Martin Rundkvist3d ago

Hey private enterprise enthusiasts. You believe that the public sector can save money by handing over utilities to companies, which are inherently more efficient.

Here's why this doesn't work.

You have to pay someone to monitor the private companies. Because they have no incentive to deliver what they promised. They always cut corners in the name of profit. And that monitoring eats the savings you hoped for. While you have no control over your utilities.

#capitalism

Show threadZimmie2d ago
@mrundkvist Profit-based companies inherently *can’t be* more efficient. They need to extract some profit, after all, and that money has to come from somewhere! Either price goes up, output goes down, or both. There is no fourth option.
Show threadMartin Rundkvist
@bob_zim
But you do know how their argument goes? Innovation?
Jun 25 at 1:19pmWeb
Show threadZimmie2d ago
@mrundkvist Sure, I know the arguments, but they have never made the least bit of sense. Profit is surplus value. That’s literally the first lesson of market economics. We teach it to children in school. If you don’t extract that value, price goes down or output goes up. Holding output constant, extracting profit, and saving money is transparently impossible.
Show threadMartin Rundkvist2d ago

@bob_zim
I don't believe much in the cost-reducing power of innovation. But Conservatives and Free Market Liberals do. So that's their argument. It's not illogical. Just empirically disproven in the field of municipal utilities.

#econ

Show threadZimmie2d ago

@mrundkvist Empirically disproven by basic mathematics. And this isn’t like “Male/female is basic biology!” which is expanded later. Profit doesn’t get more subtle than “surplus value”. There are things to be learned from private industry, but efficiency definitely isn’t one of them.

People who believe privatizing government services can improve the service are economically illiterate. And sure, tons of people are economically illiterate.

Reminds me of how many businesses went “Moving to AWS will save us so much money!”, then they were shocked their ongoing bills were 20x as high. Like they thought *Amazon*—one of the biggest storefronts in history—is a charity.

Show threadbogosity2d ago
@mrundkvist @bob_zim
Usually it's the cheapest "innovation", and it holds true for any for-profit business. That's why they need government oversight to prevent innovations like putting sawdust in bread to reduce the amount of flour needed.