Right. I’ll think about it. What we want to avoid is the ghastly consultants view of things. The consultants have only bigshot corporations as one wing of their client base. The other wing being blood-sucker-central. Hence our consultants have developed a concept of privatisation manifestly unfair and against the interests of the public. Although in many cases they could argue a slight utilitarian points decision over the former socialist run industry. They will call you a socialist if you question the particular FORM the privatisation takes.
One day I heard an extreme version of the consultants consensus on privatisation. This was with regards to Iraq in the early days of the war. One of the consultants was talking about what he reckoned was “best practice” with regards to privatising the oil. He reckoned you bundle it all together and have this almighty auction. Like a trillion dollar auction.
Note what this achieves. It leaves the government awash with cash which they will promptly waste. And since the auction bundles together so many resources it is only open to the deepest of pockets and therefore:
1. The price will be too low.
2. The winning bidder will now be up to his eyeballs in debt.
3. The government will fritter the money away in an almighty splurge of vote-buying, cronyism, corruption and in all likelihood violence.
4. Since the winning bidder will be in massive amounts of debt value will tend to gravitate to the deepest pockets around which is at the moment the Chinese communists.
This is what our neoclassical economists have arrived at as a result of all their thinking being skewed by their paymasters.
Note it was this sort of advice that really screwed around Russia after the fall of communism. Most of her large-scale industry wound up being auctioned off to a few Jewish blokes who were former black-marketeers. The pull of stolen money finance is a strong one. And so despite the manifest failure of this sort of resource allocation our consultants have not changed their minds one inch.
They always do things in such a way as to:
1. Get a massive lump sum for the politicians of the day to vote-buy, waste, and to defer the reality that the only right thing for these politicians to do is to close down a host of government departments.
2. Cut out small and middle sized businesses from the opportunities and just line the pockets of bigshots.
3. Leave a tangled mess of a market afterwards. A frankenstein market full of poorly stiched-together zombie-like companies. This is a market where ongoing consulting work can be virtually guaranteed.
See in this regard the absolute hash of how they handled the telstra privatisation. Now telstra has to be eternally arm-twisted into letting her competitors sub-let her network under reasonable arrangements. Only consultants could create such a tangled mess as to guide things to the impasse where your supplier is also your competitor.
And you know they hire their mates and build these Frankenstein companies. And then they wonder why the companies so built are not dynamic. After all they set up more than 3 competitors right? Several indeed. Enough numbers so we don’t have to call it names like “oligopoly”. Surely thats in accordance with the Frank Knight models right?
So not seeing that competitiveness must be in the DNA of the company……. Not seeing that big business ought to come out of small business success they then say GO FRANKY. Go franky. Get out there franky and compete.
And all franky does is sit there bleeding into his bandages and occasionally lifting up some pot or other and showering gold over himself.
This sort of problem is all over the world so much is the group-think of the consultants.
Its become so bad that Amy Chua, probably without knowing it, wrote a book that to my mind is really about the consequences of this sort of hobgoblin-skewed privatisation. This sort of privatisation just leads to a few elites taking over rigged markets, and sometimes they do so getting up to their eyeballs in so much debt that value is basically transferred to overseas interests.
Now I believe in privatisation. I think we ought to privatise a lot more. But we have to go for a sort of privatisation that is just a little bit more righteous. A little bit smarter. And one that leads to a functioning market…. A functioning market being one which creates noticeably better value-for-money each year thereafter.
And I believe in big business. But its gotsta-come from small business success and no exceptions.
So sea-steading and the like has to be done with this better thinking in mind. No vast auctions of large sea territory. Upfront trying to minimise usage of the sea bed and particularly the sea surface. Intensive improvement of a small area is what ought to give one ownership rights to be recorded, legally recognised, bought, sold, and borrowed against.
And we don’t have to have every last centimetre in private hands. Let the speedboats be free. Let the feral fish swim by in peace.
But we DO NEED to get started with this. Because one thing builds on another and you would want a lot of small business out at sea to more cheaply develop the vast resources that the oceans contain.