The fundamental problem all these examples are linked to is the rise of centralized power in the economy, and the antidote has been known for a long time, see this 1952 book by John Galbraith:
> "...private decisions could and presumably would lead to the unhampered exploitation of the public, or of workers, farmers and others who are intrinsically weak as individuals. Such decisions would be a proper object of state interference or would soon so become."
Economists like Michael Hudson (I'm a fan) repeatedly refer to the rentier class in this context, and a rentier system (wiki) can be described as one in which
> "productive investments are largely lacking, the highest possible share of income is skimmed off from ground-rents, leases and rents and thus in many developing countries, rentier capitalism is an obstacle to economic development. A rentier is someone who earns income from capital without working. (wiki)"
Note that if you take capital and use it in a different way, e.g. to build a factory in which you are actively involved in design and production, you are not a rentier, but rather an industrial capitalist (I think we can safely put Elon Musk in this category, and Warren Buffett in the rentier group, for example). For more on this notion:
There are several policies which undermine the power of the rentier class - antitrust in competetive industries is one, but equally important is the nationalization and state control of fundamental sectors that are non-competitive and thus fall under the natural monopoly heading - water, roads, ports, electrical grids, fiber optic networks, basic public health care and education, emergency services, etc. - basically the infrastructure that makes all other economic activity possible, and which the likes of Buffett - a noted utility investor - have had their fat fingers in for many decades.
China has incorporated these concepts into its state capitalism model and that's why it is outperforming the USA and Europe when it comes to technological and economic development in almost all sectors, from solar panels to high speed rail to water projects, and now, chips. They're still behind in space tech, but that's really only due to the phenomenon of SpaceX.
The utility sector has a 10% profit margin. Hardly an example of a monopoly abusing its position. If utilities were nationalized the maximum possible gain is 10% and the potential loss is the unlimited capacity of the government to waste resources.
Maximum 10% gain is not true for example because a contracted utility has little pressure to improve services, create new services, invent new energy processes, open or serve new markets. They can go with the generic political will and collect their garanteed 10%. Private enterprise wins or loses potentially big specifically by not doing that.
Maximum 10% gain is also not true for example because there is little pressure to "do it right" from an economic outcome point of view (when to plan expansions, how to schedule maintenance). Skipping the extremely politically incorrect example.
Maximum 10% gain is also not true for example because the current sector rarely has the opportunity to expand dramatically to support a dramatic new industry. (In that case, the gain would come from the new industry - AND the expanding utility sector) Even the Pacific North West did it the other way around: available surplus energy caused new industry to settle there.
Not true the maximum losses a private utility can generate for the public are unlimited because the losses always get nationalized. The 10% margin is after C suite grift so it’s likely more than 10% you can save. Plus if you are on the hook for losses might as well take the 10%
It will be paid out of tax money either way. To save me money the government would have to either:
1. run the operation at least 90% as cost effectively
2. be less likely to make major costly mistakes
From my experience with government the probability of 1 is 0% and the probability of 2 is minimal. At least when PG&E caused those wildfires, their execs were fired and had to pay $100 million of their own personal money in damages. This doesn't happen when government employees screw up. They don't even lose their jobs.
The fact that they had 100 mil to pay speaks of the excesses salaries were paying them.
PGE isn’t really run any more efficiently than a government institution, at least with government there is some measure of transparency, though accountability is lacking for both situations.
Capitalism doesn’t drive efficiency when there is no competition, in fact the incentive for PGE is to drive up actual costs and then raise prices to maintain 10%. The more expensive and inefficient they are the larger the 10% bucket is.
That 100 mil is 0.4% of annual revenue, and that isn't one year's pay, it's a lifetime of accumulation. There were 20 people in the settlement averaging close to 6 mil each (it was actually 117 mil total). That's really not that high of a net worth for people running an enormous power company. Pay peanuts, get monkeys.
As for transparency, audited financial statements of public companies are infinitely more information than you will ever get about the finances of a government bureaucracy. And their only incentive is to use up their budget so they can ask for an increase next year.
https://en.wikipedia.org/wiki/American_Capitalism
> "...private decisions could and presumably would lead to the unhampered exploitation of the public, or of workers, farmers and others who are intrinsically weak as individuals. Such decisions would be a proper object of state interference or would soon so become."
Economists like Michael Hudson (I'm a fan) repeatedly refer to the rentier class in this context, and a rentier system (wiki) can be described as one in which
> "productive investments are largely lacking, the highest possible share of income is skimmed off from ground-rents, leases and rents and thus in many developing countries, rentier capitalism is an obstacle to economic development. A rentier is someone who earns income from capital without working. (wiki)"
Note that if you take capital and use it in a different way, e.g. to build a factory in which you are actively involved in design and production, you are not a rentier, but rather an industrial capitalist (I think we can safely put Elon Musk in this category, and Warren Buffett in the rentier group, for example). For more on this notion:
https://thebaffler.com/salvos/dilemmas-of-the-rentier-class
There are several policies which undermine the power of the rentier class - antitrust in competetive industries is one, but equally important is the nationalization and state control of fundamental sectors that are non-competitive and thus fall under the natural monopoly heading - water, roads, ports, electrical grids, fiber optic networks, basic public health care and education, emergency services, etc. - basically the infrastructure that makes all other economic activity possible, and which the likes of Buffett - a noted utility investor - have had their fat fingers in for many decades.
China has incorporated these concepts into its state capitalism model and that's why it is outperforming the USA and Europe when it comes to technological and economic development in almost all sectors, from solar panels to high speed rail to water projects, and now, chips. They're still behind in space tech, but that's really only due to the phenomenon of SpaceX.