How successful have the privatisations of the railways and postal services in the Netherlands proved? Were any improvements most advantageous for individual users, for companies, for investors or for the government?

That’s hard to say.

In General, it is not advisable to privatise vital infrastructure.This applies to the electricity grid, the railway lines, the (water) roads, ports and airports, the money traffic and the spending of money, but at this time also the Internet. Why is that not useful? Because, as a Dutch government, you lose control over that infrastructure. In some cases to companies controlled by other governments.

China is very active in this and will be able to gain influence through European acquisitions in Europe.As Albert Heijn could afford to compete with price dumping independent greengrocers and bakers from a village where such a supermarket came, and then silently raise prices and thus acquire a local monopoly, so can China will afford to monopolize or dominate every manufacturing industry, but in the long term, any kind of service through price dumping. Once it has the economies of scale, new competition is very difficult to realise and very easy to switch off by temporarily selling below the cost price.

If you are curious which banks are the most valuable in the world and you think that they will be American, Swiss, German, English, banks, then I have to disappoint you.The first four are Chinese banks. And those are not a little bigger, but just twice as big as their American counterpart lower in the top ten. And they are also growing twice as hard in percentage. So they are also running out of the box.

Another point of weighting could be how much happier we have all become of those privatisations.

And then you can see in Norway how you can do better than in the Netherlands.

For example, the gas and oil extraction is not privatized as in the Netherlands, but the proceeds go to the government. Not to be souped up, but to contribute annually to the fight against public expenditure through the return on that property. In other words, to contribute to collective spending without a proportional increase in taxes.

There is much more to say about it, especially in the point of demography and human happiness, and the coherence between them, (read what Jan Slats has to report on that) and I will add that later.

I think the real big losers are the employees.Instead of a permanent job, it is now often 芒 鈧?艙independigen芒 鈧?

In my opinion, it may not have gotten cheaper, because now three different postal deliverers run through the street, each delivering a 漏 脙 漏 n Letter.How efficient is that?

These are tricky questions because:

  • What seems to be a failure in public opinion is possibly the purpose of privatisation, namely solid cuts in an outdated sector of the Dutch economy.
  • By the delusion that it had been bad if the NS had become a monopoly, the government proceeded to large-scale capital destruction by splitting off ProRail.

This kind of vandalism interferes with many privatisations.

  • We do not know what happened if the government had chosen a different way.
  • That’s why I take a few steps back before I get to the question in.

    When is a privatisation successful?

    In the private sector, market force offers a counterweight to politics and bureaucracy.Companies are forced to set up the tering to the nering 芒 鈧?”even if those decisions are not popular or go against the leaders ‘ hobbing horses. That is much less in the public sector. For example, government officials have already determined years ago that the Slotervaart hospital was a waste of money, but only after we got more market action in the care, it went bankrupt. Still some try to make political profit by putting other people’s money into that hospital.

    If politicians want to privatise an organization in the public sector, then they do not say that solid energy-saving ‘ including a strong sobering of the offered services ‘ are necessary, let alone that market can perform better than they do.Indeed, the people are not wise enough to agree. Instead, privatisations are sold to the voters as more-with-less: better services that the state costs less money. However, markets cannot work wonders and waste of money is usually just a waste of money. So if a privatized organisation is lost on the free market, it can also be called a success. For the politicians, they can blame the market, the people are being kicked out of it every time. At the same time, the economy has become more efficient.

    Public sector organisations are often monopolies.Missing those after privatisation no market force?

    This is usually a misconception.If the NS increase their prices, then their customers divert to Auto芒 鈧劉 s, ships or even planes. Their service is not 芒 鈧?虄transport by Rail 芒 鈧劉, but 芒 鈧?虄transpor芒 鈧劉. There is therefore no lack of competition or market operation. The same goes for postal services: they may have a monopoly on post, but that is not the only form of communication that people can use. The fact that the market has long been competitive alternatives is usually a reason for privatising an organisation in the public sector. As a so-called monopoly, many public sector organisations have large economies of scale compared to their competitors in the private sector. If these organisations are broken down by privatization, those economies of scale will be lost. No one gets better from that.

    In free markets attracts profit competition.A monopoly that makes a lot of profit in a free market will therefore struggle to remain a monopoly. If a monopoly does not make much profit, the economies of scale largely go to the customers and the employees. Monopolies in free markets are therefore not a social problem that the government cost should be avoided. The fight against monopolies can be better directed against permits, which can protect monopolies against the competition that could attract their profits.

    What if the Government had not been privatized?

    This is still the most difficult question.The difference in efficiency between the Dutch government and the Dutch business sector does not seem to be large at all. Many of the difficult decisions that have now been taken by markets, the Government had also made, but a little later and a little different. In this, the mistakes made in the actual privatisations may have been avoided. ProRail might not have existed at all if the government hadn’t privatized had芒 鈧?”but maybe something else went wrong.

