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Old 11-03-2011, 09:54 AM
 
913 posts, read 870,066 times
Reputation: 171

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Obviously it is important to first distinguish between Privatization and Piratization though! smple rule of thumb, if the state sells a govt owned enterprise below market value, includes subsidies, special contracts or monopoly privileges (eg excessive obstacles to market) that is Piratization and just about every example you care to mention from around the globe falls into that category.

i recently came across an example where privatization was employed and turned out to be highly successful! if you don't want watch the whole thing start @3:38 in the video, he clearly defines the difference between piratization and privatization. piratization being what the world bank and imf recommended, privatization being the actions that they took!


The Guatemalan Telecommunications Miracle: A Conversation with Alfredo Guzman - YouTube
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Old 11-03-2011, 11:27 AM
 
3,045 posts, read 3,184,772 times
Reputation: 1307
You're so jazzed about this yet you can't find a way to explain it? Your little link shows up as a big "plug-in not installed" on my laptop. If you're too lazy or too disinterested to explain what you're writing about, why should anyone care?
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Old 11-03-2011, 11:36 AM
 
Location: Dallas, TX
31,767 posts, read 28,739,560 times
Reputation: 12341
Anything works, or fails, depending on what kind of people are running the show.
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Old 11-03-2011, 12:01 PM
 
913 posts, read 870,066 times
Reputation: 171
Quote:
Originally Posted by noexcuseforignorance View Post
You're so jazzed about this yet you can't find a way to explain it? Your little link shows up as a big "plug-in not installed" on my laptop. If you're too lazy or too disinterested to explain what you're writing about, why should anyone care?

oh dear, it's a youtube link. perhaps you should install the plug in though.

the just of the story is that in the late nineties, guatemala had a govt run telecoms monopoly. the new govt wanted to expand access as there were lenghty waiting times to get lines installed etc etc.

the imf and world bank strongly suggested selling off the state monopoly and then turn around and set goals and targets by regulating them. leadership in guatemala decided that this avenue wasn't particulary successful everywhere else it had been tried. instead what they did was open up the market to whomever wanted to get in. they removed the monopoly power from the state operator and created a free market in telecoms. the result is that they, as a 3rd world country, have telecoms services and infrastructure every bit as advanced as most first world countries. the cost to the taxpayer was zero! that is the way privatization is supposed to work.

everywhere else, what they did was sell off the state owned monopoly whole or to a handful of operators. the family members of several politicians would get cushy jobs at the new private monopoly/cartel. as expected, services wouldn't really improve but the new operators would take huge profits. if there were losses, the taxpayer would be extorted to pay them etc. that is called crony capitalism and it is rife in most countries on the planet
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Old 11-03-2011, 01:18 PM
 
913 posts, read 870,066 times
Reputation: 171
Quote:
Originally Posted by EinsteinsGhost View Post
Anything works, or fails, depending on what kind of people are running the show.
i actually agree with you on something...... BUT that isn't the point. when the private sector fails, their shareholders, bondholders, management, employees etc generally pay the price financially. the govt has a different incentive structure. when a govt dept fails, the heads of that dept go to congress and say that they failed because they didn't have enough money, power or both.

in recent times, some private companies have been able to extort the taxpayer with horrendous ramifications. the too big to fails know that they can run up the the geithner/bernanke atm and get whatever they want. imo this has made them even more reckless becausthey know that the bailout is just a media scare away
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Old 11-03-2011, 01:23 PM
 
Location: Dallas, TX
31,767 posts, read 28,739,560 times
Reputation: 12341
Quote:
Originally Posted by sammbriggs View Post
i actually agree with you on something...... BUT that isn't the point. when the private sector fails, their shareholders, bondholders, management, employees etc generally pay the price financially. the govt has a different incentive structure. when a govt dept fails, the heads of that dept go to congress and say that they failed because they didn't have enough money, power or both.
Both failures result in pain. Do you think people were just fine with banks failing left and right with absolutely no security to their savings during the Great Depression?

The key to avoiding pain is not to put idiots in-charge, people who complain about government being the problem should never be allowed to be the government.

