privatize this

I will concede this about privatization: it puts more than one company in a particular market, forcing those companies to compete on price or quality or service, which is ultimately good for the customer. Remember when the government broke up AT&T’s monopoly in the 1980s and you started getting all those annoying telemarketers from Sprint and MCI trying to get you to switch (if you lived in the U.S. at the time)? Yeah, it was a pain in the ass, but now you have cheaper long-distance, or more frequent-flyer miles, or the chance to do some good when you pay your phone bill. There’s something for every market, pretty much. This is good.

Unfortunately, the gospel of competition -> customer choice -> greater good is being overapplied: there are areas where this policy can’t work. Train travel is one such area. I did some train traveling in England in, um. 1992? 93? (Melanie?) Before the whole privatization mess, anyway, and the trains were reasonably clean, efficient, and on time. I went to England again in 1998. Stations were filthy, tickets were prohibitively expensive, nothing was ever on time, elevators and escalators were broken more often than not.

Private companies have shareholders to answer to, as the government does not: that means they have to maximize profit, which means they try to minimize costs, and minimizing labor costs means contracting services out to the very lowest bidder, which can result in serious deterioration in quality. From what I saw, the people they’ve contracted to clean and repair the stations may be simply pocketing the money. Ditto the maintenance guys: the Potters Bar crash happened because the company responsible decided to cut costs by skimping on inspections.

The thing is, these private companies each have a monopoly on the routes they control, so passengers still have no choice. If you commute from Oxford to London, and the company responsible for that route sucks, what are you going to do, commute to Bristol instead?

All of this is a very long way to say that I am not at all happy about the Deutsche Bahn’s decsion to privatize. Prices will get even higher (seriously and without exaggeration: for travel between big cities in Germany, it’s already cheaper to fly) routes will be cut, jobs will be cut, and those who do manage to keep their jobs, well, I hope they fire the stupid employees, and the mean ones, but I doubt that they will.

Incidentally, the Potters Bar crash? Seven dead, no criminal charges filed, and six top executives of the company responsible walked out with a combined $1,450,000 in bonuses. So you can see why this would seem like a good idea to the Deutsche Bahn bigheads. For everybody else, though, it’s just going to be a big headache.

Song du jour of the day: for Switzerland, Paolo Meneguzzi with Era Stupendo! I hear the Swiss have excellent trains.

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4 responses to “privatize this

  • amy

    Is there anything Swiss-made or -run that isn’t excellent? (And what does it say about me that I immediately think “chocolate,” and THEN knives, watches, and banks?)

  • Melanie

    1993, June and July. Funny, we compared notes and Kick was in Paris the same week Kim and I were.

  • Nate

    more interesting to me on the privatization question is Social Security in the US (though it’s not a huge issue at the moment). From what I understand, even if it were privatized, the default choice would still be folks’ 1%/year (or whatever it is) guaranteed return, but the rest of us that think we could get 4-6x that reasonably safely would have the option to do so. I must not know enough about it, because honestly, when it was being debated a few years ago, I could never find anything real that logical people would be afraid of. It was always Greedy McBankerpants vs. Chicken Little the Investor. Let me know if you’re aware of a source of level-headed info on that.

  • alala

    @ Amy: yes, well, lately they’ve been doing xenophobia really well, too, unfortunately.

    @ Melanie: right, thanks. That’s weird, about Kick, but hey, it is a small world. DrBob and I trekked up to this leather market in the Andes, where I bought a purple fish coin pouch, and we ran into (of course) a German tourist. Well and good, German tourists are everywhere, but we ran into him again about six months later, at a party thrown by DrBob’s old roommate. In Munich.

    @ Nate: We don’t hear a lot over here in Yurp about privatizing Social Security, but I did happen across this thing by Robert Reich today, just a few minutes before I read your comment. He doesn’t really seem to address your question, and doesn’t supply any links to other information, but there’s a fair bit to work with in the comments.

    I know what you mean about the dearth of balanced information, though. Some things are durn near impossible to research.

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