Comment by SoftTalker
6 months ago
If a private company builds infrastructure with their profits, should it be owned by the customers "who paid for it"?
6 months ago
If a private company builds infrastructure with their profits, should it be owned by the customers "who paid for it"?
My local electricity infrastructure provider is a private company, with the twist that all residents within their area are also automatically shareholders.
They operate "for profit", but profits are distributed amongst shareholders in the form of reduced bills, ie last year we didn't get bills for electricity transport for december, and the year before that there were no bills from august through december.
The "for profit" part pays infrastructure upgrades, so some years we pay the normal prices if there is infrastructure work being done, which in the end benefits all shareholders, meaning me (and other users).
Do you live in Auckland?
It sounds similar to the system I encountered there. I don’t remember all the details, I was only renting for a year.
It didn’t sound like it was NZ wide.
I live in Texas and I also have this system
Why are we letting private companies own public infrastructure?
Politicians lack the will to push for public utilities. That requires asking voters to go along with the government taking on financing, planning, operations, customer service, and being the bad guys who raise prices. It's easier to point to companies as the bad guys who raised electric rates, likely sparked a wildfire, or are taking so long to fix an outage.
The problem is this is set up as a dichotomy. Either you have privately owned infrastructure (and then a private monopoly), or make the utility company a government entity which then becomes an unaccountable bureaucracy captured by public sector unions etc.
Whereas the better thing to do is have the government own the physical plant (utility poles and conduits etc.) and then hire private contractors -- large numbers of small entities, not small numbers of large entities -- to do all the actual work of operating and maintaining it.
Make each contracted role simple and fungible so that none of them are too big to fail and they're all in competition with each other.
You don't want a public monopoly. You don't want a private monopoly. But who says those are the only options?
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It's either owned by a private company, or public (owned by municipality or similar).
Government bureaucrats are among the hardest to fire, because they rate their own excellence.
Knowing this, there is probably a way to make things better…
Because our political system is rigged to allow the wealthy to make the rules.
Because public operation of infrastructure has often not gone well. And no matter who owns it, there is a cost of capital.
The interstate road system in the US is world class. Airports and ports are publicly owned, and seem to function very well in most cases. Education including the infrastructure and buildings is managed incredibly well in many jurisdictions. There are many, many examples of well run public infrastructure. We only notice the failures because 1. they are an easy punching bag 2. they are noteworthy because we expect them not to fail.
It is hardly a maxim that public operation of infrastructure is incompetent, and I would argue that "often" is not the right word.
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This feels like Churchill's democracy quote applies:
"It has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time"
It has been said that public operation of infrastructure is the worst form of operation of infrastructure except all those other forms that have been tried from time to time.
It's gone fine. It's always fun to hear about the wonders of privatization where everyone conveniently ignores that the vast majority of private businesses fail miserably. Over 50 percent in five years. Mostly due to mismanagement of money, the thing they are supposed to be better at. The rate is even higher (80-90 percent) if we were to look at small businesses.
They do have better PR though.
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> Because public operation of infrastructure has often not gone well.
Kindly define "not well" compared to privately owned infrastructure.
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You can have competing operators bid for the contract to operate without owning.
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Could you list some examples of where public infra hasn't "gone well"? Because from my own view of things it's the exact opposite, whenever anything became privatized that shouldn't have been (rail, water, electricity, public transportation, healthcare) it inevitably follows the same churn as all the other things getting enshittified continuously.
The national railway in the Netherlands is a great example of this. They've privatized but with gov't subsidies, yet there's less trains, less people getting moved by the remaining trains, ticket prices skyrocketing YoY, worse service, rail workers getting shafted and basically being forced to go on strike in order to improve conditions. They're (NS) a monopoly too and handle something like 95% of all rail traffic within the Netherlands.
I believe the UK is going through a similar issue, where their railways are now privatized and in turn it's lead to increasingly worse service despite there being plenty of competition in the market in the form of many rail companies.
This lolbert fantasy of the "free" market being good for literally everything, including critical public infrastructure is a complete farce.
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Municipal bonds are the cheapest capital available anywhere.
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Yes, of course it should be. You point out of of theain flaws in our system. Those who actually produce things and pay for them never get any ownership. They remain disadvantaged dispite their contributions.
They pay for the thing they get. They exchanged money for product or service. Anyone can start a company and contribute the money required for that company.
> Anyone can start a company and contribute the money required for that company.
No, anyone can't. That's the point. If the money is siphoned out of the lower class, then they have no capital (or free time) to start a business. They're barely getting by. It's a positive feedback loop in both directions (up and down). Rich get rich, poor get poorer (in general).
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If you have a publicly supported monopoly you shouldn't have a private company.
They are given a de facto monopoly. It’s weird that a private company is building and owning public utilities, but if they’re going to be granted a monopoly, then it’s not unreasonable for that privilege to come at a price.
It does come at a price: they have to pay corporation tax.
You mean the one that every corp has to pay, regardless of monopoly status? Or something else?
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It’s not paid for “with their profits”, it’s a passthru charge directly onto customers’ monthly bills.
Yes
Yes