Noam Chomsky on Privatization

[_honorentheos]

Airport security and traffic management is socialized in the US. It is not in many European countries regarded as more socialist than America. Suggest to an average American dissolving government management of those functions. My money is that most of them would intuitively react by thinking that's crazy. My explanation for that is that people have a hard time understanding how markets meet needs in comparison to how blunt government control does.

That challenge with this overly simple championing of free markets is it ignores markets succeed in finding solutions and price points in the aggregate but the details of this include a lot of failure.

It's one thing to see a lot of electric car companies compete and work their way to optimal where most will fail and their investors end up taking a haircut while a few will figure it out and end up being the Fords and Toyota's of tomorrow. It's another to have one's water supplied that way or the school one sends one's kids to that shapes their future forever.

[_Chap]

A truly privatized system is a system that has a goal of making profits for shareholders.

Stakeholders? Sure. It is not the benevolence of the breadmaker that ensures people are fed.

Yup, Adam Smith. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

But maybe we should recall that it was not the self-interest of the Great British Baker that eventually ensured that bread was made from wholesome flour not adulterated with chalk and ground bones, but the non-profit directed actions of public health activists in the course of the 19th century, leading to The Adulteration of Food and Drugs Act 1860, and its successors? The bakers, left to themselves, pursued the profit motive in ways which were certainly not in the interests of their consumers. The market, left to itself, will simply make money any way it can. That's what it is for. To expect otherwise is naïve, and dangerous.

[_honorentheos]

U
I don't want that when it comes to water services. Baseline service for utilities that are essential for day to day life demand more than just providing options and a good experience for the cost.

The two general approaches to ensuring that private water entities don't poison people is 1) have a government regulatory authority provide oversight with the power to issue consequences for poisoning people 2) use tort law to empower people to sue private water entities to sue them for any damages that occur.

It isn't just about poisoning people. It's about water security. Should a liberal western democracy ensure it's citizens have access to clean water? I'm not the only one who thinks that this is a bedrock condition of a modern, civilized society. Turning it over to only private, profit-driven companies turns it into a commodity. There are some things that shouldn't be commodities.

[_EAllusion]

Yup, Adam Smith. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

But maybe we should recall that it was not the self-interest of the Great British Baker that eventually ensured that bread was made from wholesome flour not adulterated with chalk and ground bones, but the non-profit directed actions of public health activists in the course of the 19th century, leading to The Adulteration of Food and Drugs Act 1860, and its successors? The bakers, left to themselves, pursued the profit motive in ways which were certainly not in the interests of their consumers. The market, left to itself, will simply make money any way it can. That's what it is for. To expect otherwise is naïve, and dangerous.

Maybe you should be addressing this to Honor? I'm the poster implying that regulatory solutions are sometimes appropriate and obviate the need for public ownership. Tort, contract law, and private sector review systems also serve this function depending, but the general takeaway is socialization is not needed to provide relatively safe and abundant food. In fact, avoiding socialization of food systems historically has been objectively better at meeting those goals. Since food is about as essential as water, I'm having a hard time seeing why his "but X is essential" argument doesn't equally demand government takeover of food systems.

[_EAllusion]

It isn't just about poisoning people. It's about water security. Should a liberal western democracy ensure it's citizens have access to clean water? I'm not the only one who thinks that this is a bedrock condition of a modern, civilized society. Turning it over to only private, profit-driven companies turns it into a commodity. There are some things that shouldn't be commodities.

I don't think England has foregone water security. I think that water security does not require government ownership of water management.

[_honorentheos]

Yup, Adam Smith. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

But maybe we should recall that it was not the self-interest of the Great British Baker that eventually ensured that bread was made from wholesome flour not adulterated with chalk and ground bones, but the non-profit directed actions of public health activists in the course of the 19th century, leading to The Adulteration of Food and Drugs Act 1860, and its successors? The bakers, left to themselves, pursued the profit motive in ways which were certainly not in the interests of their consumers. The market, left to itself, will simply make money any way it can. That's what it is for. To expect otherwise is naïve, and dangerous.

Maybe you should be addressing this to Honor? I'm the poster implying that regulatory solutions are sometimes appropriate and obviate the need for public ownership. Tort, contract law, and private sector review systems also serve this function depending, but the general takeaway is socialization is not needed to provide relatively safe and abundant food. In fact, avoiding socialization of food systems historically has been objectively better at meeting those goals. Since food is about as essential as water, I'm having a hard time seeing why his "but X is essential" argument doesn't equally demand government takeover of food systems.

