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by turbinerneiter 1991 days ago
Can you give me an example for a privatised service that is doing better than the public one?

Because I only have negative examples, where after privatization prizes went up and quality went down.

4 comments

Read up on SELTIC (the Service, Efficiency, and Lower Taxes for Indianapolis Commission) and how their privatization initiatives dramatically improved Indianapolis.

https://bg.hbr.org/1997/05/can-business-really-do-business-w...

https://www.govtech.com/magazines/gt/Indianapolis-Mayor-Step...

https://fcpp.org/2018/05/04/the-indianapolis-champ/

Private health care in Europe.

The cost of public health care is staggering and the quality is abysmal. If you can afford it, if you have something serious and you don't want to wait for ages or get poor equipment or lack of testing, you'll go private even in Europe.

I'd say private health care in the states is very successful as well (high quality and research) but the prices are ridiculously inflated because of government / insurances.

It’s an article of economic faith that private parties will always, by definition, provide superior outcomes with reduced costs.
It’s an article of economic faith that government parties will always, by definition, provide superior outcomes with reduced costs.
I have never encountered your position in the wild.
I highly doubt that.
Perhaps my perspective is skewed by living in the Midwest. By virtue of some private interests, I interact with quite a few very conservative people and perhaps the ‘average man on the street’ is already more culturally conservative than on the coasts.

I maintain my position though. I really have never come across a person in conversation who would take an absolutist position that government action is always going to be better than private enterprise, but the opposite absolutist position is somewhat common.

It say it’s an article of faith because the people I’ve spoken to are not up for discussion about it. They have established their belief and nothing will cast a shadow of doubt upon it.

> I interact with quite a few very conservative people and perhaps the ‘average man on the street’ is already more culturally conservative than on the coasts.

You’re claiming that all these people you’ve met are anarcho-capitalists? Are you under the impression that cultural conservatism means anarcho-capitalism?

> but the opposite absolutist position is somewhat common

You’ve provided no evidence that it is more common. In my experience, the opposite is true.

I also never meet anyone who has such an extreme view on things.

Here in Europe, we believe that certain things should be public: education, roads, health care, social security, basic research, while other things should be private, like smartphones, cars, ...

And I think for most of the things we like public, there is a good evidence that it should be. I.e. Euro style health care systems spend less money per patient while achieving a higher average lifespan when compared to whatever system the US has.

In general, the argument for private systems is that since they have to make a profit, they will be more efficient. In reality, they have to make a profit, which public systems don't have to. Public systems however have the same price pressure than private systems, since people put this pressure up via democracy.

The biggest issues I see is that public systems are less capable of big innovation vs. small process improvements. This can be tackled via the basic research done at public universities + the private sectors work to bring these to market.

Also, if you follow Peter Thiele Line of thought on how every business should strive for monopoly, so they can take monopoly profits and "focus on the product instead of the competition" - a public service that has granted this monopoly by law would be perfect: they have no competition, so they can focus on making the best product, and they don't have to make a profit, which means they can operate at cost. Now, I don't think it's as easy as that, but in the end, if you stop being an extremist, you can mix and match all kinds of system to use what is best, instead of striving for something that is ideologically pure.

tl;dr: I want my smartphone from private companies competing for the best product, I want my water from a public utility.

I grew up in a communist country, everything was state owned, everything was crappy (I mean quality wise) and generally out of stock but hey, it had amazing price (dictated by the state of course), theoretically anyone could afford it. That resulted in huge lines waiting for small stock drops (not unlike the new PC hardware situation with scalpers these days, which is funny) of chicken, electronics, bananas. Of course, it was even better if you knew someone working at those stores, then you'd get a heads up or they'd "reserve" some for you.

So in general I'd say I've seen government fail to run plenty of businesses. A more modern example would be PG&E which is in this weird situation where it's so regulated that it's almost government run but it's technically a private entity. There are also plenty of pure private entities that haven't run well (but at least, such entities end up being bankrupt, a healthy alternative for non-profitable private businesses).

So in my experience, seeing both private and publicly run companies fail, I've started to think that this aspect of it (being privately or publicly controlled) is not what makes the company run well but it's one of the many factors that can contribute to it. I think a more important factor are the interests, skills, will and agenda of those that control it, regardless of whom they answer to (voters or board).

And let's not discard the particularities of each business. Some enjoy a natural monopoly, others face tough competition. These are more important aspects contributing to efficient use of resources than, again, who the CEO answers to.