Outsourcing, privatisation of public services

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Privatisation of public services has long been an occuring theme in the west, the idea being that a competitive environment will enforce efficiency and cut costs for the customers, resulting in a better world. Economically.

The US have been at the forefront of this, but of course we had that in Germany too. For instance, a town in East Germany had decided to privatise the garbage disposal to cut costs - the result was that the private company threatened to lay off 50% of the employees, who to keep their jobs agreed to significantly lower wages. This wage cut lead to them becoming receipients of, in lack of a better word, welfare, which had to be paid for by the city, and the final calculation showed the City ended up paying 20% more than before. So they made it a non-profit public service again, because it was more economical for the taxpayer.

In the US it went much further with privatisation of essentially military functions. I got reminded of the whole issue when I read an article about the current rage over the conditions in Walter Reed Military Hospital in the US. While there obviously was a failure of command and late but rightly heads roll, I stumbled over an article in the Army Times, which lined out that Walter Reed was in part privatised.

In a labor intensive job that's a guarantee for doom. If you cut your manpower down to a sixth, with equal work, you most probably get insufficient service, unless the job was insanely overstaffed before (which is, traditional inefficiency of armies in general aside, unlikely). That's common sense.

Both examples make a telling point that profit generation is the primary interest in private enterprises; service comes at a much lower priority (an observation I can confirm from my own experience in a private company providing outsourced services). That is equally valid for basic services like water supply, sewage treatment over garbage disposal to military contractors.

I am pretty much convinced that privatisation of public services really is neither cheaper nor offers superior utility.

 

Plus - in the case of military privatisation - it gives the corporation a reason to want war so that their services are in high demand. They certainly have enough money to lend some weight to the pro-war side.

 

I think the opposite: privatisation can be an excellent choise when compared to the inefficient and slow government-regulated enviroment.

Like always, there are good choises and there are bad choises. If a company can't handle the expenses, it simply means that their expenses are higher than income. It's common sense. And if the income-rate is too low, you really have to ask why nothing has been done about it.

There can be several explanations to this, such as too strict terms set by the government, bad leadership, bad marketing, or whatnot. The thing is that for the new market to expand, it must become attractive for new companies to enter and old ones to invest. Even if it was about waste. Not just for the companies, but people too. Recycling waste should be FUN and worth the price.

IMO, it would be better if the public sector was completely privatized. For example, private dentists usually offer better and faster healthcare than the government facilities. If these facilities disappeared, it would mean more clients for the private sector. Which would actually mean higher prices due of higher demand.

To counter this, the social-security funds would be needed to be directed towards educating more doctors and paying, say, 50% of the price the customer pays. Also, the career should be made more easily accessible by potential candidates. E.g: seven years to become a doctor is way too much. With more and more practitioners coming to the industry, the market-forces would eventually lead to status-quo, which can be much cheaper and efficient than any political compromise should the prequisites been met.

 

There are a number of publically employed people (I'm thinking principally council staff) that wouldn't survive in the private sector. Lack of work ethic seems to be the principle reason.

 

Heh, do you say they have too little - or too much?

 

It turns out that the VA is the best medical care provider in the USA.

So much for the efficiency of the free market's invisible hand trumping sluggish government bureaucracies.

 

Don't like it one bit. The UK is going to privatise our water company and introduce huge fees to nicely set up a greedy foreign company. Fees are expected to be around £600 for rich and poor alike.

Still elections start tomorrow and we can expect a socialist majority, so all is not lost.

 

My country is starting to privatise certain public services and its horrible. For example, our postal services were privatised and now its inefficient and slow with major foul ups. It recently caused a big hoo-haa in my country. These privatised public companies lack competitors and has a monopoly, becoming lazy and inefficient.

 

The free market only answers to one rule: Profit. The corporation has no regard for the quality of human life, outside that of a consumer demand. Thus no thought goes into the quality of life of the employees, or the negative impact a company's actions might have on the environment, or the economy. (Do we really think self-serving corporations automatically serve the economy's best interests? What about Enron?)

The best system seems to be what's in place: a melange of both public and private sector companies serving the public. Together they serve as checks and balances.

When Crown corporations become too top-heavy, corrupt, and inefficient, privatization steps in to set things straight. This is a good thing. The opposite must be true, though, that when corporations become too greedy, corrupt, and self-serving, the government can drum them out of their commission and serve the public themselves.

A danger, though, is that once a corporation gets a hold of a commission, they see it as an entitlement. If the government were to step in and re-install a crown monopoly, the corporations would surely cry foul, saying that they're being unfairly denied access to the markets.

Don't think so? What is the opposite of the word "Privatize"?

...at the end of it all, balance is the key.