this post was submitted on 03 Dec 2023
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This is something you really can't say one way or the other.
I could cite examples of sick, failing government owned companies that did better under privatization, or simply shouldn't have been governments owned in the first place. On the other hand, I could cite disastrous privatization efforts that should never have happened because they were vital services, or in the national interest. I lived through most of it in the UK when they were privatising stuff left right and centre - some succeeded, others didn't.
And if they stay under the control of government then they need incentivization and means for measuring success. Success doesn't just mean profit but it does mean value and quality of service. And in some ways that would require operating similar to if it were a private company.
In the end privatizing means maximizing for profits and not other quality factors though. It would be great if that would lead to increased value and quality of service, but that's not the reality in our current form of capitalism. Here, it leads to saving costs whereever possible, which finally implies loss of quality.
When it comes to infrastructure like train networks, telecommunication lines or postal services and critical services like hospitals, privatizing is the worst you can do from my point of view. Living in Germany, I see plenty of such examples. Our train service got incredibly worse since it was privatized, hospitals have severe issues on multiple fronts, and let's not forget how we are extremely sucking with the modernization and upkeep of our telecommunication infrastructure.
What do you think have been the successful privatizations in the UK. To my mind none of the big ones. I guess the little ones that work we don't hear too much about.
A lot of subjectivity about what is a success or not, but I would say many nationalised companies (and most were only nationalised for 20-30 years) were absolutely stagnating and/or suffering from widespread union disruption and should have been cut loose. But just picking out a handful of privatisations that went well, I think British Telecom, British Gas & British Airways did much better as privatized companies. Some privatisations went not-so-well - look at steel or coal privatisations or British Rail.
And an example of successful nationalisation - hospitals & doctors were a loose arrangement of private / charitable causes before being nationalised as the NHS. I think we can agree the situation is far better for everyone as a public health service than if it were run for-profit.
I think the way energy markets work is pretty cool, where you have an independent regulatory entity that operates a market, with very strict control measures and compliance monitoring. That way you take advantage of market incentives but you still own it. China's "hold on to the big, free the small" economic policy is interesting as well.