Making money for shareholders
at the expense of everybody else
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Government famously failing to deliver infrastructure.
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That was definitely sarcastic. OP posted a very anti-private industry meme, I doubt they are like, “except roads, though, I love toll roads.”
It was sarcastic to be clear.
I just did a quick google of ‘major private infrastructure projects with cost blow outs’ and lo and behold there were thousands of examples.
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Gotta say, I agree with your main point… But that is kinda the thing people point at when saying the government is inefficient. The large parts of the US infrastructure is decades past it’s expected lifespan, and the US government is not allocating enough funds to fix it quickly enough.
That’s exactly it, though. All that infrastructure got built when the government would directly build infrastructure. The Interstate System, the Transcontinental Railroad, these got built because the government got them done. It’s only since the birth of neoliberalism during Carter’s presidency, and supercharged during Reagan’s, where infrastructure only gets done through public private partnerships that things stopped being built.
Ya know what was a foundational part of the American dream? Pensions. Ya know which employers still offer them? Counties, states and the federal government.
Private companies exist solely to make the people at the top very rich based on the stolen value of employee labor while dumping catastrophic losses in the public sphere. That’s capitalism in a nutshell.
You’d have to be unbelievably gullible, naive, traumatized AND brainwashed to be a diehard for a system like that. But, somehow they’ve managed it. A deluded nation of Amway top performers just one move away from making their own imaginary millions. All simping for the system.
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You wanna know something else? The majority of the world economy is already centrally planned. Not on the national level, on the corporate level. Business is dominated by a relatively few giant corporations with internal economies the size of some nations. None of them run free markets internally. Sears experimented with it, to their demise. Central planning is already the primary way that our economic lives are driven. It’s just we let unaccountable billionaires do the planning instead of an elected body.
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My government is mostly privatized. We even hired a consulting firm to figure out how the government could lower consulting fees. The consultants found that if we consult less, we will have lower consulting fees. We paid over half a million for that single report:
https://www.theglobeandmail.com/politics/article-federal-government-kpmg-consulting/
Next step: hire a consultant to figure out how to consult less.
Government consultant here. The federal government does nothing if it is not military related or medical care in the Department of Veterans Affairs. Everything they produce is done via contract. That includes leadership which is queued up using consulting. Sure, they make the decisions but that’s not management or the visionary leadership people think it is. It’s all contract management.
Australia is a live example of the fact that they’re not. The state and federal governments have privatised a crap load of services and all they do is continue to hike our bills while providing less and less service. Electricity, water supply, employment services and more are now an absolute joke here.
Yep because what’s more important than efficient, cost effective services? Spoiler, it’s profit.
Profit for their mates and fellow shareholders, not profit for the country either.
And they don’t update the infrastructure, UK is also an excellent example of this and they are getting to the point that the government will have to step in to help them sort things out. All this so that a bunch of rich people are richer.
Exactly what’s about to happen to employment services in Australia too. They spend more money chasing a hand full of people who don’t want to work than just continuing to pay them the pittance they exist on and have people apply to be the CEO of huge corporations who dropped out of high school in order to make their quotas. Government just announced an inquiry with the aim to reinstate control over it.
This reminds me of something I’d heard about public transport operated by local governments, not sure how true it is but the theory makes sense. But basically the local public transport company ran by the local government, spends more on the infrastructure and enforcement of people paying fares than they get back in the fares themselves and that operating the services free of charge would actually reduce the cost of running the service.
Which when you start to think about how you need officers to spot check people on public transport, roll out the machines for tickets/smart cards, server infrastructure to run the machines, technicians to service the machines, IT staff to run servers etc etc it does somewhat make sense
Yes, if not for when the Labor (sic) party got into power that one time, we’d all still be stuck on ADSL2 at best, and dialup at worst, depending on how close you live to a major-ish city. The NBN was a government infrastructure initiative. One which got gutted and watered down as soon as the Liberals got back in.
Oh, and I’ve heard industry insiders claim that the mixed technology stack employed in the “new NBN” – FTTP for some places that already got it, FTTN for everywhere else in the city, fixed wireless or satellite for rural areas – is more expensive on an ongoing basis due to complications than just rolling out more fibre would have been in the long run.
Not to mention the state of ISPs in Australia. I believe you pay more for less than almost every country. Two exceptions being the US and Canada.
