Sigh

The sheer folly of thinking that the Royal Mail could be privatised was always madness. It is a utility. These need to be in public ownership.

And yes, that does mean I think water, gas, electricity, much of public transport, basic banking and the telecoms infrastrcxutrue does also need to be publicly owned.

What\’s missing is any argument as to why a utility should be in public ownership.

I can understand at least the arguments for having public ownership of natural monopolies. Say, the National Grid. But why electricity generation? There\’re no monopoly issues there. I can also understand (and prefer) the arguments that regulation of such natural monopolies is better than public ownership.

But what arguments are there, other than simple assertion, that utilities should be in public ownership?

We can\’t even use the argument that private business would provide socially sub optimal levels of investment in them: investment in the water companies went up after privatisation. Indeed, that was the very reason they were privatised, the government of the day didn\’t want to have to pay.

We can\’t even say that public companies are more efficient….again, with water, the most efficient system is England, privately owned  but regulated local monopolies, then Wales, a mutually owned company, then Scotland, a government owned company then NI, with direct government supply. This is measuring "efficient " by less wastage, better environmental results and least cost.

So what is the argument that utilities should be in public ownership?

12 thoughts on “Sigh”

  1. We can’t even say that public companies are more efficient….again, with water, the most efficient system is England, privately owned but regulated local monopolies, then Wales, a mutually owned company, then Scotland, a government owned company then NI, with direct government supply. This is measuring “efficient ” by less wastage, better environmental results and least cost.

    This is news to me—do you have a source? I’m surprised thatthe English privates beat the Welsh mutual, but not surprised that either beat the other two.

    I used to favour public ownership for utilities that were natural monopolies, but preferably managed and run at a much more local level, but these days I’m a lot less bothered as long as the results are good.

    I guess the biggest argument against is “profiteering”, a natural monopoly is being given a licence to make a profit and I’m never keen on that sort of thing, but I’ve no problem with non-profit corp seeking investment capital that gives a good return.

    I’m guessing your typo-prone linkee (unless he is that illiterate?) has a gut reaction against private profit, but can’t actually explain why.

    Tim adds: A few years back the Economist did a comparative study of how well the four different ownership /management systems worked. It’s out there somewhere!

  2. Re what MatGB says, yes, a monopoly allows the owner to make super-profits.

    This is not really an issue, provided the licence to that monopoly is auctioned off every few years, then the price paid for the licence = approx. the value of the super-profits, so it’s a self-correcting nearly-100% tax on the super-profits element while retaining the benefit of private competition in providing actual water, gas, banking services, whatever.

  3. Argument ? Easy : then proles like me can wait 6 – 9 months for phones to be installed in order to start a courier business, way back in 1970.

    We had to bribe the state employees to shorten those installation times. And the caff opposite used to be filled with GPO staff who had finished their day’s work waiting to go to clock off hours later.

    Alan Douglas

  4. “what is the argument that utilities should be in public ownership?”
    Native stupidity.

  5. MW,

    The utility bidding could be done based on who will provide the most free product to those in the area rather than who will pay the most to the state.

    i.e. every household gets 10 free liters of water per day…

  6. AC1, exactly.

    For example, some bus routes are loss making, so the licence goes to the bidder who demands the lowest subsidy; others are profit making so the licence goes to the highest bidder.

    Or in your example, the water companies could submit bids for who provides the water at the lowest cost per gallon.

    The auction process has to be done slightly differently depending on which particular monopoly you are looking at.

  7. Apparently Murph thinks he has all the solutions, but, candidly, I’m not so sure!!! I do know he loves the NHS – is health a utility? Actually I am not sure I know what a utility is, but I do know that when Socialist Governments meddle then the chances are that at some point the lights will go out.

    Personally, as a taxpayer, I would quite like the Government to make a buck from selling what is left of the post office, although I am not sure that as a going concern it is worth anything, but if you are against monopoly exploitation then the real answer is to break the monopoly over letters? After all they have already done that with parcels. If they really want to subsidise a letter collection and delivery service then lets see it in a manifesto, although in the current climate I can’t see that high on anyone’s list of priorities.

  8. Post has to be a monopoly otherwise some people will have to face up to the true costs of their choice of location to live, and of course everyone else should be forced to subsidise their lifestyle.

  9. A utility is any service which it is decided is an entitlement to every citizen, at about the same cost, regardless of how much it actually costs to supply them with it. The first example was the telegraph, when it was decided that people who put up with the dense crowding of towns have no more right to a telegraph office than those enjoying the countryside’s wide open spaces.

    A utility is thus that service which is brought into the countryside at far below cost, leading country residences to have town level amenities, thus pushing property values in the countryside beyond that which country dwellers can afford.

    “Utility” is thus a synonym for “second home allowance”.

  10. “when it was decided that people who put up with the dense crowding of towns have no more right to a telegraph office than those enjoying the countryside’s wide open spaces.”

    Ooh get you! Stroppy town dweller alert!

    I think you might be suffering from a case of ‘the grass is always greener’. Try living in the countryside for a bit. Services are SHIT or literally non existant. Costs are higher. Roads are Shite. Public transport is non existant. And that’s in the populous SE, I dread to think what it’s like in _really_ rural areas.

    Having said that, barring your the anti-countryside rant side of your post you have nailed something there!

    Oh how I wish Broadband were a utility by your definition, I’d love a decent net connection…

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