How much to nationalise ?

[Charlottesquare]

Sorry, I'll allow you to claim that there may be good reasons for just about anything that a government may decide to do. What you can't get away with is claiming that this is a "natural" state of affairs, like the weather.

Do you think we should have multiple water supply companies all laying their own pipes to each house? Multiple electricity supply companies with their own powerlines? It makes no financial sense.

Should Ford and Volkswagen have to build different roads for their cars to drive on?

With no government interference, a pure free market would eventually lead to companies collaborating and agreeing to share infrastructure, much as they do now, as it would simply cost them more not to do so.

I hope that does happen with cars, one then needs to just buy the least popular car make to have congestion free motoring. (Come back Reliant, all is forgiven)

[Alaric]

The "not a monopoly" argument would suggest a customer there could choose.

I was reflecting which household services were natural monopolies and which weren't.

So gas and water pipes, electrical, telecom and TV cables are monopolies. Some layers of the postal service as well.

Really though perhaps you would prefer to have a supply contract for the infrastructure separate from whoever supplies the content. That's particularly the case for telecom services where despite the provider you are generally speaking dealing with OpenReach who won't almost on principle talk to consumers about faults. Water is still regionalised and for gas and electricity, local supply is still handled by what's left of the nationalised loacl monopolies.

[servodude]

Sorry, I'll allow you to claim that there may be good reasons for just about anything that a government may decide to do. What you can't get away with is claiming that this is a "natural" state of affairs, like the weather.

Do you think we should have multiple water supply companies all laying their own pipes to each house? Multiple electricity supply companies with their own powerlines? It makes no financial sense.

Should Ford and Volkswagen have to build different roads for their cars to drive on?

With no government interference, a pure free market would eventually lead to companies collaborating and agreeing to share infrastructure, much as they do now, as it would simply cost them more not to do so.

I hope that does happen with cars, one then needs to just buy the least popular car make to have congestion free motoring. (Come back Reliant, all is forgiven)

That would be called a bicycle

[servodude]

The "not a monopoly" argument would suggest a customer there could choose.

I was reflecting which household services were natural monopolies and which weren't.

So gas and water pipes, electrical, telecom and TV cables are monopolies. Some layers of the postal service as well.

Really though perhaps you would prefer to have a supply contract for the infrastructure separate from whoever supplies the content. That's particularly the case for telecom services where despite the provider you are generally speaking dealing with OpenReach who won't almost on principle talk to consumers about faults. Water is still regionalised and for gas and electricity, local supply is still handled by what's left of the nationalised loacl monopolies.

The infrastructure/content split only makes sense if the content can be multiplexed - that's vanishingly rare

So while I'm paying extra for my electricity to be "100% offset" it's the same stuff as the "coal fired" guy next door
- it's not like I'm buying my coal from a different merchant - but the system kind of pretends it is
It's a fantasy and there's so much wasted effort in perpetuating it at the expense of doing it efficiently that it's a little bit exasperating

[XFool]

All the above is, of course, an entirely spurious argument. Completely beside the point.

I did wonder when posting if somebody would pop up to point out that "There are different sorts of electricity. eg. the US uses 110 Vac, 60Hz. Then there is DC..." etc. But I thought: "SURELY I don't have to...?"

Apparently - not for the first time - I was wrong.

I take it that you don't know that Japan uses BOTH 50Hz and 60Hz?

How is this relevant to the monopoly/nationalisation debate?

[Urbandreamer]

All the above is, of course, an entirely spurious argument. Completely beside the point.

I did wonder when posting if somebody would pop up to point out that "There are different sorts of electricity. eg. the US uses 110 Vac, 60Hz. Then there is DC..." etc. But I thought: "SURELY I don't have to...?"

Apparently - not for the first time - I was wrong.

I take it that you don't know that Japan uses BOTH 50Hz and 60Hz?

How is this relevant to the monopoly/nationalisation debate?

It was a reply to your comment. I suspect that you thought that different forms were not used in the same country. Now you know different.

The main thrust of my posts has been to question nationalizing "natural" monopolies. I'm arguing that the monopoly is often not in fact a "natural" monopoly.

Much of the current debate is revolving about and fed by the energy situation caused by the war in Ukraine. I would argue that Russia doesn't have a "natural" monopoly of gas or oil in Europe. What they have is a preponderance of these resources, and "we" have allowed ourselves to become dependent upon them supplying them.