    Left-wing idealists will surely know that the worker’s paradise had been realised if the government had not privatized it.Straight idealists will certainly know that the Netherlands had become a third world country. However, my imagination does not go beyond 芒 鈧?艙marginally less economic growth 芒 鈧?for the Netherlands without the favourable increase in market functioning that privatisations brought.

    How successful have the privatisations of the railways and postal services in the Netherlands proved?

    If we do not count the nasty consequences of the damaging attempts to prevent monopolies, I will come out at 100% successful.Hard but necessary cuts are made. The people do not like that, but blame the market and former politicians who have long enjoyed a fat-paid commissariat. I can’t recommend anything better.

    Were any improvements most advantageous for individual users, for companies, for investors or for the government?

    For the privatisations, wealthy people in the Netherlands already had a pleasant existence, where there was not much to improve.It is therefore mainly the working class that has benefited from extra economic growth. I have already touched on the benefits for the government a few times.

    It varies by sector and by privatized species.In general, you might argue that post may have better success for individual users than for example railways.

    Both rail and post were initially monopolist (that is actually largely still, certainly the track) and a monopoly is economically inefficient.Monopolies also provide technological disadvantage because market imperfection does not pay much for investing in technological improvements. So in the long run you can say that privatisation is also good for the companies. To give a preview: Just look at the telephony, formerly also a monopoly along with the post, now overtaken by WhatsApp, Skype, discord and what’s not.

    But the real issue is not about privatisation.It should really be about demonopolisation and therefore more efficient markets. On paper it sounds beautiful. However, practice is unruly.

    The problem is that privatisation or actually demonopolisation in the economic sphere seems beautiful and sounds theoretically solid, but in economic geographic terms it is sometimes not. Railways can hardly really compete with each other because a new track construction is terribly expensive and can not even be planned in some areas.There are therefore high costs of revocation, which hampers competition. The post is a little easier, because post is less geographically bound. The same also plays with bus companies and telephony, even these are less geographically tied than railway companies. A bus can easily get over another road, a train can not easily advance without trace. Water supply companies and other utilities, on the other hand, are far more geographically bound, so privatisation is much less successful as with the railways.

    Moreover, it must be said that the railways in the Netherlands are not even fully privatised. For example, rail maintenance is not done by the railway companies, but by a company called ProRail, of which the state of the Netherlands is a major shareholder. Actually just a state company.At least still, there is a chance that it will soon be a self-governing body (which is an organization that is delegated to carry out government tasks).

    But there is still something important that is overlooked in this question.Why don’t we look at the employee? Or rather small businesses.

    Certainly a company like the post used to be not only a monopolist, but also a monopsonist.A Watte? Yes monopsonist, that also exists. Look a monopolist is the only provider on a market, but you can also be the only questioner on a market. Or rather the only questioner to labor on a labor market.

    The result of a monopsony in a labour market is that wages are declining and unemployment rises.There are very simplified only two effective measures against a monopsonist market power, (1) Trade unions and (2) minimum wage. It sounds crazy but minimum wage can thus lower unemployment. How that works comes from something that is called substitution effects (crazy enough also something a monopolist suffers from). But ask that to be an econometrician if you want to be well explained.

    However, it may also be that there is still a third effective measure against monopsonia, namely collective bargaining agreements, but there is also a need for trade unions in addition to employers ‘ organisations and, in fact, a third party, a kind of Referee, namely the government.

    The government has chosen privatisation to withdraw itself as a referee in this area.That has been unfavorable for both post and rail workers. There are countless new small individual businesses sprung up at the station, for all those small businesses in the post privatisation has often been very unfavorable. They are in fact strangling contracts with bogus self-employed persons with their own van, nowadays a little less on some postal companies, but the phenomenon still exists. The track also plays, but to a lesser extent, because it is not the main task (i.e. postal delivery), but a side task, namely the cleaning of trains. There are unequal negotiations in this type of contract, and that is often unfavourable for the weak party in the negotiations.

    There is even more to play.To some extent, you can also say that privatisation is unfavourable to the user, in the sense of a user who wishes 芒 鈧?虄quality 芒 鈧劉 of the service provided.

    Look employees, what these small postal deliveries and cleaning companies in fact are, also have what is called a utility curve.One utility curve can be the balancing of free time versus paid work. If the fee for work is bad, choose more people for more free time. The result of what you get from this is, for example, mail that is not delivered or is not delivered on time, post whose contents disappear and trains that are not cleaned properly.

    Dutch employees are generally known as conscientious (hard workers), but that reputation has gotten the Dutch employee because it was paid well in the past with good secondary conditions.Now even those secondary conditions are often not as great as it might seem. For example, a good pension is worth little if you cannot get the good privatized care. 😉

    In information Technology, this type of utility curves is often explained with the statement 芒 鈧?艙If you pay peanuts, you get monkeys芒 鈧?;)

    OK This all sounds very left, I think Rutte would have long since been cut off at the first paragraph;) But this guy is not a member of PvdA, Green Left or the SP or such a party, so so left is ie well again not.;) I only try to show you that 芒 鈧?虄Successful芒 鈧劉 is a subjective notion. 😉

    Leave a Reply