I'm pretty sure you skipped past the part regarding failure playing a healthy role in how markets behave and succeed, and instead jumped to the most overly simple, cartoonish version of my point while attempting to nuance the argument for privatization by inserting in regulation and oversight to ensure the market doesn't get the final word where society has more than an superficial interest in the outcome.

That said, I have to imagine you have issues with how much government actually does to ensure food security given your libertarian leanings. Farms bills tend to get under libertarian skins.

[_honorentheos]

It isn't just about poisoning people. It's about water security. Should a liberal western democracy ensure it's citizens have access to clean water? I'm not the only one who thinks that this is a bedrock condition of a modern, civilized society. Turning it over to only private, profit-driven companies turns it into a commodity. There are some things that shouldn't be commodities.

I don't think England has foregone water security. I think that water security does not require government ownership of water management.

Tell me how having guaranteed standards of service is really just the invisible hand at work. I'm genuinely curious.

[_EAllusion]

I'm pretty sure you skipped past the part regarding failure playing a healthy role in how markets behave and succeed and instead jumped to the most overly simple, cartoonish version of my point while attempting to nuance the argument for privatization by inserting in regulation and oversight to ensure the market doesn't get the final word where society has more than an superficial interest in the outcome.

That said, I have to imagine you have issues with how much government actually does to ensure food security given your libertarian leanings. Farms bills tend to get under libertarian skins.

Fortunately, the United States isn't the only country on Earth that eats food and there are other nations don't rely on our system of food subsidies while still managing to avoid famine. One would hope you don't think famine is just around the corner without subsidies because food producers don't plan around uncertainty in supply/demand. Farm subsidies in the US don't avoid famine so much as artificially enrich farmers, hurt farmers in developing nations sometimes causing famines there, and distort the constitution of our food supply. The latter is one of the reasons why the US has relatively poor health outcomes compared to other nations. It is a direct contributor to our relatively poor diet, so it's all a wonderfully connected web.

Regarding market failures, businesses are capable of avoiding catastrophic failures (or, rather, at least as capable as public management is). They are provided incentive to avoid catastrophic failures either due to market consequences or because of external consequences in the form of regulatory penalty or civil loss. Because I didn't want to assume some cartoonish version of your point where a private company walks into catastrophe over and over of in a trial and error process, I assumed this would not need to be pointed out.

Fortunately, when people desire something, market incentives mostly align in that direction already - meaning that people attempt to negotiate contracts that ensure those desires are met.

[_EAllusion]

Tell me how having guaranteed standards of service is really just the invisible hand at work. I'm genuinely curious.

This thread is less than two pages. I don't think it will be hard to find several examples in those pages of me endorsing regulatory solutions for the public interest. If you pay real close attention you might even notice me pointing out how these are one of a suite of options that obviate an argument for socialization in an environment where people can only conceptualize socialization as meeting people's resource needs.

[_honorentheos]

I'm asking you to bridge the gap between, "People don't understand how markets work to make things better" and "Regulation makes socialization of services an antiquated idea for people who can't let go and grasp the future." You were coming on pretty strong with the pro-market position on page 1. So, I'm expecting more than a subbie level "I've already told you in my mind how all the things I didn't say in a couple of sentences actually should be understood given what I said afterward that shows how far my thoughts are spread on this issue."

Market successes don't all come about because godlike executives constantly maneuver to give people what they want at the price point they are willing to pay. There are risks to making changes that sometimes pay off and sometimes don't. It's much more like biological evolution where only 1 out of every 5 entrepreneurial business "makes it" and the innovation/diversity of options that arise are what won out in the competition. The space where privatization that works for providing a public good or service includes the tolerance for risk, the degree of proven concept and risk/reward of the consequences of opening up the provision and management of the service to those dynamics. In the case of services like water, the appetite for risk in order to realize rewards in efficiency and innovation should be pretty small. In the case of, say, developing a new power grid to replace the current one that will be phased in, there's an entirely different set of circumstances that would accommodate more risk because the burden of individual failures lands differently.

Maybe in Wisconsin water is more of a problem of abundance and management. In the west, it is one of the scarcest of resources where ownership of that resource is much more of a consideration than just how to get it from point "a" to point "b" and into a glass in someone's kitchen. And what one finds in the west is a mix of private and public service providers for the kind of good reasons that inform a person of the more comprehensive dynamics involved rather than making sweeping, blunt arguments like, "I think water service should be privatized." Sounds pretty poorly informed and reminds me of a conversation I once had with a libertarian who insisted the expansion of the railroads in the 1800's wasn't an example of government sponsoring private enterprise but was just good old fashion flourishing of the freedom of the market. Good times, those.