[paul cotter (OP)]

Alancalverd argues against privatisation of services, with good reason as profit becomes the chief criterion and the consumer suffers. On the other hand state supplied services can become centres of mediocrity, where no one can be sacked for failure, there is no motivation for improvement and the state is seen as a bottomless pit of cash. I must emphasise I am talking about experiences in my native country, Ireland. It may be different elsewhere but I doubt it. One major example here is the health service: over the years enormous quantities of money have been thrown at it and yet it is falling apart with an exodus of qualified professionals. No one has the guts for a slash and burn reform process which would be the only way of saving it. I don't have any magic solutions but I do know that in the absence of some sort incentive to improve, work expands to fill the time allotted.   

[Petrochemicals]

Health care in cuba versus health care in the usa.

[paul cotter (OP)]

Indeed, Petro, in Cuba health is considered a "caring profession" and they do very well on a limited budget. In the states it seems to me that health has been taken over by big business with the aim of squeezing as much money out of the system as possible.

[alancalverd]

I've never really understood the Irish healthcare system but the UK public health service has been in steady decline ever since the Blessed St Margaret and Tony B Liar tried to privatise it, first by chopping it into saleable chunks, then by exposing the public purse to the depredations of the "Public Private Initiative" where all the fixed assets belong to shareholders.

There is an underlying problem that demand is potentially unlimited because no politician can dare to say "we won't treat that condition" and death is considered a failure of the industry rather than the patient. 

[Petrochemicals]

Indeed, Petro, in Cuba health is considered a "caring profession" and they do very well on a limited budget. In the states it seems to me that health has been taken over by big business with the aim of squeezing as much money out of the system as possible.

I often wonder how much effort and expense is packaged along with these extortionate charges, how many products/services use legal people, advertisers, market reaserchers, etc. But i suppose that is the modern business model, horrendeously unproductive and bad value.

[alancalverd]

And the UK was supposed to go the same way by introducing competition between NHS Trusts. All that happened was an increase in administrative costs because people expect to receive free healthcare reasonably close to home, so there is no actual market: common conditions are treated locally, and at the other end of the scale specialists necessarily nucleate in a few hospitals to research and treat rare conditions.

[alancalverd]

On the other hand state supplied services can become centres of mediocrity, where no one can be sacked for failure, there is no motivation for improvement and the state is seen as a bottomless pit of cash.

None of these downsides is necessarily the case.

As I recall, competition for professional posts in the civil service was intense and whilst "admin and policy" may have been a hotbed of mediocrity, being too close to idiot politicians, the quality of science in the agriculture, industry and defence  laboratories was always world-class. Similarly, my technical contacts in the pre-privatised Post Office (which also ran telecoms) and Central Electricity Generating Board were at the top of their game because service quality was important and shareholder profit wasn't.

No need to sack incompetents: just put everyone on a renewable 3- or 5-year contract, like in real life.

The state was never a bottomless pit of money for the public labs and workshops - we had tight annual budgets tied to each project. Things only went wrong when, in the name of "efficiency", projects (particularly in defence) were let to private industry on a "cost plus" basis.

Likewise when I joined the NHS, internal budgeting was strict and anything I contracted out was on a fixed-price tender with penalties for late or defective delivery. All that went to hell in a handbasket thanks to PPI where a developer could build a shoddy hospital hedged with 20-year maintenance contracts such that any dead lightbulb cost 200GBP to replace and all capital equipment was leased at twice the cost of owning it and maintaining it in-house.

The accepted theory is that the state should run any service that is considered essential but not subject to market competition, so natural monopolies like railways, water, sewage, electricity, gas, and roads should be considered as second only to the military and police services for public ownership and accountability. Oddly, health services could in principle be open to the market but a free and effective basic service is considered a mark of a civilised society.

[evan_au]

When you say "provide for" consumers, neither state nor private systems can afford to give while taking nothing in return
- State-based services are paid by taxes; in most countries it is recognised that the rich have more disposable income and can afford to pay higher taxes than the poor. This allows the poor to receive services at a subsidised rate, because the rich pay more.
- Private-based services are paid by a fee for service, or by an insurance premium (effectively averaging the cost of services across a population). The services are pitched at those with the greatest ability to pay, and simply unavailable in lower socioeconomic areas. The poor, unemployed, ill and/or aged can't afford the fees, and so are often left out of service provision.

For health care, Australia has a mixed public/private model. The wealthy can purchase insurance at a level they want to pay (gold, silver, bronze), while the government provides a "safety net" for the poor, unemployed, ill and/or aged (paid out of taxes, and usually with much longer waiting times for elective surgery).

A purely public system is not wise, either. I heard a story that in the past in Cuba, water was considered an essential service, and so was provided free; because it was free, some people just left their taps running all the time. With no income, there is little money to maintain or expand the system, and now Cuba has a water problem.
- People will place a value on something for which they pay, so even a token charge reduces waste.

[alancalverd]

There's no objection to charging for the use of public assets. Most European countries treat drinking water as a state asset which is sold at a price fixed by government but the treatment and delivery can be done by private contractors.

The UK is unique in having given the basic asset, i.e. the rain that falls on my garden, to private "investors" who have failed to invest in maintaining the quality or quantity of supply and disposal, but raised substantial loans and price revisions on the basis of "plans" for future investment which mysteriously never happens.

I could blame Margaret Thatcher for incompetent privatisation of what was previously a municipal asset, but since her only objective was to win votes and make a profit for her Party supporters, which is what happened, the correct words are "theft" and "corruption". Everything that woman touched, turned to faeces.

A wise and now sadly deceased friend was hired as a strategic consultant  by various governments (excluding the UK, of course) on the development of railways. He always began by pointing out that the inherent infrastructure costs and inflexibility of rail transport meant that it could never be profitable in the late 20th century as road or air transport could always beat it for everything except passenger comfort: in the absence of canals, railways were useful for non-time-sensitive bulk cargo but otherwise should be considered a public service, not a business. Result: every nationalised railway he consulted for,  provides just that - cheap trains that run on time.