Originally Posted by Copes
I also tend to be a fan of non-essential services (and to be clear, I consider health care to be essential) being privatized. The liquor corp. for example. Why is the government wasting time and money running this? I would much rather it be run privately, while government provides the framework (laws) for it to operate.
We'd probably have cheaper booze and more selection.
I disagree. I much prefer having a strong foundation of public companies.
In my experience, they offer two key benefits:
1. They keep prices low because, generally, they are prohibited from making a significant profit.
2. They re-invest their profit in areas of public good or even literally split it up among residents of the relevant political jurisdiction.
In Manitoba, for example, there were two beloved public companies: MTS (phone service) and MPI (auto insurance).
The former was privatized, rates went through the roof, service fell through the floor. People there still grumble about it having happened every time it comes up.
MPI stayed public. Manitoba still enjoys among the lowest auto insurance rates in the country and, when I lived there, I even got a cheque back once year that MPI brought in too much money.
There are problems, of course... but the idea that private ownership makes public companies more affordable and efficient is wrong. Privatizing industries almost always leads to increased costs for consumers and the consolidation of those profits in the hands of an ever-shrinking number of big wigs.
People seem to mistakenly believe that privatization leads to competition (which is what actually makes this more affordable and efficient). This is almost never the case. Private interests make sure they buy, for all intents and purposes, the public monopoly. Only token competition is ever allowed.