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RidingPie

Has privatisation ever brought prices down in the UK

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Trickle down Reagonomics doesn't work, they don't trickle it down they squirrel it.

What doesn't work is trying to spread poverty evenly. It's better to be poor in a rich country than poor in a poor country.

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What doesn't work is trying to spread poverty evenly. It's better to be poor in a rich country than poor in a poor country.

Its just better to be rich, and that's as stupid a statement as yours.

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Its just better to be rich, and that's as stupid a statement as yours.

Visit a 3rd world country and then tell me it's stupid.

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Visit a 3rd world country and then tell me it's stupid.

Visit some oil rich middle east countries and see how the poor compare there to the rich there.

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The same place any profit comes from. You sell something for more than it cost you to make or source.

When you make a profit, you can pay dividends to your shareholders, this is where you get your capital from to invest in new technology.

Which comes back to my original point. Any surplus (I won't call it profit) that a nationalised industry gained gets invested back in the service/infrastructure. In the privatised case this get paid to shareholders/directors. Net result, we lose, a very few gain.

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Visit some oil rich middle east countries and see how the poor compare there to the rich there.

And?

Since when is relative poverty worse than absolute poverty?

There are hundreds of thousands of people in poor countries like the Philippines who move continents simply to be poor in oil rich countries, I've yet to hear of a poor Saudi who moved to the Philippines to enjoy the privilege of working for a minimum wage job over there.

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Which comes back to my original point. Any surplus (I won't call it profit) that a nationalised industry gained gets invested back in the service/infrastructure. In the privatised case this get paid to shareholders/directors. Net result, we lose, a very few gain.

Nationalised industries don't produce surpluses, they produce losses that the taxpayer has to cover.

Shareholders / directors pay tax and buy things. The money doesn't disappear, it circulates.

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And?

Since when is relative poverty worse than absolute poverty?

There are hundreds of thousands of people in poor countries like the Philippines who move continents simply to be poor in oil rich countries, I've yet to hear of a poor Saudi who moved to the Philippines to enjoy the privilege of working for a minimum wage job over there.

And of course thousands leave this country each year for a poorer life abroad in Canada, Australia etc., they just can't wait to get out there and poorer.

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Nationalised industries don't produce surpluses,

That's boolox

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Railfares in Germany and France are much cheaper than here. In the "bad" old BR days the taxpayer was subsidising BR to the tune of £1bn PA. Now in the "good" privatised days the taxpayer is subsidising the private companies to the tune of £4bn. Two of these companies are owned by SNCF and Deutch Bahn. Thus French and German rail passengers get cheap fares courtesy of the British taxpayer.

An incoming government wouldn't need to renationalise the railways, just wait for the franchise to end and not renew it. The state company operating East Coast is currently returning £200m pa to the taxpayer.

http://www.independent.co.uk/news/business/news/east-coast-rail-firm-directly-operated-railways-boosts-profits-8181255.html

Nothing to stop the same thing happening on all other main routes - leave the private companies to run the feeder routes.

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Nationalised industries don't produce surpluses, they produce losses that the taxpayer has to cover.

Shareholders / directors pay tax and buy things. The money doesn't disappear, it circulates.

What a load of tosh. Funny how the money circulates into the pockets of the few.

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And of course thousands leave this country each year for a poorer life abroad in Canada, Australia etc., they just can't wait to get out there and poorer.

Amazingly those countries are rich, when thousands of poor Britons leave to go to do minimum wage jobs in third world countries you will have a point.

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What a load of tosh. Funny how the money circulates into the pockets of the few.

It's funny how living standards have risen dramatically for all since the Industrial revolution since private industry concentrates wealth in the hands of the few and none of this trickles down to the poor. You make statements that have no theoretical justification in economics and are contradicted by empirical data.

Still using words like "tosh" and "boolox" are obviously far more impressive than actual facts.

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It's funny how living standards have risen dramatically for all since the Industrial revolution since private industry concentrates wealth in the hands of the few and none of this trickles down to the poor. You make statements that have no theoretical justification in economics and are contradicted by empirical data.

Still using words like "tosh" and "boolox" are obviously far more impressive than actual facts.

:lol: oh dear. Do tell me what nationalised industries existed prior to the industrial revolution. The industrial revolution was a time when the majority of the poor lived and worked in terrible conditions, suffered ill health and a the very few became very rich. The Victorian era did see some philanthropic behaviour from some industrialists who saw that treating the workforce well and providing housing and education improved productivity, but these were in the minority and the fact that living conditions have improved since those times is not because of a trickle down effect but because of the liberal movement.

