Economics Questions

Re: Private infrastructure criticism

ProudCapitalist — Fri, 06 Mar 2009 03:14:32 GMT

He claims that there exists something which cannot be provided by a free market, he calls it redundacies. That's wrong. There are plenty of "redunancy" services available on free markets. Actually, when a power plant goes offline, prices soar and it is very profitable to have "redundancy" to sell then.

So called "privatizations" of railroads during recent years, have still been very regulated. You cannot build a railroad in for example the UK without detailed permissions from the government, so competition isvery restricted. Mostly, such "privatizations" is only for certain operationas services, while the government keeps its monopoly of buying railroad services (to guarantee traffic also in the unprofitable wilderness). The construction of power plants, especially of the most cost efficient kinds, hydroelectrical and nuclear, is not allowedin most countries. How free is a market when supply is restricted like that? Not strange that prices soar.

Free markets invented electricity and railroads, and ran them perfectly until these industries were nationalized all over the world in the 1930s or during or after WW2. Since then, the same industries have stagnated with soaring costs and lowered quality.

Re: Private infrastructure criticism

krazy kaju — Fri, 06 Mar 2009 01:25:50 GMT

You should search the website.

Re: Private infrastructure criticism

hayekianxyz — Thu, 05 Mar 2009 20:17:45 GMT

I'd ask him to tell me why private roads are any different from private food, and proceed from there.

Re: Private infrastructure criticism

Thedesolateone — Thu, 05 Mar 2009 20:11:37 GMT

If government privatises electricity, but still mandates prices etc, then there are bound to be prices.

Basically, failure in privatisation can basically be traced to govt. intervention.

On roads read the Walter Block paper, "Free Market Transportation: Denationalising the Roads" (google it for the pdf).

Re: Private infrastructure criticism

BobT — Thu, 05 Mar 2009 20:03:29 GMT

redundancies are cost-effective, unless there is a monopoly. Im pretty sure most privitizations in infrastructure have basically been government-mandated monopolies. If they dont have to face competition then they dont need to take on any extra costs like that.

with competition however, of course they will make sure it "works." Who is going to do better, a rail company that has mechanical problems all the time, delays, etc, or one who has spent the money to make sure those things dont happen?

Obviously if there is a political monopoly, then of course there will be problems. Allow competition, and they will have to make it "work" or go bankrupt.

Infrastructure is not any different than any other industry. Ask web hosting companies if they waste their money on minimilizing downtime, even though "it isnt cost-effective." I think you could find thousands of examples of private services "working" better/more of the time than government services.

Private infrastructure criticism

nandnor — Thu, 05 Mar 2009 19:56:28 GMT

The typical counter argument for privatized infrastructure is similar to the following:

{

"Cost-effective"?

Dude. Infrastructure isn't supposed to be "cost-effective." Infrastructure is supposed to *work.* All the time. That means that it's supposed to have redundancies built in, and redundancies are not "cost-effective."

And privately run infrastructure just plain doesn't work. Rail privatisations have uniformly been a disaster, electricity privatisations have uniformly resulted in redlined grids and gas-fired power plants. And so on and so forth.

}

How would one go about arguing against it.