Comments on naijablog: Why ppp and privatisation is sometimes good, is often bad

The following is a list of the highlights of the U...

2006-04-19T16:46:00.000+01:00

The following is a list of the highlights of the UK privatisation process in the 1980s. Please not that this list is not all-inclusive.

British Aerospace 1981
Cable & Wireless 1981
National Freight Company 1982
British ports 1983
British telecom 1984
Jaguar 1984
British shipbuilders 1985 - 89
British Gas 1986
National Bus Company 1986 - 88
British Airport Authority 1987
British Steel 1987
British rail Engineering 1987
All water and sewage works 1989

Believe me there are many more. Shocking isn't it; how much the state had its inefficient claws on all facets of British life. Obviously, not all of these have been successful, but the great majority of them have.

At the very least, tax payer money isn't being spent on subsidising them. This leaves more money for important things like schools and hospitals.

Please note, the least successful privatisation (British rail) was not carried out by Mrs T. It happened under Major. He undertook roughly as much privatisation as she did. Again, most of them have been succesful.

okay kemi and jeremy, since you both know each oth...

2006-04-19T16:08:00.000+01:00

okay kemi and jeremy, since you both know each other, why don't you continue this debate in private. Unless you are both (especially you kemi) willing to leave out the ad hominem.

Kemi, all the things you accuse me of you are guil...

2006-04-19T15:35:00.000+01:00

Kemi, all the things you accuse me of you are guilty of yourself. You are the first to resort to ad hominem arguments (perhaps you should re-read your posts?)

In response to Sandy, like Kingsley you can only name telecoms and energy as privatisation successes (please don't even try transport, no one in Europe will take you seriously).

For someone who likes to think the private sector and market forces tend to greater organisational efficiencies, I'd like you to outline other sectors (anywhere in the world) where privatisation has worked. I'd also like you to tell me where public sector corruption has scaled the heights (or should I say depths) of an Enron, a Barings or a Parmalat.

Narrowing the argument down to whether public services should be privatised, your key failure is to put forward a convincing argument as to why stock values for shareholders (within a privatised or ppp arrangement) should be valued over stakeholder value - the quality of the services delivered to end users (within a publicly-owned perspective). This is the crucial issue. Rather than bitching about me in your answer, please just give me your argument.

Whenever you do decide to actually read some Marx (start with the Communist Manifesto), you can also read Jacques Attali's new book (he's one of the High Priests I referred to) Bloomberg

Kemi my daily reading includes The Nation, The New...

2006-04-19T12:52:00.000+01:00

Kemi my daily reading includes The Nation, The New York Times, The Sun, The Telegraph, The Times and blogs far too numerous to mention.
I've never heard you quote anything outside the new statesman/guardian. I've never seen you purchase any other paper!You expect me to believe this is your daily reading...? With your ridiculously slow internet access and your claims to be so busy busy busy? Even I barely have time to read more than one thing a day. I suspect you just made that up on the spot 'cos it can't easily be disproved.

You are the one with the cavernous comfort zone, not I.
Oh really? what is my comfort zone, and why do you find it so hard to actually pin me down to any ideology? You are not able to deal with people until you pigeon-hole them. It might be a strength when dealing with some but not with me.

You show your naivety about what's happening with capitalism by ascribing Marx' popularity to socialists (you should try reading more widely dear).
Well, it would have helped if you had a link to these so-called "high priests of capitalism". A name? An article? Anything at all? Surely you don't expect me to believe it's true simply because you said so?

Your argument about separating train from track makes absolutely no sense.
I doubt it.
Normally when someone makes a comment that is nonsensical, you take it apart logically. Instead you're just making sweeping ad hominem attacks. If it really made no sense, then you would have said why. You're just being petulant and bitter.

What we have now whenever there's an accident is one side blaming the other. Corporate manslaughter takes place in the responsibility gap between the two.
That happens ALL the time.
If it didn't, then we wouldn't need courts. These are very thin arguments.
So in every situation where there rare two parties which could possibly take the blame, the solution is to remove one of the parties permanently?

Your argument about corporate manslaughter is null and void because when the enquiries are over, they state quite clearly who or what was at fault.

