<story><title>Examples of How City Services Privatization Leads to Inequality Are Piling Up</title><url>https://nextcity.org/daily/entry/privatization-water-utilities-inequality-poverty</url></story><parent_chain></parent_chain><comment><author>nkoren</author><text>I consider myself a relatively gung-ho free-market type, where it&amp;#x27;s appropriate. Utility and transport networks are one place where it isn&amp;#x27;t appropriate. This is for three fundamental reasons:&lt;p&gt;1. A free-market dynamic requires an actual market. If the buyer can&amp;#x27;t chose among competing sellers, then it&amp;#x27;s not a market. At the grocery store you can choose from among many different sellers: that&amp;#x27;s a functional market. The point where your plumbing connects to the water main, simply isn&amp;#x27;t.&lt;p&gt;2. The entire purpose of infrastructure is to generate positive externalities. Ready availability of transport, water and electricity, etc., makes it easy and desirable to do business in a place and with each other. This leads to emergent urban economies, where mutual comparative advantage among a heterogeneous population leads to mutually beneficial exchange, which in turn leads to more growth and prosperity for everyone. The fewer low-level frictions, the more prosperous everyone becomes. But capturing value at the point-of-use -- which is what private operators generally do -- creates a low-level friction with substantial knock-on effects. Every dollar you extract from the farebox of a public transport system, for example, is many dollars removed from the wider economy. It&amp;#x27;s much more appropriate to subsidise the infrastructure networks and then tax the positive externalities (via sales, income, and property taxes) &lt;i&gt;after&lt;/i&gt; the uplift has been created.&lt;p&gt;3. There are broader socio-economic issues of accessibility to services that profit-driven companies have no incentive to be responsive to.</text></comment>
<story><title>Examples of How City Services Privatization Leads to Inequality Are Piling Up</title><url>https://nextcity.org/daily/entry/privatization-water-utilities-inequality-poverty</url></story><parent_chain></parent_chain><comment><author>csomar</author><text>These are examples of monopolies, and not free market. I think, and it&amp;#x27;s my opinion: If you make something private in a &lt;i&gt;free&lt;/i&gt; market, it&amp;#x27;s always good for quality and prices.&lt;p&gt;There are two possibilities that can make this promise false:&lt;p&gt;1. The market is not free. For example, a metro subway. It&amp;#x27;s a monopoly. You can&amp;#x27;t have 6 subway lines and you pick one of them.&lt;p&gt;2. The market was heavily financed by tax payers money. For example, a bus route that it is not profitable but still running for the benefit of the few poor people using it. This can happen in a government situation but not in a private situation.</text></comment>