Friday, June 08, 2007

Privatisation/Nationalisation Axioms

* - Continuous Spectrum. For any "Stuff" there is a continuum of policy of ownership from Government-owned monopoly all the way to unregulated competitive private ownership. Some markers being Highly regulated private monopoly, Government owned but some private subcontracting, majority owned near-monopoly competing with private enterprises, Government services competing in a fairly level field with private. Conveniently economists can come to a consensensus on where on the spectrum a policy puts itself.

* - Independent nation-states able to individually pursue and experiment with policies without being able to impose such policy on other countries or be imposed on from the UN or other supranational entity.

* - The judgement on policy is essentially which country does well in a typical competitive environment in the ideal where the policy concerned is the only point of difference.

* - There is little or no interdependence between different "stuff" being privatised. ie. if A is privatised, and B is privatised, the net effect will be approximately the sum of the effects of each.

* - Price controls on "Stuff" which is nominally privatised has the effect of removing a large chunk of control from private interests and should be considered in the nationalisation end of the spectrum.

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