Sandy said:
I am trying to defend liberal minded 16 year old students about privitsation and I can't come up with other sectors where it has or could work.
Energy, Transport, and Telecoms are the three main areas, and while rail privatisation hasn't been so great, there have been no problems whatsoever with bus privatisation If anything the services are much better than they ever used to be.
There hasn't actually been as much privatisation as Jeremy would like you to think. The Labour government is completely out of its depth when it comes to privatisation. They botch it up whenever they can.

You can always compare private schools to grammars or bog standard comprehensives. There's a world of difference.

To kingsley: Jeremy said the two areas he thinks t...

2006-04-19T10:40:00.000+01:00

To kingsley:

Jeremy said the two areas he thinks that privatisation has been successful is energy and telecoms. Yet, in your defence or privatisation you are only able to quote these two sectors. I think to prove your point why don't you give us a list of areas where privatisation has worked instead of the two industries we are all familar with. Please state the others refered to in your 'amongst others'. Perhaps Kemi can assist in this regard. This is a serious question. I am trying to defend liberal minded 16 year old students about privitsation and I can't come up with other sectors where it has or could work. So your advice would be greatly appreciated.

Sandy.

Kemi my daily reading includes The Nation, The New...

2006-04-19T08:26:00.000+01:00

Kemi my daily reading includes The Nation, The New York Times, The Sun, The Telegraph, The Times and blogs far too numerous to mention. You are the one with the cavernous comfort zone, not I. You show your naivety about what's happening with capitalism by ascribing Marx' popularity to socialists (you should try reading more widely dear). Your argument about separating train from track makes absolutely no sense. What we have now whenever there's an accident is one side blaming the other. Corporate manslaughter takes place in the responsibility gap between the two.

May I recommend a book by Gerard Fairtlough called...

2006-04-18T23:59:00.000+01:00

May I recommend a book by Gerard Fairtlough called The Three Ways of Getting Things Done: Hierarchy, Heterarchy and Responsible Autonomy in Organisation? Why do we have so many schools that cannot teach, police departments that cannot enforce the law, Rail companies that do not operate time tables and so on? Could it be because the way these organisations are set up is incorrect?

Why choose between the NHS and the American private-insurance? The two systems are in use in the UK, but they are not perfect. There are still problems either way. The problem lies in the way the systems are set up. Look at VISA today, Dee Hock asks “where can I buy shares in Visa?” No you cannot, it is a decentralized network that exists to serve its member banks.

The plastic card functions well for most people, why can’t VIRGIN Rail perform a little bit better? There are too many managers too busy fixing organisational problems and NOT fixing the customer’s problems. That’s my why. The same for the NHS, the concept was a very good idea but when you have a huge chunk of ASIA and AFRICA dying to get into tiny UK, you get too many managers fixing too many organisational problems.

In conclusion, please do not bash Margaret Thatcher, she was right for her time, there were far more male idiots in her cabinet fixing perceived organisational problems that they created rather than fixing “arms to Africa” etc.

The subsidies are wrong and artificial. They mess ...

2006-04-18T23:54:00.001+01:00

The subsidies are wrong and artificial. They mess up everyone. They mess up the consumer who ends up paying more, they keep inefficient suppliers in business and they punish hardworking producers. Like many artificial barriers to trade, I believe these barriers will inevitably fall. The European common agricultural policy is one of the greatest travesties of humanity. I think it is very interesting that the greatest proponent of the so-called “non-capitalist way”, France, is the greatest lovers of this monstrosity.

Everyone who hates privatisation cites the NHS and then goes to some unwarranted conclusion from that. It is the role of the state to provide the basic tools with which people can equip themselves so as to help themselves. Excellent education, infrastructure and universal basic health care are key. In this regard, the American system is flawed.

But alas, the behemoth that is the NHS is no ordinary basic health care provider (you know you can now get plastic surgeries on the NHS?). It covers all sorts of provisions that people could probably provide for themselves, cheaper and quicker than at the moment.

