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Forums - General Discussion - Privatise all national water supplies to pay off debts?

Galaki said:

Why stop there? Privatize air, too.


Damn! some spanish woman already claimed the sun...

http://news.yahoo.com/s/afp/20101126/od_afp/spainsunoffbeat



 

Face the future.. Gamecenter ID: nikkom_nl (oh no he didn't!!) 

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Sorry, I haven't read any replies yet, just want to leave a quick reply myself. The problem I see is the supplying water to those that can't afford it once it's privatised. You can't let people go without water, and so you'll have to invent some kind of benefit scheme to pay for those who earn under a certain amount. Before you know it the government is spending almost as much as they would if they just had an outright public water service to begin with. Only now you're dealing with many more parties and your logisitcs apply to individual households as opposed to towns and cities, which all leads to a far less efficient service provided for less people.

I would think of it as a bit like medicare and medicaid.



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numonex said:
...

Water privatisation worked effectively under Margaret Thatcher and Conservative governments. Water was sold off and private companies competed and delivered water to private consumers effectively. Water has a price and the free market system can deliver water. Water prices are determined by supply and demand. 

Water companies are regional monopolies and there is no competition in many areas. I can't change supplier. Prices go up whenever the company feels like it.

Privatisation is always more efficient than any Government monopoly. More competition, more choice for consumers and freedom. Private corporations make lots of profits out of selling water to consumers. Most people are better off with privatisation and that is a simple fact. 

If there IS competition, yes. For water and other utlities, effective competition canot occur as there isn't independence of the supply chain (Sainsbury's and Tesco don't share the shop with each other). "Most people" pay more when there's a private market with little competition.

Telephone services and electricity are better in the hands of private companies delivering services to consumers at the market price.

Really? That's why British Gas is delivering an insane profit margin this year and why they pt prices up whether the wholesale cost of electricity rises OR falls? Telephone services are a similar joke here, we pay so much for internet compared to other countries, at lower speeds too.

Same applies to water: supply and demand determines water prices on a free market system.

Unless the companies act as a cartel to raise prices in sync, which they clearly do in the British market.

Producers/suppliers are happy and consumers are happy when they buy water from private enterprises.

Same with government enterprises. People are happy with those too. It just comes down to which is cheaper. And you're still ignoring the poor maintenence of systems by private utlities. Look up the Thames Water leaking.

http://www.dailymail.co.uk/news/article-391771/Thames-Water-misses-leak-targets--profits-up.html

So what the Socialists/Communists complained about water being privatised. There is no such thing as a free lunch. The same principle applies to water supplies. Everything has a price and is up for sale. Economics is basic logic, it is not rocket science.

I never said that. Economics is fine, it says a free market will work if there is effective competition. The UK over the last 20 years has proven that there is NOT effective competition. Look at the rail disasters. Government subsidies are larger than running costs, and yet ticket prices are vastly higher in real terms than before the sell-off. Worst of both worlds.

What I am saying is logical and right. The emphasis is on you to disprove my economic explanation that is based on logic.

The emphasis is on you to prove there is effective competition in those markets. I've said there isn't and have a few examples. I AGREE with you that, if it really was a free market, it would work. However it is not.

Let's say a bottle of coke at the supermarket. You pay the price at the check out and the coke is now yours to consume. The same principle should apply to all water supplies. If you want water you must pay for it. The free market should determine the price of water. Supplier sends you a bill for water and you pay your water bill.  That sounds like a fair deal. 

Unless the cartel sets unreasonable prices, or the government subsidy is huge, or it is a monopoly condition, or maintenence is poor.

Current UK utlity prices DO NOT reflect supply and demand, they go up regardless.





highwaystar101 said:

Sorry, I haven't read any replies yet, just want to leave a quick reply myself. The problem I see is the supplying water to those that can't afford it once it's privatised. You can't let people go without water, and so you'll have to invent some kind of benefit scheme to pay for those who earn under a certain amount. Before you know it the government is spending almost as much as they would if they just had an outright public water service to begin with. Only now you're dealing with many more parties and your logisitcs apply to individual households as opposed to towns and cities, which all leads to a far less efficient service provided for less people.

I would think of it as a bit like medicare and medicaid.

The private corporations need to make a living. Private corporations have families to feed and bills to pay. CEOs deserve their huge salaries because they work hard and provide employment and incur business risk. Business owners incur huge risks to run their businesses. Too bad a poor family misses out on  water. Life is not meant to be easy. 

Margaret Thatcher and her supporters would support this view/opinion on water privatisation. Most people in the UK benefited from Thatcher's water privatisation. Water prices were determined by free market forces and there was choice and competition. 

Forget about the government, free market forces should determine the price of everything. Supply and demand mechanisms determine the price of a commodity that is traded on a free market. There is no such thing in life as a free lunch. 