Only someone who has never worked for a large corporation could hold the belief that corporations are efficient at making their product.
They’re very efficient at funneling money to their executives and owners though.
Only someone who has never worked for the government could hold the belief that they are more efficient at doing anything at all at any time.
I’ve worked for the government both as an employee and a contractor. I’ve also worked for small and large companies. The government was by far better at accomplishing the actual objective / product. The worst government entity I worked for though was a city government. Those are terrible.
My mom mockingly said once “do you want your doctor visits to be just like the DMV?”
Nope, I want my doctor visits to be more like the USPS. Compare their numbers to UPS or any of the others and it’s night and day.
My last trip to the DMV was surprisingly smooth. They finally implemented appointments, and, unlikely private doctors, they didn’t make me wait in the lobby for 30minutes to 1 hour and then in the examination room for another 15-30 minutes.
My mom mockingly said once “do you want your doctor visits to be just like the DMV?”
My answer would be “yes, because that’d be an improvement!”
I remember in college we took a course on economic efficiency and the short takeaway is “the free market is extremely efficient, but only when the competing parties start with equal resources. the more inequal the starting position, the less efficient the market becomes.” and to my mind that suggests that we should enforce some sort of “rubber-banding” effect so that a company needs to keep competing or else it will “drift” back to the mean over time. Something like aggressive taxes on the uber-rich and comprehensive welfare for the poor, y’know? Capitalism but with safety guards would be pretty cool.
Something like aggressive taxes on the uber-rich and comprehensive welfare for the poor, y’know?
This is why aggressive estate taxes are so incredibly critical. People shouldn’t be professional descendants. And of course welfare provides both ladder and safety net. The fools who are trying to abolish one or both are working against social mobility.
Because they think social mobility is wrong and bad for society
There is a reason why the European/Scandinavian economic model works so well.
Give it 10 or 20 years and we’ll basically be the US, but with really high taxes
You gived 10 years 7 times in a row
Yeah, mixed economy undeniably works!
I think just don’t allow other companies to buy others. Mergers should be illegal.
I mean, they are (at making profit), but funnily enough, you can’t run a society when everything is profit driven 🙄
That’s literally uncomparable. Government does things that ignore profit. That’s what government is for. The provide services at a loss. The only “profit” might be things like societal improvement, education, security, and such.
I think that’s exactly the point they’re making
That’s literally uncomparable. Government does things that ignore profit. That’s what government is for. The provide services at a loss. The only “profit” might be things like societal improvement, education, security, and such.
People pay taxes that fund the government. If the money is wasted then services suffer. So it’s not profit or loss but they must deliver value. Value is harder to quantify than profit but governments have to figure a way out of doing it and provide incentives to staff to deliver it.
They are often on purpose, as political decision. So that it is easier to push for privatization
Having worked for both, I would say that most government offices are eternal, whereas private companies can vanish quickly. Sometimes without warning. Its really hard to kill a government office.
Makes me wonder, how did a necessary office survive during a junta or an overthrow? For example, how did the office of a postal clerk change from 1925 to 1955 in, say, Berlin? How does the average Salvadoran DMV worker view the changes in El Salvador since 1980?
How was a tax office run in ancient Babylon versus a modern one today?
I bet there’s some weird insights into human civilization to be found in those stories.
My understanding is that the more removed you are from the “top” of the government pyramid, the less you are affected by disruptions of that position. Largely when a new face or party takes over (by force or otherwise) very seldom do they want to rebuild everything from the ground up and will keep most of the bipartisan offices untouched.
If a very violent coup is successful and they’re planning punishments for all “government officials” the postman in a rural village is going to be pretty low on that list.
Same as any other large organization, I suspect.
Anyone who worked in both private and public would know both are not more efficient than the other.
Public services are chronically underfunded because of corruption. Private companies perform rabbit in a hat trick by making you guess what undisclosed ingredients they put in your food if they’re not regulated, just so to save cost and make money for themselves!
If these last few years have taught us anything.
They are putting undisclosed ingredients into the food even if they are regulated.
Slim Jim - now flavored with microplastics and preserved with forever chemicals
Slim Jim’s were the original forever chemicals. You ever seen one go bad?
Private companies are why Flint still has lead water pipes, and why Texas doesn’t have a working power grid, and why you and I are facing a 30%-50% increase in our cost of living.
