They hate competition

This article about the privatisation of the UK’s electricity by James Meek in the London Review of Books from 13 September 2012 (I’m still catching up) is well worth a read.

There are many good bits (where by “good bits” I mean “bits that make one despair”) but this section caught my eye:

…before full competition was established [in the electricity industry], he, the regulator [Stephen Littlechild], imagined he would act as a surrogate, a kind of State Competitor General, enforcing occasional price cuts to keep the private companies on their toes. In the end, he thought, the need for regulation would largely wither away. What Littlechild, an academic with no business experience, didn’t fully take on board was that the reason private companies compete with each other isn’t that they like competition. They hate it, and will only compete if forced to do so. Rather than competing with a rival on price or product or revenue, they’ll try to eliminate the rival firm and take over its territory by buying it; or reach an unwritten agreement on an oligopolistic cartel of a few big firms, carving up the market between them.

I don’t know why, among all the arguments against privatising certain industries, this hadn’t hit me before: “The reason private companies compete with each other isn’t that they like competition. They hate it.” Of course, yes.

Commenting is disabled on posts once they’re 30 days old.

15 Oct 2012 at Twitter

  • 6:20pm: @alanconnor @alicebartlett We’ll struggle on. It takes us a week at the best of times.
  • 5:08pm: Looks like it’ll be possible to live in Tharg’s Nerve Centre: (King’s Reach Tower to be refurbished, 20 flrs of flats)
  • 5:04pm: Making Pivotal Tracker reflect reality. As much as it can.
  • 3:33pm: @tominsam @blech Yeah, the lack of any definite word is worrying. I wouldn’t start using a service like that now, but I was young, carefree…
  • 3:25pm: @alanconnor Test tweet or not, today’s cryptic has me and @alicebartlett scratching our heads. We’re only used to the regular Monday setters
  • 1:25pm: @alruii Just googled… Red Bull sold 4.631 billion cans in 2011. Coke serve 1.6 billion drinks every *day*. They could go to Mars by balloon.
  • 1:16pm: @alruii I can’t help thinking Coke could have been doing even more silly/worthwhile things with their profits over the years.
  • 10:46am: @iamdanw @jaggeree @tomtaylor Gentleman Amateurs are where the action is. (Or Lady Amateurs of course, although doesn’t have the same ring.)
  • 10:44am: @tomtaylor I can do that much myself.
  • 10:42am: @tomtaylor I’ll let you know if I can’t find a “rock star”. I don’t want to end up settling for a “guru” or a “badass”.
  • 10:41am: @tomtaylor No, a “rock star”.
  • 10:32am: Do I know any London-based freelancers who know their Node.js? Or do you know any?
  • 10:29am: @robertmchardy I *think* that would fix it. Only took six years! I’ll just have to hack things for now. Again.
  • 10:02am: Another Django project, another round of swearing about contrib.auth requiring users to have usernames, not just email addresses.
  • 7:41am: Wishing all at @GDSTeam good luck for this week!
  • 6:39am: @tedmills Or marijuana-fuelled brawls and domestic violence.

15 Oct 2012 in Links