Free market capitalism and the majority of people are better off when a government monopoly is privatised and free choice, competition is encouraged. Support freedom and free trade. 



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Of all the things you can privatize why water?



non-gravity said:

Of all the things you can privatize why water?


Because it leads to controversial debate



numonex said:
...

The private corporations need to make a living. Private corporations have families to feed and bills to pay. CEOs deserve their huge salaries because they work hard and provide employment and incur business risk. Business owners incur huge risks to run their businesses. Too bad a poor family misses out on  water. Life is not meant to be easy. 


OK, you are actually crazy. I was trying to have a reasoned debate up to this point, but not acknowledging water as a universal human right is not something I can argue around.

The free market is not magic fairy dust. It is a good solution (not perfect) in many circumstances, and not good in others. Making things a fee market conditions are not conducive will not magicaly fix things. You have yet to address anything in my post, instead repeating your 'free market makes people happy' mantra.

"Free market capitalism and the majority of people are better off when a government monopoly is privatised and free choice, competition is encouraged. Support freedom and free trade. "

Yes, WHERE IT WORKS. I am arguing that it does not work in X situation, not that it isn't a bad idea for other things.



numonex said:
HappySqurriel said:

What is so wrong with governments cutting spending, and using the savings to pay down debt?

Cutting spending is one way off reducing government spending by cutting inefficient public sector jobs and privatising public services for short term funds to pay back debt. Transport, utilities, national parks and government housing can be sold off to the highest bidder. Reduce public sector, increase the private sector and everyone is better off. 

Public assets can be sold off by governments as well to multi-national companies for the highest bidder. Privatisation offers freedom and choice to consumers. More competition can be encouraged by selling off public assets to multiple competing multi-national companies. Multiple companies can compete freely against each supplying water to consumers on a free market. 


While it is not (necessarily) a common thought for economists sometimes a benign monopoly is the most inexpensive and efficient way to deliver goods and/or services. These are typically in areas where building larger infrastructure results in long-term cost savings due to economies of scale, and the recurring costs are relatively small compared to the initial start up costs of a facility. Classic examples of this are the electrical and water utilities.

Unlike most other government services, the user-fees of public utilities tends to mean that they are not a drain on government finances; and quite regularly pull in profits. If the government privatizes these utilities without reducing spending elsewhere they will receive a one time lump sum payment but their incoming revenue will be lower; and with how massive government deficits are today, it would be a very short period of time before the debt that was "paid down" returned on governmental balance sheets.

There are areas where privatization makes a lot of success (in Alberta we have privatized liquor stores and registry services [read: The DMV] with amazing results) but utilities like water doesn't make sense.

 

 

With that said, the core problem is that governments are spending far too much money and there is little/no reason to believe that they are getting positive results from their spending.



numonex said:
highwaystar101 said:

Sorry, I haven't read any replies yet, just want to leave a quick reply myself. The problem I see is the supplying water to those that can't afford it once it's privatised. You can't let people go without water, and so you'll have to invent some kind of benefit scheme to pay for those who earn under a certain amount. Before you know it the government is spending almost as much as they would if they just had an outright public water service to begin with. Only now you're dealing with many more parties and your logisitcs apply to individual households as opposed to towns and cities, which all leads to a far less efficient service provided for less people.

I would think of it as a bit like medicare and medicaid.

The private corporations need to make a living. Private corporations have families to feed and bills to pay. CEOs deserve their huge salaries because they work hard and provide employment and incur business risk. Business owners incur huge risks to run their businesses. Too bad a poor family misses out on  water. Life is not meant to be easy. 

Margaret Thatcher and her supporters would support this view/opinion on water privatisation. Most people in the UK benefited from Thatcher's water privatisation. Water prices were determined by free market forces and there was choice and competition. 

Forget about the government, free market forces should determine the price of everything. Supply and demand mechanisms determine the price of a commodity that is traded on a free market. There is no such thing in life as a free lunch. 

Free market capitalism and the majority of people are better off when a government monopoly is privatised and free choice, competition is encouraged. Support freedom and free trade. 

*Sigh*

Why is it that when you're speaking to someone with extreme libertarian views the moment you even mention something being ran by the government is a good idea you're branded as an anti-capitalist member of the red army?

You don't need to convince me of why capitalism and a free market is so great. I love capitalism, I benefit from it every day. I don't think I could stand living in a communist country. That said, not everything should be privatised.

Most things, yes; Everything, no.

I think I would be happier living in a country where 90-95% of things are privatised, as opposed to a country where 100% of things are privatised (given that the 5-10% of government ran industry is government ran for a good reason).

-Edit-

sorry, maybe that was a bit harsh. Apologies if I caused offence with the whole "extreme libertarian" comment.