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Comment by pjc50 | Hacker News Reader

> once something is a government project, it's basically that forever

Hardly. In my lifetime the UK government has privatised electricity, water, gas, telephones, British Aerospace, British Steel, British Petroleum, Rolls Royce, Rover, British Airways, railways, coal mining, and Royal Mail. Experiments have been made with roads, bridges, schools and hospitals.

Success of these has varied. The utilities make a big profit while people struggle to pay utility bills: https://www.ft.com/content/ef488dc0-9168-11e7-a9e6-11d2f0ebb...

BAe and BA are still in business. British Steel were owned by Tata for years and the few remaining sites are now spun off and trading under the original name. BP are making a profit except when they spill in the Gulf of Mexico. The railways are a mess. Rover were looted by their directors who narrowly escaped jail.

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> Success of these has varied. The utilities make a big profit while people struggle to pay utility bills

That kind of thinking absolutely kills infrastructure investment. To use British Telecom as an example. After privatization, BT kept its monopoly on the last mile, but rates were set to ensure that it was quite profitable. (About as profitable as say Time Warner in the US.) That ensures that BT had the incentive to invest and keep pushing fiber deeper into its network. Today, broadband speeds in the UK are significantly faster than in say France. But it also results in huge political backlash. “BT makes 20% profits while people can’t pay their utility bills!”

Except that Profits = income - Expenses (in simplified form).

So, that 20% Profit you mention is money NOT spent on infrastructure investments.

Sure. But it’s money that motivates BT to spend money on infrastructure investments. No matter how you structure your infrastructure markets, ensuring adequate investment is the single most important thing. You can do this with markets or quasi markets, or you can do it through government agency decision making. With the former, you need to ensure attractive returns on investment. Not merely bare profit, but enough profit so that the billions of dollars don’t get invested elsewhere. Having the government make the decisions doesn’t magically eliminate the issue of ensuring adequate investment. It makes it even harder! With the government is on the hook for making investments, you’re always subject to pressure from other priorities. There is a reason roads and bridges and water systems in the US are crumbling. We’ve dramatically underinvested.

Your examples illustrate perfectly how government regulation establishes monopolies and cronyism

And Standard Oil, Alcoa and Carnegie Steel/U.S. Steel demonstrate how lack of government regulations establish monopolies and cronyism...

Not "regulation" in this case, but actual state owned enterprises?

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