Civil rights activist Mamphela Ramphele recently stated, “Government was weighed down by conflicts of interest between its role as equity holder of Telkom and being a regulator” and “The current stalemate which has resulted in expensive and inaccessible bandwidth for the majority who need it most is costing the country billions in inefficient public services.”
The logic you have to accept here is that the government is both the benefactor and regulator of a service – in this case, Telkom. These conditions lead to the service being more expensive and of much poorer quality than if the company was privately owned and anyone could compete with it on a fair playing field. Hence because the guy that is making the rules is also the guy that stops anyone from coming and doing the job better and cheaper the job costs more and tends toward poorer quality. If the government was not using tax money and using force to hold onto a monopoly would anyone doubt that someone else would come in and do a better job for less?
This applies to Eskom or any another monopoly that is kept in power by unlimited funding and legal blocks to anyone who wishes to enter into the market. Monopolies are not bad when it means that one company gained the monopoly by doing something better then anyone else for cheaper and that anyone is welcome to try to perform the service and if they can do it better they can take over that portion of the market. The consumer wins in this scenario every time.
When you are using tax funding and force to stop people from competing it means that you are aware that others can do it better. This is simple economics, so why would it not apply to education? You already know the that private education is much better then public or government education. There is no ‘cheap’ private education because right now its impossible to compete with the tax funding being doled out to government schools. If schools did not receive government subsidies it would mean that everyone would need to compete on a level playing field and that service would have to be good otherwise the consumer would take their money elsewhere. Also, government blocks the free entry of educators to compete in the schooling space, by forcing them to be licensed by the state.
If there was a profit motive even if it was a smaller motive than the current private schools have there would be a reason for people to provide education and to compete to provide it on the market. We now have the situation where we have some people buying Ferrari’s and the government giving away bicycles with two flat tiers to those who can’t buy the Ferrari. We have no one producing Fords and VWs because people like Ramphele keep saying, “yes the bicycles are useless but if we stopped giving them away they would have nothing.”
This assumes that the market principles that apply to everything else on the market don’t apply to your specific good.
“The poor quality of education in our country is generating poverty and inequality and undermining the opportunity we have to build a nation united in its diversity,” she said, and I cannot disagree with that at all.