I'll put this in simple terms. Consider two cases where there is x amount of money in the economy. The first case is where an essential service is nationalised. After costs, any additional money that is left over is fed back into improving the service. In the other case of the privatised service, any additional profit goes into the pockets of the shareholders. Trickle down economics does not work and just increases the gap between the rich and poor (e.g. Look at the US). So all privatisation does it make a few richer and takes money out of the service.

I am not a communist, a free market is essential for the economy. What I do think is that essential services should be owned and run by the government and the private sector cannot be trusted with them.

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Like i said earlier, to work in the interest of the consumer the privatised services need to offer free and open competition in order that service be improved and prices driven down. That's how the free market works. However, in the case of the privatised former nationalised industries there is little or no free and open competition at the point of delivery to the consumer but instead a group of regional monopolies. That is why privatisation has, in my eyes, failed it is an artificial pretence of free market economics. Apart from the telecoms industry, where there has been free and open competition at the point of delivery and choice of goods and services is high, and costs to the user relatively low.

Trying to artificially force one business model onto another, completely different type of business that does not suit that business model never works, it just ends up with confusion and muddle. Just look at schools and the NHS who are currently being forced into the same straightjacket. Schools and hospitals are not profit generating businesses, stop trying to force them into trying to behave like industrial businesses.

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Like i said earlier, to work in the interest of the consumer the privatised services need to offer free and open competition in order that service be improved and prices driven down. That's how the free market works. However, in the case of the privatised former nationalised industries there is little or no free and open competition at the point of delivery to the consumer but instead a group of regional monopolies. That is why privatisation has, in my eyes, failed it is an artificial pretence of free market economics. Apart from the telecoms industry, where there has been free and open competition at the point of delivery and choice of goods and services is high, and costs to the user relatively low.

Trying to artificially force one business model onto another, completely different type of business that does not suit that business model never works, it just ends up with confusion and muddle. Just look at schools and the NHS who are currently being forced into the same straightjacket. Schools and hospitals are not profit generating businesses, stop trying to force them into trying to behave like industrial businesses.

Spot on. Basically because telecoms privatisation had been a success the Tories flogged the rest of the privatisations to us on the basis of "two legs bad, four legs good" Thatcher always said she was an admirer of Orwell - and went on to prove it.

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:lol: oh dear. Do tell me what nationalised industries existed prior to the industrial revolution. The industrial revolution was a time when the majority of the poor lived and worked in terrible conditions, suffered ill health and a the very few became very rich. The Victorian era did see some philanthropic behaviour from some industrialists who saw that treating the workforce well and providing housing and education improved productivity, but these were in the minority and the fact that living conditions have improved since those times is not because of a trickle down effect but because of the liberal movement.

I'll put this in simple terms. Consider two cases where there is x amount of money in the economy. The first case is where an essential service is nationalised. After costs, any additional money that is left over is fed back into improving the service. In the other case of the privatised service, any additional profit goes into the pockets of the shareholders. Trickle down economics does not work and just increases the gap between the rich and poor (e.g. Look at the US). So all privatisation does it make a few richer and takes money out of the service.

I am not a communist, a free market is essential for the economy. What I do think is that essential services should be owned and run by the government and the private sector cannot be trusted with them.

If I did "look at the US", I'd notice that it's an extremely wealthy country and people are literally risking their lives to get into it so that they can work illegally for below minimum wage jobs. And your use of "trickle down" indicates that you don't know what it means, you think it means laissez-faire capitalism but in fact it refers specifically to tax breaks for the rich - that it "doesn't work" is simply a mantra that is repeated without any evidence ever produced to support this point of view. Not that I particularly advocate said tax breaks but I'm pointing out that there is little evidence of no benefit for low paid members of society.

And whilst the liberal movement did a lot of good, they'd have done sod all if it hadn't been for the fact that the economy could afford a certain amount of socialism. India, for example, has always had (since independence anyway) a welfare state and protectionist government but it does very little because the economy is so poor.

What you miss with the Industrial revolution is that it was triggered by the Agricultural revolution which did see publicly held land privatised though that wasn't really my point. My point is that the private sector does generate wealth for the economy and it's not just the elite who benefit, the industrial revolution was horrible but good things came out of it in the end. The living standards of everybody around today are much higher than the working or even middle classes of that time. You make a distinction between the private sector and newly privatised business that doesn't really exist as well.

I'm not a fan of every privatisation that happened but as a general rule of thumb "private good, public bad" is more true than false.

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I agree with much you have written there. Private sector are wealth creators, I'm not denying that. But certain industries (health, education, defence, transport, energy etc. ) should be publicly owned and run. Public good/ private bad is a simplistic and wrong view. Likewise, an opinion that all things public sector being inefficient is equally wrong.

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I agree with much you have written there. Private sector are wealth creators, I'm not denying that. But certain industries (health, education, defence, transport, energy etc. ) should be publicly owned and run. Public good/ private bad is a simplistic and wrong view. Likewise, an opinion that all things public sector being inefficient is equally wrong.

