worthwhile for the world.
Once this stage is arrived at, there’s the part of the curve where competition works. All the suppliers of a product or service are trying to ‘one-up’ their competitors across the street, and the state-of-the-art improves considerably, the prices satisfy consumers, the overall design optimises and the style improves. Happy days, if a little hectic and sleepless.
After more and more competition like this, however, the rewards are not there in such abundance, the price race makes the products suffer, the products sourcing switches to the cheapest possible which affects reliability or longevity of the product, the only levers left to adjust are the brand image and the promises conveyed through advertising. Ultimately the manufacturers or suppliers cave in to economic pressure and make redundancies and then get bought out by a faceless bigger organisation, then broken up, the brand name gets sold on as the only valuable part that remains, and so we have 1950s, 60s, 70s, 80s brand names on cheap nasty worthless products today with a ‘known’ brand name stuck on them. Competition killed them long ago.
Competition is good – but it’s not linear and it’s not from zero to full of the curve, it’s only valid for a small portion of the curve, which is typically down in the bottom 2nd quartile of it or somewhere like that. Before it and after it, it’s poison.
L'égrégore André ꕭꕬ@u0421793 @anon_opin Which areas?
RegThe biggest problem with privatisation was that most of the targeted industries were natural monopolies providing essential services and infrastructure where competition either can't exist or has to be artificially created at the expense of economies of scale and efficiency.
Even industries where competition does exist are often subject to cartels, because the only objective for private business is profit.