Contrast this with today's digital services: if Uber gets rich providing hailing intermediation, all that wealth goes straight to the headquarter, with the local economy getting nothing besides the drivers' share which Uber will inevitably push down to subsistence level. Local inefficiency on the other hand would at least keep the money circulating locally.
No, its just that -- with the 1980s and beyond push for privatizing governments services -- we now have experience as well as pro-corporate astract theory. And while experience has sometimes shown some benefits, its shown a lot of problems with privatization, as well. (Including that it often promotes a particularly intense, single-beneficiary variation on regulatory capture.)
Unions and pensions and oversight are good things that help ensure people are treated fairly (or at least, better than they otherwise would be). I want my tax dollars spent giving locals a decent retirement, and not going into some California VC's portfolio.
And "no easy allocation of resources" strikes me as a good thing as well. This is public infrastructure. People depend on this for their daily lives. The last thing we want is for it to be easily unallocated.
So for example, if the demographics of the community change such that transportation needs change, or technology changes (automation of many kinds) meaning fewer employees needed or different kinds of employees are needed, it becomes hard to reflect those needs in the workforce because of the union agreements.
No. Stuff like UK rail privatization or US electricity deregulation happened.
It's just that today, even in die-hard free market countries, people have come to realize that infrastructure and private/for-profit don't mix well most of the time.
A necessary part of a free market is that consumers have choice. In the franchised UK rail system, there are very few routes on which one can choose between different suppliers. The franchise system also imposes huge barriers to new entrants to the market. Therefore, there is little incentive for companies, having won the franchise, to improve the service more than the minimum necessary.
The core infrastructure of the UK rail network is still owned and run by Network Rail, which is publicly owned, so the core inefficiencies remain.
The private operators compete for the contract to run a franchise for a couple of years. The "choice" is not for the passenger, the choice is for the government to decide which private company to give the franchise, to give access to the infrastructure, and to provide subsidies. The competition basically happens at the bidding level.
NYC is a great example. In exchange for access, two companies signed contracts with the city that limited prices to $0.05. They built a large portion of the existing lines and made a good chunk of change.
But the City wanted to own them, and inflation stepped into the picture decades later. Turns out, a nickel wasn't worth the same anymore and couldn't cover costs. Rather than allow prices to rise, the City bought up the two companies while building a third system (the IND). It also doubled fares after unifying. Hmm....
Then it put out an elected board to vote on fare increases. Guess what the winning stance was? No increase. Eventually the system decayed as the subsidies didn't cover maintenance and deferred maintenance eventually became a major issue. The system today still has 1930s and 50s technology.
If anything, the US public transit systems (which had similar stories in other cities) are evidence against American governments running infrastructure.
We are underfunding other important pieces of infrastructure from roads to bridges to sewers, so the next few decades should be fun as cheaply built suburbs deal with infrastructure costs rising.
In any case, the two private systems are badly designed relative to one another: bad transfers, redundancies. The IND built by the public is overall much better designed.
The fact that both the private and public where able to build giant subway systems in the 10s-40s but it all fell apart after, should give some idea that it wasn't anything inherent to being public or private that allowed building it and made it difficult later, but other factors.
Oh, and fares have increased many many times. Many people always complain when it does.
And NYC is still building new subway lines. Construction is underway right now on a new east side line.
It's too bad. Because singapore, which arguably has the world's best (or maybe second best, after Seoul) public transit system, is basically an entirely privatized system.
The public Land Transport Authority built and still owns most of the assets, and enacts strong regulation for the duopoly of service providers (SBS and SMRT) - not only on service levels, but also on operational processes. Even so, there's awkward UX quirks on the boundaries between lines run by the different companies.
If anything, the Singapore MRT runs closer in spirit to a US taxicab system - that is, surprisingly regulated on a global scale.
Comfortdelgro is certainly widely owned - but they're into busses and taxi mainly, not infra heavy stuff like subways.
For various reasons, Governments will make state owned companies publically traded. That doesn't mean they're not going to toe the government line in decisions if it has majority stake.
I wasn't aware that SMRT was bought out by the government recently (the last time I rode the MRT, last year, it was still private). It doesn't seem that the buyout was orchestrated as some sort of bailout, especially given that the systems seem to be solvent enough to support at least one for-profit. It, then, remains to be seen if refolding SMRT will result in a net degradation or net improvement in services... This will be an interesting 'control' experiment.
