"sean neill" <[EMAIL PROTECTED]> wrote: >> If the government feels poorer folk can't afford services they need, >> it could give them money to pay for them. A much more sensible use of >> tax money than giving the operators subsidies and telling them to >> lower their prices for everyone, including the majority who can afford >> to pay. >> >IMHO the flaw here is the difficulty of getting consent from taxpayers >who are not eligible for the benefit, for targeted support to a >circumscribed group. If I can afford to pay, and am paying partly >through tax-based subsidy and partly directly, at least I feel I am >getting some benefit. If I am paying the same amount, and know the >person next to me is getting a free ride because of tax subsidy, I will >vote for the party which offers to give me back my tax subsidy.
Although I agree with Mr Barnum about the general nous of the public, I actually think that most taxpayers will look at the net cost to each. If it puts less on his taxes to give money to the poor than to subsidise services to everyone, I think he will go for the former. In the extreme, think of it as an insurance premium. If the poor are ground down to the point of desparation, they will revolt. That will cost the non-poor a lot more (each) than giving them (each) enough money to get by on. >A second flaw with privatisation is that operators will only provide >what it pays to provide. For example, on the canal system, I doubt if >any of the BCN system except for the bit round Gas Street Basin is >economic, and the same applies to e.g. the Huddersfield, Basingstoke >etc. I think that is more appropriately part of the discussion about using public money to provide a grant to navigation authorities to cover the difference between the cost of operating the waterways and the revenue they can (by any system) obtain from users. The justification is that the local public benefits from the existence of the local waterways. [EMAIL PROTECTED] wrote: >The private operators will charge the market price, and there could >even be competition which would keep that price down. >What I term a 'plausible falsehood'. The same argument was used for >pensions, health services, bus services and train services and any similar >privatisation. And for electricity, phones, airlines, etc. where exactly what I am suggesting actually happened? Whereas there is no real competition for health services, and thus it runs just as badly as you would expect a producer-controlled monopoly would, and the government prevents the rail companies from setting market-clearing ticket prices so the tubes are health hazards at rush hours ... >Private operators are there to make a profit and to screw as much out of the >public (or public purse) as they can. No, no <holds face> (I really think it is time that basic economics be made part of the UK school curriculum) Profit comes (only) from the margin, i.e. the difference between the cost to the provider of providing the service and the price the user of the service is prepared to pay. You don't "screw out" a profit" - it is either there, or it isn't. The margin falls (in the limit, to the difference related to the production cost of the second-most-efficient provider) if there are competitors. It rises as competition reduces. Too many Brits seem to think that price = cost + profit, implying that if the (noble and non-profit) public provides the service, the profit element can be eliminated and the customer will pay less. That belief is seriously false. Cost determines only whether the service will be provided at all (i.e. if customers are willing to pay more than cost). >Where they fail to make the profits >their shareholders expect them to make, the private suppliers go under or >merge >with other suppliers. When they go under the government (or you and me in >financial terms) picks up the pieces having paid over the odds for the >setting >up of the piratisation because this is where the cost is highest. Sorry, but this makes no sense to me. The cost of setting up a business is the cost of setting up a business, whether that involves starting from scratch or buying a going concern from elsewhere (e.g. from the government). >Where the private supplier does stay in business, they carve up the services >so that competing suppliers do not actually compete - while not actually >creating a cartel they make sure that they do not usually compete head-on. You mean like on railways, where the government prevents competition? If the government truly got out of the way, this would seldom happen. >Instead of a public monopoly we then have a private one, or series of >regional >ones; instead of an inefficient public service answerable to politicians we >have >a higher priced one of dubious quality that is answerable to nobody except >the shareholders. A very serious point-missing. The private provider is answerable directly to the customers, all the time. If it is providing an unacceptable service, or too pricey a one, it will lose customers and thus revenue. *That* is real accountability. The ability to (not) vote for a politician pales into (almost) insignificance in comparison. > >The only benefits we seem to get are new ways of running the service and >different ideas about how to provide what the public wants (or thinks it >wants) >- but even these benefits are doubtful when you examine them closely. This is how society evolves. A lot of failures, but some successes. Have you noticed how innovative and risk-taking government is (not)? Adrian Adrian Stott 07956-299966