Private enterprise and government, both have a place and should be considered, but neither exclusively. Extremism is where we get in trouble.
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Old 11-03-2011, 01:39 PM
 
913 posts, read 870,066 times
Reputation: 171
Quote:
Originally Posted by EinsteinsGhost View Post
Both failures result in pain. Do you think people were just fine with banks failing left and right with absolutely no security to their savings during the Great Depression?

The key to avoiding pain is not to put idiots in-charge, people who complain about government being the problem should never be allowed to be the government.

Private enterprise and government, both have a place and should be considered, but neither exclusively. Extremism is where we get in trouble.

you're talking to someone who believes that the deposit guarantee was one of the root causes of the financial crisis. acquiring interest, like all business requires risk. it is unjust to put that risk onto the backs of the taxpayer. if you can't bear the risk of storing your money under your mattress or in a lending bank, you should keep your money in a non lending bank and pay for the service. if you want interest and a subsidized banking service then you should bear the risk
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Old 11-03-2011, 01:49 PM
 
416 posts, read 635,534 times
Reputation: 156
Quote:
Originally Posted by sammbriggs View Post
oh dear, it's a youtube link. perhaps you should install the plug in though.

the just of the story is that in the late nineties, guatemala had a govt run telecoms monopoly. the new govt wanted to expand access as there were lenghty waiting times to get lines installed etc etc.

the imf and world bank strongly suggested selling off the state monopoly and then turn around and set goals and targets by regulating them. leadership in guatemala decided that this avenue wasn't particulary successful everywhere else it had been tried. instead what they did was open up the market to whomever wanted to get in. they removed the monopoly power from the state operator and created a free market in telecoms. the result is that they, as a 3rd world country, have telecoms services and infrastructure every bit as advanced as most first world countries. the cost to the taxpayer was zero! that is the way privatization is supposed to work.

everywhere else, what they did was sell off the state owned monopoly whole or to a handful of operators. the family members of several politicians would get cushy jobs at the new private monopoly/cartel. as expected, services wouldn't really improve but the new operators would take huge profits. if there were losses, the taxpayer would be extorted to pay them etc. that is called crony capitalism and it is rife in most countries on the planet
ummm...this sounds like regulated, open market competition. has little to do with privatizing a government run operation.

we could discuss the semantics of the "word" but why bother....every issue is site, time and industry specific.

take america for example....massive push over the past 30 years to "privatize" government services. now the majority of american workers work for GSA companies so they are "de facto" part-time federal employees.

and exactly how did the government save money by privatizing?
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Old 11-03-2011, 01:51 PM
 
416 posts, read 635,534 times
Reputation: 156
Quote:
Originally Posted by EinsteinsGhost View Post
Both failures result in pain. Do you think people were just fine with banks failing left and right with absolutely no security to their savings during the Great Depression?

The key to avoiding pain is not to put idiots in-charge, people who complain about government being the problem should never be allowed to be the government.

Private enterprise and government, both have a place and should be considered, but neither exclusively. Extremism is where we get in trouble.

it's hard to avoid having idiots in charge when the top down approach to management (pretty standard approach) starts with the election of public officials

your last statement is understated and needs to be shouted from every street corner
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Old 11-03-2011, 02:15 PM
 
913 posts, read 870,066 times
Reputation: 171
Quote:
Originally Posted by davehalo View Post
ummm...this sounds like regulated, open market competition. has little to do with privatizing a government run operation.

we could discuss the semantics of the "word" but why bother....every issue is site, time and industry specific.

take america for example....massive push over the past 30 years to "privatize" government services. now the majority of american workers work for GSA companies so they are "de facto" part-time federal employees.

and exactly how did the government save money by privatizing?
they privatized the industry. like i said in the op, there is a big difference between privatizing an industry and piratizing an industry. we often confuse the sale of govt monopolies as privatization. if there are strings attached, generous no bid contracts and monopoly privileges like just about every US example you care to present, that is pirate-ization. when this happens, the consumer, the taxpayer or both generally get the shaft. govt cronies make off with a kings ransom. when you privatize, the taxpayer gets a break, the consumer is generally better off and the people who make money are the ones who provide what people want!

in this case, the govt operator used to run at a loss. this loss was paid by the taxpayer. opening the market to fair competition, withdrawing subsidies and regulations, costs the taxpayer nothing. the market participants put up all the infrastructure, they pay for the maintenance etc. that saves the taxpayer a bundle
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