The two reasons monopolies (public or private, doesn't really matter) will tend to perform worse than a diverse field of competing concerns is first, ability to focus. The private developer under competition wants to turn a profit as fast as possible, and anything that distracts from that tends to be unpopular. A monopoly, especially a p…
The two reasons monopolies (public or private, doesn't really matter) will tend to perform worse than a diverse field of competing concerns is first, ability to focus. The private developer under competition wants to turn a profit as fast as possible, and anything that distracts from that tends to be unpopular. A monopoly, especially a politically controlled one, will be susceptible to fads ("all the bathtubs must be made from recycled plastic bottles, I read on Twitter that this will solve the climate crisis!") and cronyism ("the tender for recycled-plastic bathtubs didn't get any viable offers, but my golf-buddy has a landscaping business and he says he can supply those bathtubs at £4000 each, perhaps we just give him the contract to supply literally every single bathtub in the country for the next decade?"). And now we have a million brand new flats in city centres but they have massive mold problems because the bathtubs are all leaky. And yes, obviously, bathtubs still have to be made from recycled plastic bottles, and there's still eight years on the contract to supply them, why do you ask? The MPs that came up with these ideas are very influential.
Does this also happen in non-monopolies, private firms on the market under competition? Yes, but tends to be at smaller scale, and does not have the political super-structure, which leads us to: Second, a lack of competition means lack of new ideas. One of the reasons the monopoly can be more efficient (at least in theory, but also in practice, certainly in the beginning) is that is can settle on a constrained set of products and then build those rapidly at scale. Given the housing crisis, a good plan, violently executed now, is better than a perfect plan next week, but part of solving the housing crisis is also to give people more choice in how and where they want to live. A monopoly housing developer runs a very real risk of developing a monotonous housing stock that isn't responsive to changes in technology, trends and needs, and ends up outmoded and unloved.
But as Jamie correctly states, the key blocker isn't the lack of a national housing developer, it's the planning laws. As a side-note, I suspect O'Malleyism would be quite comfortable with a role of the government as an competent, informed and opinionated funder of services, that are then supplied at arms length by private operators ("competent, informed and opinionated" is load-bearing here. TfL busses, not Test and Trace).
Very interesting post. And I think you’re right about O’Malleyism’s ideological vision of public vs private. I haven’t got super strong opinions either way (I think there are some circumstances where a profit motive is bad, others where it is useful), but I do find myself pointing to the London Overground/future GB Railways model quite often, as that seems like an effective way to do get the best of both worlds.
The two reasons monopolies (public or private, doesn't really matter) will tend to perform worse than a diverse field of competing concerns is first, ability to focus. The private developer under competition wants to turn a profit as fast as possible, and anything that distracts from that tends to be unpopular. A monopoly, especially a politically controlled one, will be susceptible to fads ("all the bathtubs must be made from recycled plastic bottles, I read on Twitter that this will solve the climate crisis!") and cronyism ("the tender for recycled-plastic bathtubs didn't get any viable offers, but my golf-buddy has a landscaping business and he says he can supply those bathtubs at £4000 each, perhaps we just give him the contract to supply literally every single bathtub in the country for the next decade?"). And now we have a million brand new flats in city centres but they have massive mold problems because the bathtubs are all leaky. And yes, obviously, bathtubs still have to be made from recycled plastic bottles, and there's still eight years on the contract to supply them, why do you ask? The MPs that came up with these ideas are very influential.
Does this also happen in non-monopolies, private firms on the market under competition? Yes, but tends to be at smaller scale, and does not have the political super-structure, which leads us to: Second, a lack of competition means lack of new ideas. One of the reasons the monopoly can be more efficient (at least in theory, but also in practice, certainly in the beginning) is that is can settle on a constrained set of products and then build those rapidly at scale. Given the housing crisis, a good plan, violently executed now, is better than a perfect plan next week, but part of solving the housing crisis is also to give people more choice in how and where they want to live. A monopoly housing developer runs a very real risk of developing a monotonous housing stock that isn't responsive to changes in technology, trends and needs, and ends up outmoded and unloved.
But as Jamie correctly states, the key blocker isn't the lack of a national housing developer, it's the planning laws. As a side-note, I suspect O'Malleyism would be quite comfortable with a role of the government as an competent, informed and opinionated funder of services, that are then supplied at arms length by private operators ("competent, informed and opinionated" is load-bearing here. TfL busses, not Test and Trace).
Very interesting post. And I think you’re right about O’Malleyism’s ideological vision of public vs private. I haven’t got super strong opinions either way (I think there are some circumstances where a profit motive is bad, others where it is useful), but I do find myself pointing to the London Overground/future GB Railways model quite often, as that seems like an effective way to do get the best of both worlds.