There needs to be MORE regulation. Not less.
They’re efficient at maximizing profits for shareholders, usually at the dire expense of literally everyone else.
I think a big issue is that the government takes a decades long view. This is great because they can plan how to effectively manage our water and other large scale projects with longevity in mind.
Meanwhile, our corporate CEOs take a quarter of a year view. They’d burn the company to the ground as long as it happens after they are stepping down and makes them look good beforehand.
the government takes a decades long view
You mean four year term view? They dont give a shit about what happens next. If they did they would do something against climate change
Ah I wasn’t clear. I don’t mean government as in Democrats or Republicans. I mean government associations like US Army Corps of Engineers or the US Postal Service.
Maybe we should start a US Army Climate Battalion or something to sound cool and get funding 🤔.
as long as it happens after they are stepping down and makes them look good beforehand
Or if they have a golden parachute.
One point here: the government doesn’t pay out a large chunk of it’s earnings to people who did nothing to ensure that the product or service was delivered.
They got paid a large percentage of revenue because they’re shareholders.
Tell me again why taking a big pile of money from customers, who are very likely not wealthy (at least for the majority), and giving it to wealthy people, is “more efficient” than the government doing the same job and just, not doing that?
If you cut out the profit, the “business” runs more lean, no matter which way you arrange the numbers. I would argue that a more lean business model is simply more efficient. The dollars going in simply result in more output per dollar. IMO, that’s efficient.
Am I taking crazy pills here?
While I agree with you completely, the argument for a counter-point would be that exactly because the private company should create as much profit for the owners as possible - it has to be as lean / efficient as possible.
That is not true for “the goverment” as profit is not an encentive to rationalize the work process.
What I find interesting are goverment agencies that operate on both levels. A great example is Ordenance Survey in UK. While they provide a public service, they also sell some of their products commercially to cover some operating costs (hiking maps etc.).
because the private company should create as much profit for the owners as possible - it has to be as lean / efficient as possible.
Yeah but no. It would be if the owner/shareholders weren’t skimming of the top. The process may be lean but the pricing is designed to maximize and take as much as the market will bear. Which undoes the benefit the efficiency could bring to a public service.
But the shareholders didn’t do nothing, they provided capital.
Except they didn’t. Whomever purchased the stock initially did, and often that amount is a shadow of what the stock is currently traded at.
It’s also a figure that’s been repaid over and over again as dividends have been paid.
With government organizations, the public, aka debt devices, aka the public wallet, pays for the initial investment. Once that investment is made it pays for itself over and over in goods and services over the lifetime of the investment.
Shareholders are basically the landlords of wall street. They contribute nothing and feel like they deserve everything.
Except they didn’t. Whomever [sic] purchased the stock initially did, and often that amount is a shadow of what the stock is currently traded at.
This ignores two other very important roles that subsequent shareholders play:
- Give initial investors the opportunity re-deploy their capital elsewhere when they choose to do so.
- Signal the value of the company’s equity, in real time, on the open market. When the stock is trading above IPO price (as your rebuttal implies), this enables the company to raise more capital by borrowing against its equity and/or selling shares of its own stock.
In light of these critical roles, it’s vastly unfair to say that shareholders contribute nothing to the delivery of goods and services—quite the opposite.
this enables the company to raise more capital by borrowing against its equity
You can always get asset backed loans, even as a company, why should we be welfare for businesses?
Also you would need an uncaptured market for anything you said to even have an effect, when 90% of trades are completed off market not effecting the price on the tape are we really doing anything but getting fleeced by market makers? You aren’t signaling anything when your trade data is being bought and hidden from the market using PFOF techniques.
In light of the objective failures of our market it’s extremely fair to say shareholders have no contribution to the delivery of goods and services. Could they in a perfect market sure, but I could have everything in utopia, to bad that doesn’t exist.
why should we be welfare for businesses?
Who said anything about welfare?
Okay, I’m not getting into a debate about organizational behaviour, economics and finance with an unarmed person.
Good day to you sir/madam.
For the kids reading at home, this is what an ad hominem attack looks like—a logical fallacy in which one attacks their opponent personally instead of addressing the merits of their argument.
I’m just tired, and the context of your statements show a dramatic lack of understanding for how business operates.
Good luck tho. 👍