Since 2000, £20 Bn has been pumped into the NHS. Where has all the money gone? The doctors have taken the Government to the cleaners, getting a 25% pay rise (inflation is currently 2.1% at the moment).

If the NHS was run more like a business no employee would have been able to achieve that.

Anyway, the NHS is not in crisis; they must learn that my taxes are not a never ending well, so what a few staff gets fired, they still have some 1.2 million left.

The reason why I don't answer all the questions yo...

2006-04-18T23:54:00.000+01:00

The reason why I don't answer all the questions you pose, is because you wrap your arguments in so many straw men that looking for your main point is like searching for a grain of salt in a bowl of spaghetti.

Why separate track from train?
Because in a private system where different companies are running the system, having a single body managing the track is more efficient and safer.
You might as well ask why car manufacturers don't make their own tyres.

The economy can affect things like passenger numbers, train fares, etc to a large extent. Tracks on the other hand, need constant maintenance irrespective of who is using them due to the elements, not the economy.

Even if a new train company started with brand new carriages and staff, it wouldn't have to lay its own track now would it?

Think of the synergies that occur in track maintenance - managing materials, suppliers, think of the effects the weather would have and imagine what fragmented track maintenance a system would look like. Would you prefer it if branson and co were in charge of track management too? It doesn't make sense now, does it?

You only need to think about these things a little bit and the answer becomes obvious.
I don't know, perhaps it's the engineering degeree.

A bit rich that you're asking if I've read my Marx.
You feed yourself on a feeble diet of the New Statesman, Guardian and the BBC. You refuse to challenge yourself or read any media that doesn't already agree with the socialist ideology you cling to so tightly.

I see no difference between you and Daily Mail/ Torygraph addicts who only read things that support their world view.

Try coming out of your comfort zone once in a while, Jeremy. I do it everyday, and it does me a world of good.

I'm pretty sure the people who think the "high priests of capitalism" are finally coming round to Marx, are some delusional socialists.

If you were someone who actually got his information from outside 1 or 2 sources, I'd be inclined to take you a little bit more seriously, but for now... a pinch of salt please.

well Kingsley as a confessed free-market person, h...

2006-04-18T22:57:00.000+01:00

well Kingsley as a confessed free-market person, how can you explain the continued massive agricultural and steel subsidies the US protects itself against the rest of the world with, and how do you see similar such protectionism in the West (such as the EU's refusal to drop its own ludicrous agricultural subsidy system)?

I'm not sure I know what a 'free market' is, or whether there ever has been one. Certainly, those countries and administrations which are alleged to endorse them don't actually have them. Which situation do you prefer, the NHS (with all its problems admittedly) or the American private-insurance-if-you've-got-the-money, die-if-you-aint system?

The bottom line is, if public services are privatised, the logic of the system becomes: maximise shareholder value. If public services are publicly owned, the logic of the system has to be: maximise stakeholder value. It is only the latter system that guarantees that the recipients of the service are given a priority. The former system always leads to cost cutting exercises. That of course is why NHS Trusts up and down the UK are now shedding jobs in the thousands. Blair's privatisation reforms of the NHS have been an utterly failure. No wonder the guy's a sweatbox!

2006-04-18T22:55:00.000+01:00

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Thatcher was a rarity in the political arena. She ...

2006-04-18T22:27:00.000+01:00

Thatcher was a rarity in the political arena. She achieved 20 years ago what others are terriefied to do now. She did things that are a vital necessity but may prove unpopular (see France and Italy to see the opposite).

For every privatised rail with problems, I have telecoms, gas and energy, BP amongst others that were very successful. In addition, over half of people in the UK now participate in the market by owning shares. There is a greater awareness of the free market and its benefits.

She of course had her flaws and the 80's were very painful for many communities, but she did what had to be done. It just makes no sense to dig up coal in the UK if you could dig it up in Poland for half the price. Sooner or later those industries would have closed

I shudder to think what impact China, as we know it, would have had on an unreformed Britain.

Let's just stick with trains to begin. Why is it ...

