Much cheaper not to train anyone and let the state or pupil pay for training.
See lack of apprenticeships for a case of this.
If private enterprise was really this efficient, and government was really that inefficient, we should have seen ample evidence for that by now. The fact that we haven’t is proof that the promises of neo-liberalism are all lies.
There's a wealth of clear evidence for this in the economic data in Eastern vs Western Europe, East Germany vs West Germany when Eastern Europe was under Soviet rule. The countries under Soviet rule were significantly poorer and to this day most still haven't caught up with their Western European counterparts.
Western Europe didn’t start neo-liberal policies until after the cold war ended, and it went into full gear around the year 2000.
In either case. Is garbage disposal in Europe so much more efficient now that it has all been privatized, compared to the mid-90s? Are trains running cheaper? Is power transmission cheaper now that energy generation, and delivery have been split apart and sold to private investors on the public stock market?
No, the answer to all these questions are no. Because efficiencies in a system don‘t care about the ownership model, and neo-liberalism is a religious like creed that operates out of idealism for a world that does not exist.
You are picking the textbook example of a natural monopoly as a way to argue against how free markets don't work?
Is it?
> Are trains running cheaper?
They're up about 6% in real terms (or about 0.23% a year) since 2000 [1]. That said, I don't think most European rail is privatized, so this is a strange example.
[1] https://ec.europa.eu/eurostat/databrowser/product/page/PRC_H... deflated with CP00
Yes and no. Garbage disposal is more efficient now then it was in the mid-90s, but that has everything to do with the infrastructure and nothing to do with the ownership model. More on that later.
The ownership of infrastructure and the operation are split where private operators are allowed to compete with national operators on the same infrastructure. This is true for trains and electricity, and in some cases garbage disposal. Many of the national operators are publicly traded with the national government being the majority shareholder.
Some countries in Europe have gone much further in privatizing the rail network then others. The UK being the canonical example of privatization, and Norway being an example of a country privatizing more slowly.
If the promises of neo-liberalism were true, we should see the efficiencies gained in the UK compared to Norway. Yet, no such evidence exists. And that is because efficiencies correlate with the quality and the quantity of infrastructure, not the ideological policies that dictate the ownership of the operators.
I mostly agree. Infrastructure quality (including institutional quality) dominates. Ideology is usually cover for a lack of evidence.
But ownership modes do create different incentive structures. Full private ownership is famously terrible in natural monopolies. It’s a well-known market failure and folks who proselytize fully privatized utilities are stupid or venal. For many other things, however, private ownership works. A good example is package delivery. (Train operation is a weird case. The UK fumbled. Italy did not. On the other end of the spectrum, DB is a trash fire.)
My point is that these promises are lies. Neo-liberalism is a failed policy (yet it is the dominant policy among every single government in power today). And when GP claimed education was expensive because it is done by the government, I was here to call it out as another lie of neo-liberalism.
Not what I said. Read again.
For goods and services where demand is inelastic and the barrier for entry is high, the invisible hand will end up colluding to extract the most value possible (housing, utilities, groceries, healthcare). If the state does this, the ruling party starts catching strays and is eventually replaced. Of course, for the distinction to matter, you need to be able to meaningfully create new parties.
Your point stands for elastic demand, where you can choose to vote with your wallet (restaurants, vacations, gyms). Capitalism did a good job of adding to this list during its growth stage (transportation, entertainment, communications) but nowadays it's mostly established cartels that dominate all of the above in what appears to be a race to the bottom.
The incentives for package delivery are closer to the first category than the second though, since consumers end up with whatever company the supplier signed up with, thus mostly eliminating choice and reducing quality to the bare minimum required by the contract (not unlike the postal services).
Even when the customer gets to choose, the end results are still worse than vertical integration. Consider the food delivery apps that replaced most restaurants' in-house delivery teams: they have a direct interest to collude to keep prices high since they all earn the same no matter what restaurant you buy from, whereas for the individual restaurant it makes sense to throw in free delivery to get you buying from them.
I guess the biggest downside to private ownership is that it creates an incentive to have collusion service providers masquerading as adding value (realtors, brokers, speculators, resellers, risk managers, etc.) while providing plausible deniability to the state (which is of course responsible for its failure to regulate the incentive structure for these value-added services on a case-by-case basis).
Food. Consumer goods. Telecommunications services. Transportation. Clothes. All things that have gone down in absolute prices and relative amount of family income to be provided.
Education / Housing / Healthcare: all deemed "up to the State" and that takes increasingly more from people at ever diminishing returns.
We can have a long and serious conversation about how hard the Government should be involved in regulating these things, and how we could set up systems that ensure that these become universally available and not just for middle/upper class. We can even have a conversation about things that should be controlled by the Government even if it means a high cost to society. But to deny that things managed by the State are more expensive overall is a clear sign of ideological blindness.
As the saying in Europe goes: Neo-liberalism will continue until the economy improves.
Do we have 20 years already since people are allowed to set up a solar panel in their backyard and sell excess capacity to the grid?
Do we have 20 years where farmers can grow their own biodiesel to (at least) power their own machinery, or does the state giving them subsidies to let them keep growing vegetables, wine and beef without having to compete in the global market?
Energy package 3 was supposed to fix this with some additional regulation and standardization. It did not. Energy package 4 is supposed to fix this with more standardization and regulations (including distributed generation; which I am in favor of btw.) however, it will not.
