Business

Privatizing services inside the European Union

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Thanks to the European Union, things like these finally become possible:

Deutsche Post is about to lose its monopoly on the postal service. And after that, customers will be able to choose from new green, red and blue postboxes on the street as well as old yellow.
 
As part of a European Union move to introduce greater competition in letter delivery services, Germany on Jan. 1, 2008 will abolish Deutsche Post’s exclusive right to deliver letters under 50 grams — the last monopoly left for what used to be the only game in town.

This is a far cry from the times when Deutsche Post wasn’t just delivering the mail, but also had a stranglehold on German telecommunications, and the whole affair was owned by the government and protected by the employees tremendously powerful trade unions. These kinds of entrenched interests could only be overcome on the European level, which is one of the reasons why I maintain that the EU offers net benefits that outstrip the costs as well as the (not inconsiderable) annoyance factor. This also isn’t the first instance something like this is happening, the EU previously made the member states privatize and liberalize their energy and telecommunications sectors, as well as take the first steps towards the privatization of postal services, which is why the delivery of letters below 50 grams (not quite two ounces) is the last monopoly left until now (although some countries are dragging their feet to preserve it for an additional year or so).

All of these steps had been absolutely crucial for economic growth in Europe, without them the EU economy would have been even more stagnant than it was over the last 15 years or so. Just imagine what, for instance, online services would look like if telecommunications still were run and owned by the government; we would have to apply for a dial-up modem and could count ourselves lucky to get one in less than three months – no DSL or cable modems of course, the post office would want to be paid by the minute (just as they used to when the whole affair was still run publicly), and that’s easier to do with dial-up via a telephone line than with more modern alternatives. If you extrapolate this kind of arrogance and shortsighted greed to services in general it becomes easy to see how the traditional interest groups around here could have prevented Europe from evolving beyond the traditional industrial society. It shouldn’t be underestimated just how powerful our various interest groups are, some of which have been around for centuries in one form or another. As I wrote above, you have to move beyond the national level to defeat them them, and the European Union currently is the best venue to do so successfully. Should the various interest groups learn to cooperate to thwart such efforts we’d have a serious problem, but at least for the foreseeable future it looks as if they are too shortsighted and selfish to make common cause. By the time they have learned better, globalization will hopefully have eroded their respective power bases to an extent that it won’t matter anymore.

Wisconsin Electricity Situation

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First and foremost I would like to thank Jonthan for inviting me to become a part of Chicago Boyz.  I have admired this blog for a long time and am looking forward to being a contributor.  I have written for a while over at my “home base”, Life In The Great Midwest.  We have three contributors over there and write on a variety of topics.  I will keep most of my “cat blogging” over there and try to post some of the more serious issues that I write about here.

 One of the topics we spend a lot of time on at LITGM is energy.  My co-contributor Carl is what I would consider an expert in the field, having spent many years in various roles that have had to do with energy.  My post here about the current situation in Wisconsin is in response to his recent post about the woes of Illinois. 

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“Requirements Kill”

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A commenter on the post immediately preceding this one links to his own thoughtful essay on project management. This kind of thing may be old hat for the PM gurus here but it’s meat to me. You might like the essay if you, like me, are interested in the dynamics of managing big technical projects, and particularly if you are interested in how projects fail.

How I Learned to be the Adult – And Why I Often Forget – 2 –

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May 10 update: Instapundit links to another discussion of Rubin by Will Wilkinson in The Economist.

May 9 post:

When I started my little business, I despaired when a large chain opened down the street two weeks before we did. What I should have recognized was that large chains & naïfs could see our college town needed copy shops. We survived – for quite a while. Tired and worn out, both from a pregnancy in my forties and a series of rather stupid business moves on my part, I sold out years later to a locally run company. We were doing several times the amount of business we had that first year – and, while some such shops had come and gone during thirteen years, several survived, making varying but real profits.

I was wrong, but I was working from the gut. Paul Rubin’s “Evolution, Update: Immigration and Trade” points to why I felt as I did and why I was wrong. Just as it is probably not always wise to do what both villains & heroes do in adventure dramas – head for the high ground – we retain instincts that once helped us survive.

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How I Learned to be the Adult – And Why I Often Forget – 1 –

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This afternoon, while I was grading, I looked up, hearing in the background the great speech at the end of The Caine Mutiny, addressing the Fred McMurray character. He’s a writer – one of those articulate intellectuals Shannon describes. I wouldn’t argue that Shannon doesn’t have a point, but I think that speech points to what lies beneath the weakness of such men’s arguments. The writer is an observer, a voyeur, in the world of the Navy. He posits theories, in this case condescending toward the Humphrey Bogart character, clearly of a lower class and with limited education, but a man who has been willing to act in the Navy when few did. Applying the fount of so much theory of a half century ago (Freud) to him, McMurray found him inadequate. But the writer wasn’t even willing to take responsibility for those words. On the stand, he hemmed and hawed – and lied. Neither the men who mutinied nor the captain escaped because they made decisions – some wrong-headed. They were accountable. He was not: except in one brief, drunken speech by the defendant’s lawyer, a man who is ashamed to have made the ship’s commander come apart on the stand, but who realizes that is his responsibility to get his client acquitted.

Words were once commitments – our integrity rode on our ability to live up to those words. This is no longer true – that movie of a half century ago followed in the path of those like Prufrock, who see their lives as revised and revised again. We are not committed by our vows, by our loyalties, by our words.

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