They can self-destruct or sometimes they might scale back (as some of the big players in the health industry did when expanding started to cost them money). What you are talking about is called economies of scale, and the larger you get, the more profitable you can become until a certain point and then, you have essentially grown too big. Economies of scale, however is more of a microeconomic issue than a macro (in this case) and what is being discussed here is a macro issue although it does, indeed, involve specific businesses. Also, it's not as if psycho has cornered the market on economic discussions and whether or not women should be allowed to fight fires. There are differing opinions and despite his elegant nature, there a noble prize winners and very intelligent people on both sides of these issues. It's not as cut and dry as he would sell to you and people are not idiots simply for disagreeing with each other.

  oops double post

Actually, the (railway) privatisation matter went kablooie mainly because they tried to cut back expenses immediately after privatisation. The main targets were additional service provision (ie. the stuff that makes the customer feel good about things rather than pure efficiency) and, most importantly, the maintenance budget. Companies, especially big ones, like to focus on short term profits (ie. the stuff that gets managers their bonusses) and maintenance is a favoured target. This resulted in lots of delays and people standing around for a long time in the now more bare than ever stations. Naturally this caused the customers to avoid using the train if at all possible. Which equally naturally results in reduced income for the company. The managers then intervened by further cutting costs and increasing prices. (I think you can see where this is going...) The problem here is again (like in the TW case) that the company is providing a semi-essential sevice to the public at large, in which you inevitably get unprofitable sectors that must nevertheless be serviced lest large numbers of people get stuck without services that become ever more essential for succes. (how far will a modern company get without internet access? how does a town/city survive without modern businesses?)

The thing is, infrastucture type services (ie. railways, internet access, electricity, roads, seawalls, policing, fire protection, all the big stuff) are inherently unprofitable in many areas, but they are needed everywhere to function properly. The railways were probably "losing money" as a public utility type company and not massively efficient. But they got the job done. Now we're stuck with a system that is still losing money, but gives us much less in return.

I'm not crazy about business being run with taxpayer money, but the thing is that some types of service are better off with the weak spots being filled in from general funds rather than cut out/squeezed as being unprofitable. That is, in fact, the original point of taxes. To pay for the things that are not economically efficient, but still needed. (the military comes to mind, as do fire departments and such) Sometimes inefficiency and waste of money is still preferable to "economic efficiency", which screws lots of people over.

In internet provider terms: the business as such may not make a profit, but the service they provide keeps the rest of the economy ticking over nicely and that is where the real profit is. (Have there been any studies into the added value to the economy of the internet? I bet it's a big number!) Also, a near universal acces internet makes businesses possible in communities where they may not otherwise be practical, providing jobs in towns and villages. And if the main profit is in the general economy, wouldn't it be logical that the cost is paid out of the general economy too? (note that I'm fortunate enough to live in a country where the population is dense enough that internet provision is economically viable pretty much all over, so having it run by businesses is quite practical here. Only nationalise services if it's really nessesary in the specific case to get the job done.) 

Eh, lets just say that I've chosen to reply only to the things psychoak says where our opinions are not so far apart that further discussion will yield nothing other than a flaming row.

Nesrie, the Nobel prize is awarded by the Royal Swedish Academy of Sciences.  That the Nobel prize has mostly gone to real economists and avoided political tripe to the degree it has is a miracle.  Socialists can study economics just fine, it's history they tend to ignore.

Krugman for instance, which is surely one of the people you're thinking of, is just a pond scum socialist that gets caught lying to support his views regularly.  That he's said something intelligent enough to get a prize for it is irrelevant.  He ignores facts or makes them up whenever necessary to support a view.  It's very well documented, and was long before he won.  Of course, he's also one of the few socialists smart enough to realize welfare can go to far, if only they'd listen to him and stop the stupidty of rent control.  If only he'd apply his realization to other like systems.

It's even the same function, you limit something to avoid exploitation and kill the production of the good or service.  You cap rent so that the consumer can't be exploited.  No one builds apartments because 20 year residents they can't evict will be paying less than the property taxes come out to.  You require companies to rent their networks out but cap the price below the real cost of providing it.  No one builds competing networks because all they'll do is cut their own throat and never make the investment back when they can already make really good money renting bandwidth off the poor bastards that already have one.