2006-04-18T20:07:00.000+01:00

Let's just stick with trains to begin. Why is it that Virgin cannot run a decent train service in the x years it has had the contract, whereas BR ran a more-or-less faultless service in my youth? Its partly because Branson came in with zero experience and expertise (but bucketloads of bravado) and has spent a lot of money learning a lot of painful lessons. But its also the complete asaninity of separating stock from track management that has blocked Virgin's progress (still no argument from you on this one - I presume you have none?) None of this has to do with a 36-year old's nostalgia vs a 26-year old's centre-right optimism, everything has to do with Virgin's abysmal performance in comparison to its publicly owned antecedent.

That said, I don't think we are that far apart from what you say in terms of stance on privatisation: perhaps you are less ideologically driven than I assumed. We agree it should be case-by-case, sector by sector (but its only really worked really well in energy and telecoms I reckon). However, where I think I am clearer than you is on this issue of public value. I take public institutions/bodies/organisations (whether directly run by govt or not) to be vital to the moral and cultural health of any society. I therefore think they should be supported and encouraged by govt (whether by subsidy, regulation or otherwise); a basic tenet of Thatcherism/Blairism in contrast is that public institutions should be at the very least privatised. I think you need to make a clearer statement in favour of social/public value either way.

This is what I take to be the dangerous ideology that Africa is being tempted to swallow: in a place like Nigeria, where are there so few trusted and well run public institutions, the ideologically-motivated argument is that they should therefore all be privatised. I think this the wrong approach and a dangerous approach in terms of creating a healthy higher-trust democratic society. How can the general level of trust be increased in a society where all dividends are immediately translated into shareholder (not stakeholder) value?

This notion of social or public value lies outside the parameters of capitalism and necessarily so. I just don't buy this idea that social value has no value in the 21st century. But again I don't see a clear statement in favour of social value from you.

The only other tangible thing to take issue with is your belief that the private sector is somehow more efficient than the public sector. Of course this is undeniably true in Nigeria, but generally, I don't see any great difference between the two forms of organisation. In fact, one could argue that the hierarchical system and centuries-old checks and balances and regulated processes in many civil services around the world mean it is much easier for corruption and inefficiencies to creep into the private sector. As someone who told me once how many hours you actually 'work' in a day for your private sector company (compared to messenging and emailing friends etc), I'm sure you can appreciate even market forces-based organisations can be incredibly inefficient at managing their resources!

Finally, I'm not sure if you've read your Marx. You may know that he's come back in favour of late, by the high priests of capitalism much more than by any straggly old lefties. For all your lambasting me of my socialism, you may want to read up on him and realise he was never anti-capitalist as the lay-view often takes it. He merely thought there would be a stage beyond capitalism (when capitalism would implode thanks to its internal contradictions).

There are indications all around that he may have been the biggest visionary of them all. Capitalism tends to challenge that which it cannot comprehend in its own terms: social value. It is social value which in turn threatens monetary value.

Although its still difficult to discern the changing patterns, the emerging socialisation of the Internet and the ramifications of various forms of open source or peer-to-peer convergence-based media are strengthening the role of such social value, to the consternation of global media monopolies amongst others. In developed information societies, what happens when information and information-processing becomes practically free? Especially when those societies have lost all industrial means of production? Capitalism as it is presently structured begins to lose its internal coherence, and new forms of social structuration emerge..

My stance on privatisation is not ideologically-en...

2006-04-18T18:13:00.000+01:00

My stance on privatisation is not ideologically-entrenched as you assert.

My point is that the government is not often the best entity to provide services. Especially when you move to issues outside the internal and external security sphere.

Why you think that this means that I unequivocally support privatisation is beyond me.

There are many, many things in-between. Not just the stale idea of PPP as it's practised in the UK that is a 1980s solution to a 21st century problem. Some of the things in between do include the faith-based organisations which you continuously sneer at. Yet they were almost 100% responsible for the creation of the Nigerian Middle-Class that is keeping the country from falling apart.

As much as I'd love to engage in your style of arguing (You weren't living here then, or you weren't born then, so you won't understand), I think it's better if you speak directly to any Nigerian above the age of 45 and ask them the contributions that faith-based organisations made to the country before they were taken over by a nanny-state run by buffoons..

