JIM COOMBS. Public Goods

May 23, 2017

Before the advent of the “free enterprise market economy” model’s dominance of economic thinking, there was a distinction made between private and public goods.  The idea was that some things had to be provided for a healthy, well-ordered society: such basics to our notion of civilization as universal water reticulation and sewerage (the most significant public health measure ever), electricity and gas services, public transport, education and telecommunications. These were to be provided generally and largely (as possible) equally to all, and NOT at the direction of “market forces”, which would discriminate in favour of the rich.  For most of the last century these were provided by government monopolies, to guarantee fair and equal access. Seems quite sensible. 


In light of that, the recent agonising over the supply of power, be it electricity or gas because of “market forces” seems quite ludicrous.  The same could be said of the disquiet (quite justified) at the possible entry of another supplier, complete with separate infrastructure : pointless duplication unless securing profits ahead of efficiency is the principal motivation. Blind Freddy can see that selling our gas through private corporations to the overseas markets at prices so much lower than our own citizens and businesses are charged, is a consequence of allowing public goods to be privatised.  The only benefit, if any, is to enhance the profits of private corporations at the expense of the community at large.

The telecommunications industry (unregulated ?) is about to treble the infrastructure needed for a service which could serve us all, simply to allow anticompetitive market forces to protect two oligopolistic corporations whose cost structures are not transparent.

If we look at transport, the privatisation of British rail is a salutary lesson.  Fares are higher and booking between franchises is largely a nightmare for the customer and an opportunity for price gouging. Closer to home we have Westconnex, which will force more people to use air-polluting motor vehicles when most of Sydney west of Parramatta and to the south cries out for decent public transport, while private bus operators provide inadequate service and seek government guaranteed profits. It is a sad fact that our gaols have hundreds of inmates whose only crime was to drive disqualified, because they had little alternative.

The other public good, which should be the right of all citizens, is education. At the instance of the benighted John Dawkins (and Keating and Hawke) it has been turned into a commodity and largely privatised, with a host of shady “colleges for profit” coming out of the woodwork to exploit all comers who have the cash to pay. It is a sad reflection on our national character that our economy is fast becoming one that provides services to the rich (deserving or no) of other countries, rather than developing a self-sufficient sustainable national economy, as the Chifley government attempted to do with the Department of Post War Reconstruction.

Not surprisingly my name is: Jim Coombs, Retired Magistrate and Economist

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