Comment by crdoconnor | Hacker News Reader

Comment by crdoconnor | Hacker News Reader

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>I am not yet convinced it is not amenable. For example who gets to serve a city with emergency services? I guess there could be bidders to the city council, offering services for a certain price. That would lead to competition.

This sort of thing is usually fertile breeding ground for corruption and backhanders. The NHS has been dogged by scandals caused by this sort of pseudo-privatization.

It works for smaller and short term contracts, especially for things which the private sector also needs, but the larger the size of the contract the more likely it is that the price will be determined by backhanders and which ministers play golf with which chief execs.

For something the size of "supply a city with emergency services", you could practically guarantee that the city council leader's cushy post-political job would be determined by which company they picked.

tl;dr read up on the principal/agent problem.

But then how can it be solved? With the blockchain? (that was sarcasm, although, perhaps worth thinking about - transparency, at least)

Sure, governments/councils spending other people's money is always a fertile ground for corruption.

It's not that hard provided the government is motivated to clamp down on it: keep the contract sizes small, keep the contract durations short, make the transparency absolute and the bidding process transparent, open and fair.

Most privatization efforts come about as an attempt to inject corruption, however, so arguing that it could be done in a fairer and cheaper way is something of a moot point: if it were going to be cheaper and fairer they wouldn't be pushing for it in the first place.

"Most privatization efforts come about as an attempt to inject corruption"

Huh - citation needed? I've never heard that claim before. Corruption pretty much needs governments, who else are you going to bribe?

To me competition seems the only surefire way to keep prices fair/low. Yes, motivated governments in theory could do everything. A supercomputer could theoretically compute the perfect prices and allocations for everything. But no such computer exists, and markets are the only approximation available. You can not rely on governments to be motivated to be selfless and good. Even if perhaps some individuals are, in the long run the incentives are just not aligned, and it takes just a few bad apples to ruin the system.

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