Others have pointed out that there is an advantage to considering the infrastructure a "public good" and hence could be nationalized (if it exists within a single state). I wouldn't disagree. But the source of what uses that infrastructure, be it cars, gas, electricity, water, sewerage, waste disposal, recycling.... Well I'm arguing that the argument "natural monopoly" just doesn't wash in almost all cases.

It's arguably possible to nationalize the part of National Grid that covers the UK. We can't "nationalize" the DC electricity links to other countries that both countries using the link rely upon. Nor can or should we nationalize private companies operations in other parts of the world.

BTW, this is an entirely different argument from if nationalized companies should be allowed overseas operations. It's an argument about changing the ownership structure of already operating companies.

[servodude]

The main thrust of my posts has been to question nationalizing "natural" monopolies. I'm arguing that the monopoly is often not in fact a "natural" monopoly

Have you got a definition to "natural monopoly" that you're working with?
Does it differ much from the one in this link:
https://www.investopedia.com/terms/n/natural_monopoly.asp

A natural monopoly is a type of monopoly that exists typically due to the high start-up costs or powerful economies of scale of conducting a business in a specific industry which can result in significant barriers to entry for potential competitors

[XFool]

All the above is, of course, an entirely spurious argument. Completely beside the point.

I did wonder when posting if somebody would pop up to point out that "There are different sorts of electricity. eg. the US uses 110 Vac, 60Hz. Then there is DC..." etc. But I thought: "SURELY I don't have to...?"

Apparently - not for the first time - I was wrong.

I take it that you don't know that Japan uses BOTH 50Hz and 60Hz?

How is this relevant to the monopoly/nationalisation debate?

It was a reply to your comment. I suspect that you thought that different forms were not used in the same country. Now you know different.

I didn't think anything of the sort. I thought it was irrelevant. It still is.

"Dear customer, do you want us to supply you with AC or DC? With 230v or 110v? 50Hz or 60Hz? " - The 'advantages' of competition?

[Urbandreamer]

The main thrust of my posts has been to question nationalizing "natural" monopolies. I'm arguing that the monopoly is often not in fact a "natural" monopoly

Have you got a definition to "natural monopoly" that you're working with?
Does it differ much from the one in this link:
https://www.investopedia.com/terms/n/natural_monopoly.asp

A natural monopoly is a type of monopoly that exists typically due to the high start-up costs or powerful economies of scale of conducting a business in a specific industry which can result in significant barriers to entry for potential competitors

Well it wasn't that one. To be fair I hadn't attempted to look a definition up.

I confess that I was thinking more in terms of a resource that denied competition. Like the road outside your house or some of the examples given further down that definition.

Natural monopolies can arise in industries that require unique raw materials, technology, or similar factors to operate.

I would also question the extent that we should trust the article. While I would agree with most of what is written, there are historical examples that would dispute their choice of Railways as an example of a "natural monopoly".
https://railway-history.walkingclub.org ... efits.html
Further, I would certainly feel that the term "monopoly" shouldn't be used if a choice exists and is used, as in their example of social media or search engines. I use TLF and not TicTock. Are either a "natural monopoly", given that we may prefer or choose one over the other?
Were Instagram and facebook a "natural monopoly" or even a monopoly, before Instageram was bought? Can we use the tern "natural" BECAUSE one bought the other?

[servodude]

The main thrust of my posts has been to question nationalizing "natural" monopolies. I'm arguing that the monopoly is often not in fact a "natural" monopoly

Have you got a definition to "natural monopoly" that you're working with?
Does it differ much from the one in this link:
https://www.investopedia.com/terms/n/natural_monopoly.asp

A natural monopoly is a type of monopoly that exists typically due to the high start-up costs or powerful economies of scale of conducting a business in a specific industry which can result in significant barriers to entry for potential competitors

Well it wasn't that one. To be fair I hadn't attempted to look a definition up.

I confess that I was thinking more in terms of a resource that denied competition. Like the road outside your house or some of the examples given further down that definition.

Natural monopolies can arise in industries that require unique raw materials, technology, or similar factors to operate.