The problem is the privatizations of the 2000s, not in the regulations surrounding small scale solar. The problem is neo-liberalism. Get rid of corporations rent-seeking on our infrastructure. Our energy bills will not become lower until then.
Under state-owned infrastructure, you simply can never know the real cost of any of the services, because state-owned companies depend a lot more on subsidies that come from tax revenue than actual revenue from the service itself.
> Get rid of corporations rent-seeking on our infrastructure.
Get rid of corporations altogether. I firmly believe that any company (state owned or not) with more than 150 employees should be broken down.
However, if you look at the popular movements on the streets of Europe at the moment, you can see that the people are in fact not happy about this. There are very few political means of getting rid of neo-liberalism (see e.g. Spain for a clear example of what I mean) so people are turning to the streets as the only viable alternative.
It confers enhanced future income largely because of the inherent vetting process that asures future employers this person is able to focus for extended periods of time on intellectual tasks, is able to follow through and function within a bureaucracy. I don't think it's as much about skills, at least it's way overkill for the skills that are actually needed on the job for most jobs.
I don't see the rise of LLMs as obviating the "functional cog in the Rube Goldberg machine" training.
Kinda like how tax breaks on housing initially help people, and then the market adjusts based on the new inflow of $.
The death of apprenticeships is because you are training your own competition. It worked in the past because you trained your kid for a trade that was arcane and took a couple decades to master, but now you'd be training someone with no loyalty to you in a field that can be speed run in a year or so with YouTube assistance.
It does not matter if Education/Training is done by the government or another company all that matters is that the company does not have any training in its accounts. If it has that is an obvious cost to cut.
Long term this is not good for a company but for the next year or two at least it is better and that is all that their shareholders will look at,
Only if someone else is footing the bill.
> If it has that is an obvious cost to cut.
When it costs tens of thousands per year, yes. If training became 10-100 times cheaper, "training" becomes as expensive per employee as the cost of offering cafeteria food or "gym memberships". Training would be on par of offering any other type of employment benefit, and you don't see shareholders asking for big companies to get rid of any of those.
Most UK large companies had cafeterias in the 1980s now they don't and you have to go out to get lunch.
Training always costs thousands a year.
If you train a person you have to pay their salary and overheads. whilst they are being trained and are not fully productive. Plus you need to pain for the people and machinery needed to provide the training. Much cheaper to do non of these.
And FAANG companies famously provide everything in campus (food, laundry, gym clubs) as perks. What's your point?
> Much cheaper to do non of these
That's a textbook example of the Doorman fallacy.
To the extent it is I agree it should obviously be replaced by on the job training, because that will be much much better. But to me this is what's happening now anyway, de facto.
Even you do, say, a computer science degree which is one of the more obviously industry aligned fields you're still not really learning how to build software products or even useful software at all really except in the most mechanical sense.
You're learning a bunch of variously useful theory (in the sense that it could all be useful in principle but you won't know exactly for what and at what time until you're out building things in the world) and no company is ever going to be incentivised to introduce you this in a proper environment conducive to intellectual exploration separate from 'the job', because frankly you'll be long long gone by the time any of it pays off often decades hence.
They aren't the ones saying it. Parents, government officials and high school guidance counselors are telling everyone they need college to get a good job.
Colleges don't have to say anything thing about it but they raise their tuition abd accept the grant money while expanding their campuses to accommodate the rise in demand. That's exactly how a business would react to a growing market with rising demand and an influx of government money.
People pass through colleges on their way to getting a job and colleges oblige.
What op thinks colleges should be doing is accepting people who they think, with education, could contribute to the college's research fields. Think about the college tracks that lead to PhDs where the student stays with the university for some or all of their career. That's what OP is suggesting colleges become (or revert to, if that's what they ever were).
Even the ones that are ostensibly under software engineering courses where you might even work in a group, it's about as far away from working on a real software project in a company with (or without) customers and capital on the line etc as can be imagined. Probably even open source would be a closer approximation / better practice at this.
And all of this is a good thing and is the point. It's a sandbox, for you to play around, mess up, 'waste time' and learn. No company is going to really give you this sandbox in the same way, nor should they. They're paying you, you're not paying them.
Zoho is a classics example of picking students at age 16/17, when they'd typically join a UG course, and instead train them on the job.
Some of the large tech service companies change incentives by tying a training fee ("bond") which is tied to some tenure (1-2 years). Departing before this would mean giving this back - which broadly incentives the planned tenure.
Other companies (musigma is an example) present pay as a 4 year package (10X), which is split 1/2/3/4X across 4 years.
I think the challenges US universities/companies are today facing is something India has needed for a couple decades now. I would not be surprised if many of these are tried in the US.
If you do plan - reach out to me, it's something I've wanted to expand into (currently run UG curriculums).
They'll probably just shut it all down.
With AI, what's the ROI on educating the masses? Paying specialist academics to know things? Just leave them dumb and let save the rich some tax money. Dumb people are easier to control anyway.
On research: If some tech bro can't do the research in an afternoon with an agent, it's not worth doing at all, let alone worth paying a PhD for a tenured lifetime job to do.
The OpenAI math dump showed that it’s not worth paying hundreds of PhD-years if a tech bro can do it with an agent.
The generation of Americans that went to the moon had only 5-8% of people go to college. Whether someone is smart or dumb has little to do with formal higher education.
Education is not subsidized only because it's a public good.