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by derektank 430 days ago
>The basic premise is “what was done for $X dollars with no profit motive can be done for <$X dollars with profit motive doesn’t hold up - you make something private, it wants to make more profit.

No, the basic premise of privatization is that, assuming the product or service has multiple potential customers, private industry can operate at scale which, alongside competition from other companies, drives down the price and the government can purchase it "off the shelf" at the prevailing commercial rate. Those assumptions don't always hold, utilities being a great example of this, but it's not inherently blind or naive to consider privatizing some components of government function. We don't expect the government to operate its own vehicle assembly lines even if the government needs cars; they just go buy one from Ford or GM.

1 comments

I'd add that that, for this calculus to work out in a straightforward way, a competitive market is necessary but not sufficient. You also need other factors that help drive economies of scale, such as the thing in question being a manufactured good that can be sold to many people, or the production requiring expensive and specialized equipment that can be used for more than just that one thing.

I'm no expert, but I'd guess that these factors are more likely to line up in manufacturing and construction, or even R&D, than they are for things like maintenance of specialized IT systems or administration of services.