State control V Private control

[gosimeon]

I have just finished reading "The Corporate Take over of Ireland". I can't say I agree with much in the book, but I take specific issue with a statement made by the author where he states that there is no evidence to suggest that capitalist, private companies are any more efficient or well-run than state-run monopolies. The book (conveniently from it's point of view) writes such a claim off as a myth.

What do you all think?

Personally I think this assertion is absolute rubbish. Does the left understand how competition is the driving force for efficiency? Is there a fair example of a monopoly, state-run company that is efficient?

In one of my debates with a Socialist friend of mine, he argues that competition and privatisation lead to "corner-cutting" and lower standards. However, that's exactly what springs to my mind when I think state-run monopolies. One example that springs to mind is the Russian arliner Aeroflot (I'm keen on my airlines you see...).

Now, Aeroflot was once the monopoly-holder in Russian aviation, well the old Soviet Union. Since the end of the USSR Aeroflot has been made semi-private and is the national carrier for Russia. Russia allowed strong competition for the airliner for the first time ever. It's safety record improved, as did it's fleet and pricing. Lets have a look:

Aeroflot has had 127 accidents. 126 of them happened when it was a state-control monopoly. One happened just after the "new Russia" came into being.

6,875 have died when flying Aeroflot. All but 70 died when it was a state-run monopoly.

Aerflot's fleet has also improved ten-fold since it was thrown into competition and semi-privatised. Just last March it signed a deal to purchase 22 Airbus 350-800s; a new state-of-the-art airliner. No thanks to state intrusion, however, as the Russian government is heavily taxing the purchase, trying to get the airline to buy more Ilyushin (Russian state airline manufacturer) planes, despite them being less economical and having a poor enough safety record.

So what do you think? Does privatisation help or hinder management? Is state control bad and does it hinder progress?

[Pidge]

I don't think that there's a blanket answer, but your example is a bad one.

Aer Lingus, for example, was also state owned and had a fairly good safety record. Qantas, which was privatised in the nineties had a famously good safety record.

[gosimeon]

My example is a factual one. If you think the huge difference is safety and fleet standard is a coincidence you obviously have your head in the sand. Aer Lingus was not being run by a very left-wing state, and was always on the road to semi-privatisation and privatisation. Aer Lingus was also heading for the pits financially not long ago and relying on taxpayers money when the state had a good deal of control. These days it's doing grand and growing.

[Coles]

Aeroflot has had 127 accidents. 126 of them happened when it was a state-control monopoly. One happened just after the "new Russia" came into being.

6,875 have died when flying Aeroflot. All but 70 died when it was a state-run monopoly.

I think I see the point you're making... Less people die per accident in a State-run monopoly? That can only be a good thing.

[Pidge]

Aer Lingus was not being run by a very left-wing state...

Is that your point?

[Kf]

My example is a factual one. If you think the huge difference is safety and fleet standard is a coincidence you obviously have your head in the sand. Aer Lingus was not being run by a very left-wing state, and was always on the road to semi-privatisation and privatisation. Aer Lingus was also heading for the pits financially not long ago and relying on taxpayers money when the state had a good deal of control. These days it's doing grand and growing.

Did you ever tried to drive to Cork on private roads?

Or

how about land a plane using private air traffic control?

[Coles]

Is this one of those 'discussions' where only extreme examples can be used? Right wing good, left wing bad? Can we not mention the positive inputs from both ideologies?

[gosimeon]

My point being that it Ireland wasn't a left wing state, clearly. The government still exposed the airliner to competition, which led to it trying to keep up it's competitors when it comes to fleet, safety and routes. A left-wing state like the "old Russia" was anti-competition and has a far more autocratic approach on the every-day affairs of the airline. This lack of competition greatly contributed to the disaster that was the old Aeroflot.

[HP]

From the bit you mention, the author does not to be saying that publicly owned companies are efficient. Instead he seems to be saying that there is no evidence that private companies are efficient.

Look at eircom. It was not efficient when publicly owned and is not efficient when privately owned.

[gosimeon]

The authors point was that there is no difference between the efficiency and management of private and nationalised companies.

People keep saying the eircom is some sort of proof privatisation doesn't work. The bottom line is eircom are probably more efficient than T.E. would be today. Also, another important fact is you now have a choice on who provides the service to you. You choose what's best for you and let them fight for your custom. Of course a monopoly will be less efficient; it has nobody to take away it's custom. It's common sense.