From: hammons@syl.dl.nec.com (Bud Hammons)
Subject: Re: privitization (was Re: Andre Marrou/Nancy Lord in
Organization: speaking for myself.
Date: Fri, 24 Jul 1992 19:52:33 GMT


In article <1992Jul24.122604.14133@husc3.harvard.edu>, koumis@husc4.harvard.edu (Anthony Koumis) writes:
|>
|> [edited for brevity]
|>
|> I think the problem is that people think that private business
|> is automatically well run, competent and will make a profit.
|> That is a myth.  Just look at GM, what were they doing when
|> Japanese cars were making inroads.  GM was developing
|> dud cars, that no one bought.  As a result, they lost alot of
|> money.  They kept on paying the managemtn that cuased this in
|> the first place lots and lots of money but fired the workers.
|> THis is not efficient planning.  Private business or state run
|> business are no guarantee for efficiency.
|> 
|> But lots of people think that private business equals efficeincy.
|> How many of you have heard people say but I have business
|> experience as if this is supposed to mean they are efficeint,
|> and clever.  Fiddle-dee.
|> 
|> [edited for brevity]
|> 
|> York privatized its buses and their service was terrible.
|> 
|> 
|> >For things to get better after privatization, taxes have to go down
|> >instead of having the government simply find different useless
|> >projects to use the tax money on.  Did that happen?
|> >
|> I think Maggie lowered the tax rate.
|> 
|> 
|> >One big problem with the UK is that it is too unionized.  With too
|> >much legally entrenched groups who oppose changes to the status quo,
|> >you can't have progress.  Did Thatcher change the legal status of the
|> >unions?
|> 
|> 
|> Since you seem to think unions caused this problems (I gueess
|> overpaid, incompetent managers and planners like at GM dont have any
|> affect on mismanaged businesses) you will be happy to know that Maggie 
|> gutted the unions.
|> 
|> 

Mr. Koumis is apparently unaware the he is helping to make one of the most
compelling arguments about privatization: in an imperfect world, filled
with imperfect people and imperfect organizations, a society is best
served if it can limit the effects of individual or group failures.

The traditional statist tendency is to centralize planning and aggregate 
control into large bureaucracies which are granted exclusivity BY THE
GOVERNMENT in one or more domains.  These bureaucracies represent potential 
'single point failures' for the society, where there is no built-in failsafe 
backup when that institution fails.  History tells us that all institutions 
occasionally falter, and that no amount of oversight and superordinate 
bureaucracy will prevent some eventual failure of a given institution. 

Societies can be viewed as very long-lived systems in which adaptability and 
fault tolerance are cardinal virtues.  The only successful fault-tolerant, 
adaptable mechanism we have yet identified is a limited government and a free 
market of goods and ideas.  Those who continue to insist on centralized 
control and regulation as the default answer to all problems apparently 
don't wish to cope with that reality.

No competent engineer would willingly design a life-critical system that 
featured a vulnerable component whose individual failure could significantly 
impair or destroy the system as a whole, nor would the possibility of failure
be dismissed.  Those who fancy themselves "social engineers" would do well
to consider the example. 

regards,

-- Bud Hammons
speaking for myself
  

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