Comment by qub1t | Hacker News Reader

Comment by qub1t | Hacker News Reader

Parent Full thread

Hong Kong has one of the best subway systems in the world and it generates a profit every year [1]. The USPS also generates profits as well [2]. I would argue that the profit motive incentivises efficiency in both of those examples.

The best innovation often happens when working under constraints; often a drive for profit results in better service for everyone using the infrastructure. Of course this isn't the case 100% of the time, like your example of medicine, which is why I think that to get the best of both worlds you need a mix of government regulation with privatized capitalism. But I think it would be incorrect to dismiss the profit incentive entirely as being bad, and probably in the case of US infrastructure we would benefit from more privatization and not the other way around.

[1] http://money.cnn.com/2015/03/30/news/hong-kong-mtr-subway-pr... [2] http://www.newsweek.com/post-office-aint-broken-its-profit-s...

There's a couple interesting issues at play. One is that a profit incentive can be at work without the goal being to break even. For example, perhaps the goal is to subsidize by only $XXX million/year and above/beyond this goal is considered "profitable" with appropriate incentives.

Another is the issue of correlation/causation. Well-run systems may tend to be efficient in their use of monetary resources (almost by definition), but it's not clear that setting a for-profit goal will be a cure-all intervention that causes a system to be well-run.

It's also a big leap from setting profit goals to full-on privatization, which I'm skeptical of for several reasons. Private companies are often only pushed to be "good enough", better than the competition. A public transit system that is just barely better than a cab (say for daily work commute) is no good at all. Private companies tend to have short-term incentives, for instance, the CEO may get a bonus based on the current year's profit, which will be destroyed by investment in infrastructure. Companies care about maximizing revenue rather than welfare. Etc.

That was USPS's first profit in 5 years just so we are clear.

http://www.govexec.com/management/2016/02/usps-records-first...

Reply on news.ycombinator.com