Matt Wrote:Most infrastructure like water, electricity, sewerage, gas and even telecommunications are considered a natural monopoly. At the end of the day there isn't much that the product can be changed to make it a better experience (except telecommunications), except for maybe reliability, but even then you have a regulator that sets targets it has to keep.

The capitalist way rarely works in these natural monopolies, as no sane company will roll out duplicate infrastructure to compete. It also comes down to how efficient it is to duplicate this infrastructure to the end user. Have a quick think about it. If there's two companies trying to compete, it now means that all the cost of that infrastructure is now shared over a lower percentage of people, thus making the costs higher on average. There's only so much you can sacrifice in infrastructure to keep cost's low without taking shortcuts or sacrificing reliability.

Not to mention being a business, shareholders demand a profit. The whole Government's not running efficient companies can be debated until you go purple in the face.

I honestly can't think of any natural monopoly that has been privatized that has worked well, or even kept prices down and let's face it they will never lower the prices, they have no reason to. In most cases they just run down the infrastructure, performing little or no maintenance of it.

Maybe if it was a not for profit organisation?

Ah yeah you are right, I completely forgot about natural monopolies, I just wanted to explain that privatization is not such a terribly frightening thing as the OP interpreted it. Privatization is very necessary for instance for a macroeconomy to grow as it increases the money supply and the short run and long run aggregate supply up, increasing real GDP and inflation (well that depends which state the AD curve is located in on the short run aggregate supply curve) along with deregulation and that sorta thing. I would say that interventionist policies are more effective at increasing the money supply though, even if it only shifts the SRAS.