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Is "privatized" better?

I often heard, in last ten years, that "private is better".

Private, opposed to "public". And "opposed" is not a term I'm using by chance.

The argument, in Italy, applies to the many public utilities managing water, railways, transport, health, and other facilities traditionally owned by the State or local communities.

I guess we all know it. In short, public utilities are presented by their very nature inefficient and prone to waste of money. "Then", a natural black hole for taxes. "Then", the only reason taxes are "so high".

"Then", something to be cut off. Kill these expenses, and taxes will decrease.

On the opposite side, proceeding on the same line of reasoning, private owners are dogged to manage their properties efficiently. This means lower cost, in a regime of free market. And maybe, hopefully, you may even get a more effective management.

Experience, in Italy, speaks right the opposite, after many utilities have been privatized.

Railway transport has dramatic problems of cost and inefficiency an order of magnitude larger now, after privatization, than when public.

Where water supply has been privatized, bills have always increased much beyond the most pessimistic fears, and the investments asked for as a condition to allow privatization have never been made.

Alitalia, a dying public company, has finally dead as private after it has been crazily splitted in a "bad company" owner of all debts (paid by Italian contribuents with taxes and an increase of Italy's monumental public debt) and a "good company" which later on proved not as good as imagined, to flounder miserably thereon. (Alitalia formally still exists, but profits are floundering and debts accumulating - now in private hands).


Sure after something public has been privatized, we all citizens have been spoiled of something ours.

After that, our taxes has not decreased (public utility weight over the system was, apparently, marginal after all). And in addition, we have to pay some private owner, so that our costs have individually increased.

Is this a specifically Italian phenomenon? Sure we here have a high density of criminality, a diffused political corruption and incompetence, and little experience with the concept of "public ownership".

But some aspects are, I feel, universal - and worth investigating.

First and foremost, in my view, there exist activities which are "necessarily" a financial loss, if you restrict attention to cash.

School for example. It's obvious they can't generate immediate profit. Of course, they generate culture and future wealth, in the children they educate.

Or railways. No way you try managing them, they generate "financial losses".

School, or railways, may be made private. But then their owner has the very big trouble of how generating profit from an activity which is inherently a loss. How?

A way is, by reducing size and/or quality of service.

Sell "lessons and diplomas" to the small minority who may pay for it, and to the hell all others.

Split railway system in a high-profit small activity (the Milan-Rome high speed path and few more) while disbanding or foisting to Regions the beaten-up wrecked commuter trains.

Another way is, postponing (translation: killing completely) investments.

This is common in water industry. Would the investment promised when preparing tenders be really made, the company would be never profitable at an acceptable price. Then they are promised, and never done.

I might continue a lot.

But the real problem is, why is not "possible" to manage public facilities and goods sensibly? It would be infinitely simpler to manage according to sound good practice, and encourage meritocracy, right in the public.

If something the private may teach to the public, this is the normal way private houses are managed. Sensibly. Avoiding irrational risks. Squeezing any possible bit of time to juggle a ton of things all occurring concurrently.

Sure that of "sensible management" is not in the most practiced toolbox of "top notch managers", used to politicking and face work, high risk, and maximizing personal reward.

But then, why not simply replacing them? After all, these ineffective fellows are not exclusive to public facilities, they also abound in private companies.

Women are needed. And quite desperately.


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