The UK STILL has not solved its problem of wrong tracks and seemingly never will, trains are still absurdly expensive compared to cars and the government still ploughs billions of pounds into what is supposed to be a "privatised" system. Its fucked.
Our only future transport hope in this country is automated cars.
That is often true, but the efficiency comes from competition in a free market, not the ownership of the service provider.
The government usually has a monopoly, so there is little pressure to be efficient other than the personal motivation of some government employees to improve life in their city.
If there are instead 5 service providers who compete for customers, then they are forced to be efficient or lose their business.
But if there is just one commercial company with an effective monopoly - due to mergers between all providers in an area, poorly structured contracts, or plain old corruption - then there is no pressure to be efficient either.
I dunno. State schools are only sometimes and somewhat cheaper than private counterparts, USPS is sometimes better in terms of price + speed, but many times it loses to UPS and FedEx, and anyone extolling the virtue of government-run service should get an option to change their medical provider to a VA hospital and report back in a few years.
The uber thing is a good choice for Innisfil. They wouldn't have the money to roll their own ride share, and they can't afford the infrastructure to create a bus system.
But the interesting thing is that absolutely no one is proposing that; what's being proposed is Medicare-for-all, where you get your choice of providers (pretty much any existing provider), and you pay the government for low-overhead insurance through your taxes.
It's kind of a really obvious rhetorical bait and switch, but it seems to resonate with people.
Organizations like NASA or the entire US military apparatus are also government-run, but you never hear free-market conservatives argue that US military sucks or is inefficient.
On the other hand, there are plenty of private organizations that are universally hated, like Comcast, American Airlines, or Bank of America, which are also huge, bloated, and have tons of waste internally.
NASA just gave up on making rockets and arguably going private is going well for them.
US military is quite famous for inefficiency. F35, B2, the 100 million dollar gas station in Iraq etc. Given the mess in the middle east, effectiveness is questionable as well.
US military is pretty effective in its primary function, but may not work as well when required to adjust to something like policing the population, sure. But that's a separate discussion.
But yeah, those were just a couple of examples. There are plenty others.
- University of California system, along with many other state universities.
- Various three-letter spy agencies
- Your local fire department etc..
I'd say that it doesn't matter whether any given organization is private or public. What matters is enough funding and semi-competent management.
Those are private industry contracts.
Are there any policies that were built this way?
However, you can never really control for differences between the states, which means weak predictive value, and it's easy to argue about results. And given that the policies we're talking about are inherently political, facts and evidence don't necessarily contribute to policymaking.
[0]: https://en.wikipedia.org/wiki/Laboratories_of_democracy
A good government option shouldn't require ANY funding at all. It should pay for itself.
The government may wish to
- provide a service that pays for itself only indirectly in the long run like investing in its citizenry and their well being.
- price a service below cost to enable the citizens who most need the service to actually benefit from it
- serve the entire citizenry not just those profitable to serve
What these have in common is that they represent a transfer of value from those who have more to society as a whole. This is pretty much how every decent functional society in existence works at scale.
Virtually nothing the government does "pays for itself" because economic systems while useful are so bizarrely insufficient by themselves that I'm not sure I have words to express it. They suffer from insufficient information, outright corruption and outright failure to encode most of what is most worthwhile in dollars, cents, and incentives.
Those who believe in capitalism alone seem to be appealing to some bizarre pure state of nature that has never existed will never exist. Meanwhile ignoring the fact that everything about capitalism as practiced anywhere on Earth is a wholly artificial mashup of perverse incentives, short time thinking, rules, regulations, and customs based in part of what can be exploited, in part on what people think is right, and in part on what people think is useful.
Given that capitalism is as artificial construct as opposed to some ideal state its easy to argue that we the people ought to use our political power transfer wealth from the haves to increase the health and well being of society as a whole.
Because of this government options will often be aligned with what society as a whole can afford and will benefit from in the long run as opposed to what those directly benefiting right now can support out of pocket.
It has since been proved time and time again that replacing government workers with private entities provides a worse service, which is more expensive.
You literally cannot make something more profitable than the government. More efficient, yes, but since it has no profitability goal, it's effectively perfect in that regard. Improve your services, don't privatize them.
That mindset seems to have changed. I wonder if the companies are different (greedier?) now, governments and non-profits are more efficient or is this purely a perception shift.