I have a dozen companies willing to provide me water. All of them will dig a whole, and install a well.
I have a dozen companies willing to provide me water. All of them will dig a whole, and install a well.
The government forcing a water company to share its pipe system is hardly an example of liberal economics.
I can see that tthis argument will go nowhere, and nethier of us will budge. I can only hope that you take me up on that offer to learn about the provision of public goods and market failure.
| ManusJustus said: The government forcing a water company to share its pipe system is hardly an example of liberal economics. |
But that's what the Liberal party is trying to do...
and countries and areas do actually do it.
You called something laughable that actually does happen and works fine.

| Kasz216 said:
You called something laughable that actually does happen and works fine. |
Main Point:
The reason the private market is more efficient than the government in many areas is because of competition and the incentives it creates. When you let a private company operate a monopoly where the government has to tell them what to charge and what quality of good to produce, you destroy every advantage the free market has, and the only thing you pick up is the income of the new owners and investors.
...
It doesnt work fine.
I can think of many instances around the world where there have been massive riots over a private company taking control of water utilities, greatly increasing prices and the government having to take back control of the water. The Cochabamba Water Wars is a good example.
Of course, there wouldnt be a situation in America where the military would have to be called in, but private water companies are still less efficient than publicly owned systems. Which makes sense, considering that the government has to tell the water company how much they can charge and what the quality of water must be (the same thing a public system would do), but the private company has private owners and investors that are looking for a profit whereas the city government is not.
When a private company was able to buy the public water company in my town, the first thing they did was increase the price of water by 25%. I cant say I blame them, thats the way the free market works, but I'd rather spend that money on other things than just handing it to some owner or investor.
ManusJustus said:
It doesnt work fine. I can think of many instances around the world where there have been massive riots over a private company taking control of water utilities, greatly increasing prices and the government having to take back control of the water. The Cochabamba Water Wars is a good example. Of course, there wouldnt be a situation in America where the military would have to be called in, but private water companies are still less efficient than publicly owned systems. Which makes sense, considering that the government has to tell the water company how much they can charge and what the quality of water must be (the same thing a public system would do), but the private company has private owners and investors that are looking for a profit whereas the city government is not. When a private company was able to buy the public water company in my town, the first thing they did was increase the price of water by 25%. I cant say I blame them, thats the way the free market works, but I'd rather spend that money on other things than just handing it to some owner or investor. |
Just because you've had a bad private utility in your area doesn't mean this is the case for all utilities, therefore all private utility companies are bad. I've told you multiple times in this thread that where I live, private water companies are out-doing public ones, because they are mismanaged.
And I must ask: Why'd they increase the price of water by 25% in your area?
Back from the dead, I'm afraid.
I'll be the first one to admit that anecdotal evidence is meaningless in the broader scheme of things, I was just giving an example that I encountered (which also happens to be the norm). The water company increased the price by 25% because the city allowed them to. The city allows them to continually increase their rates because they want the water company to secure funds and increase coverage to areas that aren't a good return on their investment, even though the government already heavily subsidizes them for building new pipe lines. Before being bought, the city government was already in the process of extending coverage, but they did so at less of a cost than the private company.
Other phenomen we have in this type of situation is that fact that political contributions have an affect on operations, namely the government allowing the private company to increase rates. There wont be much of an political uproar if rates increase by a small percentage, so people in charge of government would happily let the water company raise their rates in exchange for contributions to their campaign. This is a common occurence, and it cuts into efficiency. And to be honest, this isn't look down upon that much.
A politican raising rates on water and pocketing the money is a crime and a political career ender, but a politician allowing a private company to raise rates on water and recieving a large contribution from the company is just politics.
Again, we have a monopoly with owners and investors looking for a profit, the government telling the company what price to charge and what quality the product must be, and we have the government giving them money and letting them increase rates so that increasing coverage areas will become profitable enough for the private company to desire to do so. This is not efficient, and the government is still making all the decisions.
It would be like hiring a maid and still cleaning the house yourself.
Please respond to my 'Main Point,' its a pretty basic idea that is well understood in economics. What reasons do you think makes the free market better than the government in some areas?