Certain industries - yes though I'd exclude energy from this list but not for the reasons that you suggest.

For instance the health industry is different from the general "public bad, private good" because of the huge scale economies available to the NHS. It is a rare instance of a public sector provider that has a lower cost base than the private sector and thus ironically the largest provider of private health care in the UK is the NHS.

The poit I was making previously is that there is no particular distinction between the private sector generally and a company that used to be public but is now private, they would both behave in the same way and be subject to the same rules.

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Privatisation has improved efficiency but brought down the price and value of a working week's wage.

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I recall the days of nationalised electricity, nationalised gas, nationalised telecommunications, nationalised steel industry just one broadcaster, and yes, nationalised road transport. High prices, low efficiency, over-manning, poor customer service, no product development.

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I recall the days of nationalised electricity, nationalised gas, nationalised telecommunications, nationalised steel industry just one broadcaster, and yes, nationalised road transport. High prices, low efficiency, over-manning, poor customer service, no product development.

Take the Nationalised Health Service. It is more cost effective and efficient than compared to the private health care system used in the US. Privatised public transport in the UK is very expensive and offers poor service. Public transport doesn't need competition. Bus companies neglect routes that aren't profitable. Train fares are through the roof. Privatised Energy suppliers artificially drive up costs. The BBC is the finest broadcasting service in the world although I this is an industry that needs competition.

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I recall the days of nationalised electricity, nationalised gas, nationalised telecommunications, nationalised steel industry just one broadcaster, and yes, nationalised road transport. High prices, low efficiency, over-manning, poor customer service, no product development.

The truth of the matter I suspect is somewhere between the two, private industry is not as exploitative or innovative as some would claim and nationalised industry is not as inefficient and bloated or as socially responsible as others might claim.

Nationalised industries of the past reflected the times in which they existed. In the sixties GB was still suffering the financial shock of World War 2, as a nation we were virtually bankrupted which meant money for investment was pretty hard to come by. Over manning is a subjective view, If you want a BT engineer at your house tomorrow you need to have a lot of BT engineers, if you're providing an essential service (gas, water, electricity) and are operating in the days when materials and equipment were not as reliable or robust as we have come to expect you are going to get a greater incidence of failure, if you are also operating in times before widespread mechanisation of labour you need a lot of blokes with shovels. Poor service was by no means confined to nationalised industry, it was endemic to the UK throughout the sixties and seventies, early closing Wednesday? Did anyone ever visit a doctor or bank before the 1980s?

Many of the nationalised companies (BMH which became part of British Leyland for example) were struggling badly under private ownership and were only brought into public ownership in part to try to rescue the business and safeguard jobs, yet I wouldn't suggest that is evidence of the benefits or superiority of public ownership all I would say is that you need to judge circumstances by the standards of the times.

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Nationalisation is outdated political dogma that is designed to favour the state not the customer. Nationalised industries covered their losses by taxing you and I. The problem is that not too many on here have practical experience of life under Clause 4 - and a good thing too -

One of the issues post de-nationalisation has been the need for the privatised utilities and this includes the railways, to invest in infrastructure, plant and equipment to meet the needs of the customer, an area neglected by these industries during state ownership.

In any case its the National Health Service not the Nationalised Health Service. Thankfully, developments under governments of all leanings over the last 20 -30 years has dragged the service into the modern era, resulting in a huge drop in the use of leeches and witchcraft. The NHS is now very much patient focussed rather than as used to be, run for the benefit of Doctors and Consultants. My first NHS hospital experince at Salford Royal in 1959 or so was not pleasant and my wife's experience as a nurse in Bolton in the mid 1960s made her long to be in the Paras.

Rail fares are not through the roof either. SOME rail fairs, such as those you might be asked to pay if you are in first class with a second class ticket are hugely expensive though many advance purchase tickets are very very cheap. It all about supply and demand I guess. Imagine what might happen if the standard class fare from Piccadilly to Euston was £25 return?

In the BR days there were hardly any advance purchase options, hardly any route competition ( look what route competition on the Birmingham - London routes has done for customers. The TRUE cost of a comparable car journey, by the way comes out at around £150. Not just marginal fuel cost but true cost - tax, insurance, service, maintenance, depreciation, interest and fuel cost. Again I recall 1st, 2nd and 3rd class travel under British Rail and the running of expensive, dirty and noisy steam engines when other counties had gone diesel and electric. BTW, rail travel is up something like 40% since (botched) privatisation.

No, trust me, a return to nationalisation would be a disaster. However bad the buses are now, they'd be worse once publicly owned.

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Not buying any of that. Many of your arguments against nationalisation are based upon how thing were at the time. There is no evidence to suggest that things would be better had these services been privatised at the time.

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