| In my native Norway, we let the public sector and private sector compete to perform public services. I can't say that I've ever seen that the private sector has a clear advantage, otherwise they would already have taken over running everything. In fact I think I know of far more cases of private companies doing considerably worse job than what the public sector did. My city recently switched to a private company for garbage collection e.g. It was an absolutely horrible mess. My home town had a care home for mentally ill people, that got taken over by a private company. They promised to run it cheaper than the government. Except they totally messed up everything. They lost a lot of talented people, who quit due to their poor management. Then they demanded to be paid more than the public solution had charged to do the same job. So not only were they worse, they were also more expensive. Sure these are just anecdotes. But it puts a hole in the claim that the private sector is ALWAYS better. To disprove the notion of always you only need a single counter example. I am not against private companies. Just let them compete on equal terms and prove that they can do the job better. Unfortunately our conservative government is often so ideologically tied to the idea of private always being better than they push for private sector solutions even when a company is not able to demonstrate that they do a better job. In fact almost every case I've seen where a private company does the job cheaper, it is because they give their employees worse conditions and salaries, not because of smarter organization and management. |
An entity that can rig the courts, the laws, and the regulations to its favor has an advantage.
Sure these are just anecdotes. But it puts a hole in the claim that the private sector is ALWAYS better.
Yeah, that's just magical thinking nonsense. You have to take the situation apart and look at what the incentives are. Economic libertarian woo is just as bad as alternative medicine woo. Markets aren't magic. They are a particular kind of distributed machine. It sounds like that mental hospital/home didn't have a competitive environment, or they couldn't have demanded more funding.
In fact almost every case I've seen where a private company does the job cheaper, it is because they give their employees worse conditions and salaries, not because of smarter organization and management.
In Washington state in the US, there were private DMV counters at Fred Meyer. AAA auto insurance can also do some of these functions. The customer experience is almost universally better at the private counters, because the private employees have incentives to make the customer experience pleasant, and the state employees have none. If a company can cheap out on its employees as compared to the state, and the level of service stays the same, then the market worked. If a company does that, and the level of service gets crappier, but the company doesn't face consequences, then the market has not worked. I bet, if you tried hard to prove the null hypothesis and looked for circumstances that would interfere with the market, you'd find them.