I would also question the extent that we should trust the article. While I would agree with most of what is written, there are historical examples that would dispute their choice of Railways as an example of a "natural monopoly".
https://railway-history.walkingclub.org ... efits.html
Further, I would certainly feel that the term "monopoly" shouldn't be used if a choice exists and is used, as in their example of social media or search engines. I use TLF and not TicTock. Are either a "natural monopoly", given that we may prefer or choose one over the other?
Were Instagram and facebook a "natural monopoly" or even a monopoly, before Instageram was bought? Can we use the tern "natural" BECAUSE one bought the other?

Yeah i do think the term has been a bit tenuously stretched at times

But the idea of a market that has sufficiently high impediments (cost, time, resources) to entry so as to effectively remove competion seems like a pretty useful concept and deserving of a label, as that aspect of them does mean that one expects them to behave differently

Or conversely if electricty wasn't such a "natural monopoly" then supply would just have met demand (either through more being available or demand being cut) and we wouldn't be looking at the present problem

-sd

[Urbandreamer]

Yeah i do think the term has been a bit tenuously stretched at times

But the idea of a market that has sufficiently high impediments (cost, time, resources) to entry so as to effectively remove competion seems like a pretty useful concept and deserving of a label, as that aspect of them does mean that one expects them to behave differently

Or conversely if electricty wasn't such a "natural monopoly" then supply would just have met demand (either through more being available or demand being cut) and we wouldn't be looking at the present problem

-sd

Well, your example of a reason raises just such a question about "natural monopoly".
In various countries, over huge amounts of time, we have had famine and food riots. From people in Island and India starving to the revolution in France. Doesn't that show that food is a "natural monopoly"?

Of course very often the impediments that remove competition are not, in themselves, "natural". While this is certainly true in the examples that I gave as there were legal impediments to importing food from elsewhere, how "natural" are modern impediments to electricity. For example a license is required to generate electricity.
https://epr.ofgem.gov.uk//Content/Docum ... ersion.pdf
The way that I read it, you need such a license should an Island community decide that having none, they wish to generate enough electricity for the inhabitants.
Understand, that I accept that there are technical difficulties that require regulation if connecting to the grid (that old 50/60Hz stuff), but the license is still required were you simply to generate to supply an Aluminium smelter or server farm.

The term "natural monopoly" is so flexible that I really question that it can be used to justify anything.

Ps, re sufficient electricity being available through demand cuts, I understand that there are companies very willing to buy cheaper electricity on the understanding that they may release that electricity when supply couldn't t meet demand were they to use it. Strangely there is political pressure that such companies not be allowed to function, as they consume electricity. I am of course talking about those terrible bitcoin/crypto miners.
https://www.bloomberg.com/news/articles ... texas-heat

[TUK020]

"British gas" was not a monopoly or even existed at the time that the government decided to privatise it. The sequence of events is that local "town" gas works existed, which were taken into the control of local authorities. These local works were nationalized in 1948 into regional gas boards. This state continued to exist on after the introduction of North Sea gas. In order to privatize the gas industry, the then government had to combine these boards into a country wide monopoly in order to privatise it as British gas.

But the reality is that for gas, as for water and electric, they are natural monopolies, whether local, regional or national.

There is only one gas pipe running to my house, only one water, only one electric line.

That infrastructure level is naturally a monopoly, there is no consumer choice, as distinguished from the companies supplying gas/water/electricity through that infrastructure.

If you take the Electricity industry as an example, it is split between the following players:
Electricity Suppliers - buy electricity from the generators, and sell it to customers, pay the middlemen to transport it. Competitive market, so of these have gone bust recently.
Electricity Generators - sell to the Suppliers, competitive market
National Grid - Connect generators to distribution operators in England and Wales. Scotland grid run separately by SSE. Also manage interconnectors to France etc. Natural monopoly, highly regulated
System Operation - Matching supply and demand, was part of NG, but being separated out under public control.
Distribution Network Operators - 14 regional companies who run the substations and wires down the street. Charge the suppliers for transporting the electricity. Natural monopolies, highly regulated.

Picture is further complicated by the fact that companies opeate in more than one part of the market. E.g. SSE run the grid in Scotland, are a significant generator (big investment in renewables) are a DNO in some regions (4?), but have now exited the Electricity supply business.

Viewing these industries in entirety as "natural monopolies" can be overly simplistic, and a little misleading