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Privatized Public Services

I will talk politics, economics and society. All in one, with a touch of insanity, I’ll admit. This is a rarity, but expect to see more of it.

I was listening to Radio 4 today, news time, and the presenter was interviewing various Labour MPs about where the party should be going now, what it needs to do get back on its feet – and someone mentioned the “part privatization of the Royal Mail” should be scrapped and it should become, once more, nationally owned.

Specific politics and policies aside, this struck a chord with me.

Corporations vs State Services

The idea of the privatization of public services annoys me. I have an admittedly rather simplistic view of companies as opposed to nationally owned entities.

For me, a private company is first and foremost an organized means generating money, whilst a state run service is one that is deemed a fundamental part of the running of a very, very large community (id est, a country), focused on ensuring the provision of said service. In any sane world, both organizations would strive to make the lives of people better out the the conviction of their moral fibre (the kindness of their hearts might be a bit much to ask). I think we can all agree that most of the time, this is not so.

Private corporations are out to make money – that’s what they are set up for – to cater for the desires of the people by providing them with goods and services, in return for cash. State services should, ideally, be focused on providing the service, using the money taken in from fees to continue and expand the service.

In short: companies focus on earning money, the service or goods being a means towards it; whereas a state service should focus on providing the service, the fees perceived being strictly for maintenance and debt repayment. Does this mean that the growth of the state service should be set at zero, neither wavering upwards or downwards? No. But if the State starts behaving like a corporation, the we’re heading into very murky waters.

Privitzed Train System – Consequences

Privatization of public services, to me, is fundamentally a bad idea. I have long decried and will keep on moaning about the quality of public transport in the UK, and more recently about the state of the roads in Britain. Such services as the upkeep and the provision of transport and communication lines should not be assigned to privatized entities.

The mere model itself is that of money making, and if they find they need to cut corners, they will. The idea of a self-regulating market does not apply, for the simple reason of the fundamental necessity of serving the public. Also, privatization prevents competing corporations from sharing information and responsability: coordination of trains, upkeep of tracks in grey zones, ticket purchasing, etc etc are not services realized to their fullest potential.

Also, there’s what I will call director-bloat. Where under one organization (the State) there would be one set of directors, under several companies there will be as many more directors, each with their own differing visions of which direction the overall service should move, and thus getting nowhere (and I will not develop on the extra salary burdens each high position imposes).

Users of the service generally can’t pick and choose in this market – mostly for reasons of coverage in the transport sector, and in other sectors like postal services, private companies charge an arm and a leg; and sometimes even the Toothfairy’s due whilst they’re at it.

Moving public services over to the state would be a good bet – it works very well in France – but some people voice concern over the control the state would have – especially in Britain, with its ever growing surveillance culture. Move too many fundamental services into the hands of the state and some fear some Dawn of the Kafka Courts, and an unsavoury Brave New World.

And yet, I still think centralization of the public services is necessary and desireable.

State-Guided Private Monopoly

Now I get wacky. I conjured this up this morning. But there’s method in the madness.

A centralized state run service is, in essence, the corporate equivalent of a monopoly. It is an organization that is the main or sole provider of a service, nation-wide, and backed by government money – whose information is probably accessible to the government as well. Scary, right?

But how about this: a corporate monopoly (not state run), with government trading rules specifying how much the company can charge for any given service, and explicitly guidelining a limit growth rate of the company, monitored monthly. The rules and rates are revised yearly, adherence to data protection and privacy law enforced by an independant body.

You’re quite probably asking: what on Earth for?

Centralization As I have been arguing/ranting previously, I believe the centralization of public services is desireable and necessary. These services form the back bone of how a country is run, and if competition is let free in this base system, we all suffer from it

Privatization I intentionally specify a corporate monopoly, so that the service provider and the government do not pool resources. The last thing we want is to give an already surveillance-power-hungry state more ammo.

Controlled growth In state run services, growth can be controlled from the fact that resources can be allocated and de-allocated, whereas in corporate climates the resources must continue growing if the company is to survive. Combining Centralization with Privitzation can introduce the worst of both worlds, (widespread reach and cash seeking), so a special programme would need to be introduced – check and balance. The organization needs to grow, but this cannot be left at the cost of service guarantee, quality, and affordability.

So which services do I think would be candidate for such a programme?

  • Road and rail infrastructure maintenance
  • Public rail and wheel vehicle transport
  • Medical treatment centres – this one can be difficult, given the sometimes high costs of certain treatments
  • national postal services
  • landline telephony and basic broadband provision
  • education and child care


One sector I can also see benefiting is charity. There are so many charities, each with their own agendas. In principle, this is fine, but again, there is duplication: Save The Children and Barnardos are working for the same cause. MacMillan Cancer Care is running alongside British Heart Foundation. Water Aid and Just A Drop probably run very similar programmes.

Did I mention Director Bloat previously? Surely this is not helping maximize the potential of what we give.

But what do you think?

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