Religion was not always the Fundamentalist-Evangelical variety that you see in the country now. It was a lot more benign back in the day.

The nature of state governments is that most of the time they are at best a necessary evil.

The BBC for instance, while not owned by a corporation is not 100% controlled by the government either. Would the whole David Kelly matter have arisen if it were? There are independent bodies which control these things which like it or not, operate closer to a private sector rather than public sector ethos.

Much of the British Museum is run on private charitable donations anyway, so why pretend that it is granted to us by a benevolent state?

It's not a straight choice between public sector or corporation. These issues are not binary, and life is not a zero-sum game.

You are the one who is ideologically entrenched, not me. And your privatisation/Thatcher-bashing only rings true if you feel that the socialist way of looking at the world is the only way that works.

I believe privatisation is good in most but not all cases. Things should be decided on a case-by-case basis, but not dismissed sweepingly as right-wing dogma the way you constantly do.

No, I'm not going to bother asking anybody if the trains were better in the old days.
Old people (and yes, that includes you!) always think that everything was good and glorious back in their day. They are seldom objective about the past.

I hope that skewed way of looking at things never happens to me.

The question is Kemi, what would you NOT privatise...

2006-04-18T15:27:00.000+01:00

The question is Kemi, what would you NOT privatise in any economy? One of the things that is attractive to foreigners about the UK is the strength of its PUBLIC institutions. Think of how attractive the British education system remains for outsiders wishing to better themselves. Think of the great libraries and museums. Think of then thousands of mostly Victorian public parks. Think of the thousands of public bodies. Think of the BBC - which remains to all intents and purposes a public institution. Would you have them all privatised? Would you rather that people had to pay again to visit the British Museum and a private company take over? Given you might answer yes to all these, you would, of course, rather than the NHS itself were sold off I imagine.

And in somewhere like Nigeria, would you rather the present trend of selling off all public assets continues? That of course would mean no public institutions, no public spaces etc and plenty of opportunity for foreign companies to come in and take over. Poor people should, do you think, have to pay for water? If they cannot afford, they should go without. This again would be for ideological reasons, because surely Nigeria is wealthy enough to provide these things to its citizens.

At base, your ideologically entrenched pro-privatisation stance fails to have a category of public value. You would for instance rather Nigeria turns into hundreds of enclaves or private schools and private universities (of course, mostly faith based) - just like Reverend Blair would like for the UK.

Back onto rail: Ask anyone who was around in the 1970's and 1980's whether they prefer taking Virgin to Manchester now, or whether they preferred taking BR back in the day. I think you'll find that almost all remember the service (and value for money) was much better - asking Network Rail staff which was better hardly counts. Energy and communications are good areas to privatise (notice my opposition to privatisation is not ideological). Transport, as the rest of Europe shows glowingly, is best left in public hands, with state subsidies. I note how you utterly fail to provide an actual argument about why separating track from trains is a good thing.

My reference to coal is quite clear - there are coal fired power stations which now import coal from Poland, when there are still coal reserves in the UK. Thatcher destroyed this and other industries for no reason except she opposed union power. We are coming to a stage in the West where all manufacturing is being outsourced East. This creates increasing vulnerabilities for the West which we've yet to fully appreciate. It seems that you have an uncritical relationship to globalisation and to issues such as food, energy and industrial security - or have I got you wrong?

selling off public housing seriously reduced the a...

2006-04-18T12:21:00.000+01:00

selling off public housing seriously reduced the amount of low-rental stock available in the UK.
It also substantially reduced the number of people who required the low-rental stock.

The people who own those council houses now, are some of the ones who needed low-rental homes in the first place.

Those who sold up and moved out sold to those who needed to buy cheap homes. A council house is not exactly what most people aim to live in. Most rent/buy them because they have no choice.

You speak as if they were great in-demand homes that the rich snapped up. Poor people are the ones to be found in ex-council homes now.

There can never be enough Thatcher-bashing. She destroyed the UK's manufacturing base (steel, shipping, car manufacture, coal etc etc),
The UKs manufacturing industry was already limping.
If she really was the one who killed it off, then rightly so.