Proof is useful, winning a prize is irrelevant.  If someone is obviously wrong and proven so by historical and empirical evidence, being a Nobel prize winner is irrelevant.  Economists are the theorists, history is the proof.  History proves that non-coercive monopolies self destruct as soon as they become problematic, that only by coercion, which is illegal, can they actually exploit their position.  No further regulations are needed, and history further proves that the ones that come about anyway hurt like hell.  Even Standard Oil was a benefit to society and a loss when broken up, and that is the prime example of a coercive monopoly in the industrial era.

Edit: Railway, did they have any competition, and how were they chosen?

Edit again:  No wonder I couldn't find anything.

Assuming you have your location right and you live in the Netherlands, rail has always played at a pretense of being private.  Your idiot government bought their shares and gave it a monopoly in an attempt to keep a dying company from going under, like most of the inefficient and hugely wasteful rail systems around the world were doing.  After they ran out of shares to buy, they had to switch to straight out subsidization of the company to avoid having to admit they fucked up.  What you have today is a government controlled fuckup.  Your rails are controlled by a government agency, your major city cars are controlled by the same company that's had them all along, and the cars in other areas of the country are controlled by multiple new companies that bought rights to the area.  I don't know what to make of their actions, but sensible isn't it, and it's most definitely not privatized.

An educated man would know that in this day and age, it doesn't matter where you live. I lived outside the USA for a little while. i assure you if someone judged my actions based on the location of my ISP, they'd be just as much an idiot.

Someone who doesn't like women in the traditional roles of men. Someone who judges people based on where they live. Someone who reacts to cultures not their own with disdain and hostility. Someone who is incapable of having a debate or a discussion and show any due respect. I am pretty sure we have a name for people like that.

And I assure you, I'll put a lot more weight on what actual economist say over you, anyday. And incase you continue to have trouble understanding certain sentences, weight does not mean follow blindly nor does it mean a lack of your own analysis.

Not to derail the topic here, but...

Oh, wait...

Anyway: Ars.

Actually, there is in fact competition, it just different companies on the same rail system. And don't tell me that's not true, I see the trains (conveniently labelled with their company logo) every day at central station. And the company is indeed managed by private management, it's just that the majority of the share are in government hands. (the original deal was that the government would at first have a controlling share, but not intervene in operations. Later, when the market had worked it's miracles, they would sell off the rest of the shares) Do you really think it matters who gets the share dividents (if any)? Yes, shareholders get a say in how the company is run, the problem here was that they let management have it completely their own way without intervening. (aside from the whole "you have to service all stations thing, which was an emphatically stated clause in the original contract) And yes, the company is (partly) on government life support. If it wasn't we wouldn't have railway coverage countrywide. I guess the government thought that wouldn't be an acceptable situation. How about you?

Interestingly the situation has been improving somewhat now that the government is paying more attention to what the managent is doing. Guess what? You shouldn't privatise things that fulfill a social function, since private interest are, by defintion, focussed on profit rather than functionality. And frequently it's short term profit at the expense of the long term too. But you know about that last little detail too, considering the results are plastered all over the news in every country.

I just cancelled my HBO and made a point to send time warner investor relations an email about it in relatino to their unitelligence. If this is such a good business idea then how come no one in their right mind has done it before? Dumb commies!

I'am on Charter cable and the service Tech told me that all the internet providers were going to eventually put caps on the downloads as there are to many people using the internet.  Seems they are running out of bandwidth so they will be limiting people so everyone will beable to be serviced.  Charter hasn't done that yet.

That's just bu****it... They're just too cheap to upgrade their hardware as needed.

/facepalm

So why we getting this if it isn't market fores?  Umm it is.  I've built networks for ISP's and carriers, and they way the offer home user service is by using contended bandwitdh.  It's generally 20 to 1.  So an ISP sells a home user a contended service, at T1 speeds, they're selling that T1 to 20 people.

So what does that mean for you as a gamer?  You contending with little Johny downloading every bit of internet pr0n 24/7 via bittorrent down your link.  You get horrific lag.  So how does an ISP make it fairer?  They apply limits on downloads for users - go over the cap, you pay extra.

