Question

Demerits of increasing privatization in higher education

Answer 1

The abuse of the 'public interest'

Those who have opposed privatisation argue that the public utilities were nationalised in the first place in the public interest. The utilities are products and services that are essential to all members of the general public. A private company in charge of one of these industries, interested only in profit, is likely to close down or marginalize unprofitable elements of its operations (e.g. cutting expensive remote services like phone boxes in the Shetlands). As nationalised companies, unprofitable but essential services continue through cross-subsidisation; unprofitable services being subsidised by the profitable services. Why else do you think that a first class stamp costs 27p whether you send a letter to a friend living miles away or to a friend living locally? As it happens, phone boxes were not closed, but this was only due to the existence of regulators. There have, though, been some worrying developments in the railways, with poorer services and timekeeping following privatisation.