Wednesday, March 13, 2013


Hell, while I'm taking pot-shots at Caitlin Moran from the safety of my own obscurity, her column in last week's Saturday Times really was a crock of shit. Predictable, tired, left-wing shit. It's lede was the radical and original thought that we should probably just go ahead and renationalise rail, electricity, gas, water and telecoms, either now or soon, because privatised industries are less reliable, more expensive and less innovative than state-run alternatives.

Which is, not to put too fine a point on it, bollocks. As the OECD report on the effect of privatisations in the UK put it:
The evidence shows that the privatised utilities and infrastructure providers:
increased labour productivity, and sometimes total factor productivity, at rates faster than those generally achieved before privatisation;
offered real price reductions (except in the water industry, where higher charges were needed to fund significant quality improvements). In the telecommunications and gas industries in particular, prices have fallen at a faster rate than they did before privatisation;
achieved sustained improvements in levels of service quality, especially in the telecommunications and water industries; and
provided very substantial contributions to public sector finances.
 Or, as a paper by the PSIRU puts it, in relation to electricity privatisation:
Consumers basically want two things from their electricity supplier: reliability of service and affordable prices. By these criteria, electricity privatisation in Britain appears to have been a success: since privatisation in 1990, reliability has remained excellent and prices to small consumers have fallen in real terms by about 25 per cent.
And then there's this:
Competition, and the market, is supposed to make a business keen – carnivorous. But there doesn’t seem to be much... intelligence involved here. No plans. No big innovations. British Telecom were telephones in this country – and yet, somehow, as a privatised firm it totally missed the boat on the mobile-phone explosion.
We know by now not to expect much in the way of research from Moran, but c'mon. Hasn't she heard of Cellnet? Which turned into 02? And, whatever you think of BT customer service these days, it's a damn sight better than when it was run by the Post Office (via):
We needed a telephone and a photo-copier. We were told by the Post Office, which ran the state monopoly telephone service, that there was a fourteen-month wait to have a line and phone installed. We somehow bargained them into doing it within six weeks by pointing out that our predecessors in the building had used a switchboard with four separate telephone numbers, one for each of the companies that had used the place, and all we wanted to do was to re-activate one line. Until the GPO engineers came, we had to conduct all the new Institute’s business from the public call box on the corner, and we ensured we kept a ready supply of coins for the purpose.
The Post Office would not let us buy a phone; we had to rent one from them. This was their standard practice. The instrument they graciously allowed us to rent was a black, Bakelite instrument with a rotary dial, designed in the 1930s. For this magnificent piece of equipment we had to pay a quarterly rental of £14.65, or just under £60 a year. We overcame the problem by rewiring the place ourselves with extensions, and buying US phones on our visits there, complete with conversion sockets. This was contrary to all the Post Office rules, but it worked. And it meant that we were among the first in Britain to use such gadgets as recall dialling, wireless remotes and one-button dialling of our most-used numbers.
All this could still be ours! If the Times want someone to write about economics in an accessible and entertaining way, why not employ someone who has the first fucking idea what they're talking about.


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