You the sensible user, who downloads games, patches, and the occasional film or piece of music, you actually get better connection speeds.  For someone who's built services - I buy a contended service.  I've never yet busted my cap.

It's like a resturant, there's always those who'll offer as much as you can eat.  You want that go for it.  This is just a different type of restraunt, one where you pay for what you order, not for what the other guy orders.  You choose what you want. 

It's choice, not some William Gibson plot

Shit Nesrie, must you be so damned dense?

If Butch the biker chick can bench 250 and grind me into sausage between her thighs, Butch the biker chick would make a damn good fireman.  Excuse me, fireperson for all you politically correct retards.  Butch the biker chick isn't who they're letting in, Sally the swimsuit model is getting in too.  She makes the calendars a lot less queer at the end of the year, but she's a really shitty fireman.  Sally can't drag her own ass up a ladder in full gear, let alone carry someone else down it because Sally's a girly girl and doesn't have 12 inch biceps.  Kinda like I don't have 12 inch biceps.

Having a pecker isn't the requirement for being a fireman, it's being a tough bastard that can throw your oxygen deprived ass over their shoulder and carry you through a window and down a ladder while wearing fifty pounds of gear.  Sexism is irrelevant.  Traditional roles are irrelevant.  It's called reality, check in to it some time.

I'll pass on making a claim that I'm not sexist, I have doubts it would be true as I tend to agree with my mother's views.  I can't even figure out why I'm supposed to be discriminating against you because of where your isp is, I don't even know where you live.

Zaisha, I'll assume your information is correct as I can't read any of the applicable languages and information in english is... vague.

Consider the true alternative, not just life without rails.  If, in the sixties, rail transport had died out in your country the way it did here, what would have happened?

The idiots in Congress kept Amtrack alive, since they were using it, giving me an excellent dichotomy to view without ever leaving home.  In the Amtrack service area, there is massive traffic congestion.  The cities are densely populated with little throughput, it can take hours to get out of NYC.  The publically supported rail systems that service the city are the only quick method of traveling in NYC proper, road congestion is near absolute at peak traffic near the downtown area and at the major access points.  It's a parking lot.

On the east coast, in places like LA, there are intra city transit systems as well, but no subsidized intercity rail system like Amtrak.  Intra city traffic congestion is lower, massively, the inter connecting freeways allievate the problem almost entirely.  Inter city traffic congestion is minimal.  You can drive from one city to the next in a reasonable period of time even during rush hour.  You can drive through the city in a reasonable period of time other than rush hour.  Parking lots are uncommon.

In Dallas, there is even less of a public system.  Short of an accident, the major throughfares through the city rarely slow down to the speed limit.  Parking lots are a rare occurance.  Road construction is priority one.

In NYC, very few people can afford to have cars.  There are no parking spaces in most areas, you basically need your own driver just to have something to do with it while you're doing your business.  In LA, cars are common even among people considered below middle class, but traffic congestion in the inner city leads to a large increase in pollution and fuel consumption.  In Dallas, the only problem they have is building roads fast enough to keep up with the growth.  The relatively small percentage of people unable to afford an automobile have access to an excellent public transit system.  In an area that services several million people, daily ridership is under 200k.

Would you rather live in NYC, where people ride the subway to $200k a year office jobs and live in hole in the wall apartments, or Dallas where some of the guys flipping burgers for a living drive Toyota's while still having bigger apartments?

Timer Warner, Charter, and the rest of the cable companies that sat back and refused to upgrade, refused to offer better services are not going to do well with their current scheme to charge more and offer less, despite the verbal support of people who refuse to look beyond their couch and the small portion of the world they live in.

No shit, really?

I'd go back and count how many times I've said they're going under, but since you'll just continue arguing nothing to avoid inconveniencing your world view I'll just pretend you were refuting something instead of trying to convince yourself that you have a point.

The cable companies will never die because uh... you're a poopyface!

Edit: I like this view edits thing.  You should have stuck to what you started with.  As pointless as what you went with, but at least I'd have been amused less.