Want to get rich quick? Join the Torry party and sell off public assets today! A quick rundown on the neo-liberal policies of the conservatives: A major problem with privatisation is that many services simply dont generate profit, necessitating vast subsidies and lucrative outsourcing contracts in order to entice private interests into providing these economically necessary services. These enticements often become a bigger burden on the taxpayer than the entire cost of running the services as a state monopoly! The privatisation of British Rail is one of the classic examples of runaway subsidisation, where the cost of current subsidies is significantly more than twice the cost of running the entire network back in 1994 (adjusted for inflation). Not only has the burden on the taxpayer risen, the burden on the passenger has too, with inflation busting price rises every single year in return for usage of an ever more overcrowded network. Privatisation allows private interests to exploit infrastructure and services that are simply too-important-to-fail. This puts them in the position where they can demand ever greater taxpayer funded subsidies and charge ever increasing prices, safe in the knowledge that the state or the individual consumer will tolerate this rent seeking behavior and cough up incrementally greater amounts, rather than suffer the much greater economic shock of having their rail network or health service declare bankruptcy and shut itself down, or the greater personal shock of having their water or electricity supply shut off due to non payment of bills. One of the indicators of capitalist inefficiency is the phenomena of market bubbles. Bubbles represent phases of economic inefficiency, of wasted productivity. Instead of capital being put to the most efficient use possible, vast amounts flow into the inflation of asset values until a loss in market confidence is triggered, causing massive asset depreciation and capital losses.
Posted on: Fri, 12 Sep 2014 12:13:57 +0000