I don't know when British cars ever had a worldwide reputation for being good.

I hardly think they could compete with the fast and efficient chinese, japanes, german and american ones.

If anything, the woman was prescient. Who would have guessed the extent to which globalisation changed the way of the working world?

In these environmentally conscious days, who on earth talks about air-polluting coal as being a viable energy source? Are you kidding me?

Your talk of the good old days of British Manufacturing and Steel is nothing but sentimental nostalgia for an era gone by instead of looking at opportunities for the future.

The UK's transport network has suffered ever since. Kemi, you weren't in the UK when British Rail was around, so how can you know?

The UK's transport system suffered teething problems at the onset of privatisation because an incompetent Labour Government did not know how to handle a policy that the Conservatives had got the ball rolling on. Have you forgotten Stephen Byers already?

I did catch the tail end of British Rail, thanks very much (I see we're back to your comfort zone argument of, "you weren't born so you can never understand").

I've also worked for Network Rail, and the employees say that it is better now than it was working for the government. Many also agree that separating track management and separating train management was a good idea.

The problem was with the way John Major rushed through the privatisation between 1994 and 1997 and the way Blair handled it since then.

You can't blame the person with a great idea, if the people implementing it did a sham job!

Privatisation & Smaller Government. That's the way to go.
Mr. Thatcher-Basher.

selling off public housing seriously reduced the a...

2006-04-18T11:15:00.000+01:00

selling off public housing seriously reduced the amount of low-rental stock available in the UK. In fact the immigrant to emmigrant ration is not particularly higher nowadays than before. You are right Kemi that an aging population and higher single-occupancy (thanks to divorce etc) push up the demand side. But today's housing crisis began with shifting low-rent public housing into the private sector in the 1980's - no one can dispute that.

There can never be enough Thatcher-bashing. She destroyed the UK's manufacturing base (steel, shipping, car manufacture, coal etc etc), and went way too far with privatisation. The UK's transport network has suffered ever since. Kemi, you weren't in the UK when British Rail was around, so how can you know?

Too right, Kingsley!I'm sure the reasons for the h...

2006-04-18T10:04:00.000+01:00

Too right, Kingsley!

I'm sure the reasons for the housing crisis in the UK are more to do with
1) Longer Life Expectancies
2) A higher immigrant to emigrant ratio
3) More single-person occupancies
4) Higher rates of divorce, meaning that women who would have relied on a higher-earning husband to pay the rent, etc now have no such safety net.

Blaming Thatcher's right-to-buy policy for the housing crisis is fallacious. The homes she sold would still be occupied by the low-income tenants who bought them.

Jeremy,
You speak as if Thatcher sold the homes to the rich, and sent the poor out on the streets.

I find your Thatcher-bashing very irrational most of the time.

I have enourmous respect for the power of public a...

2006-04-17T21:53:00.000+01:00

I have enourmous respect for the power of public and private sectors combined. Let's also be fair, the UK is the biggest receiver of FDI from the US in the whole of Europe. It would be socially irresponsible and hugely selfish to throw caution to the wind and make choices purely on principle. I think the british have terribly short memories ....and quite frankly nothing seems to please them.

It might be the case in nigeria, but not in other ...

2006-04-17T12:50:00.000+01:00

It might be the case in nigeria, but not in other places. The public sector might be dysfunctional, but it doesn't mean that if it is concieved properly it would not serve the good.

I may be mistaken, but the housing crisis in the S...

2006-04-15T23:36:00.000+01:00

I may be mistaken, but the housing crisis in the South east is mostly to do with people such as nurses, teachers and so on not being able to afford houses.

Relatively few homes are built in the South East. So surely the council flat selling had the advantage of increasing the absolute number of houses in circulation in the market. I believe the housing crisis would have been much worse if it had not occurred.

In addition, I don’t think that the move was a cheap political trick. For many families it helped them up the social ladder and gave them some equity for the first time.

Finally, as someone who actually grew up in Nigeria I have a deep contempt for the public sector. Any thing even VAGUELY successful in Nigeria has been done by the private sector.

In Nigeria, the public sector does not drive growth; it is the main impediment to it.