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One of the oldest Tory talking points is that private business is always more efficient than the state because “it’s your own cash at risk”.
As a commenter on BlueSky described it:
“Too much not subject to profit motive. V powerful when it is your own cash at risk. State should do less.”
This is misleading – and in practice, it’s a myth that has been repeatedly debunked. Here’s why:
1. Profit motive ≠ efficiency
Private firms often cut corners, under-invest, or exploit monopoly positions when profit is the driver.
Think of rail companies cancelling services while paying dividends or water firms pumping sewage into rivers while rewarding shareholders.
The message is clear: the profit motive doesn’t guarantee better service – it guarantees shareholder returns.
2. Public services aren’t businesses
The state runs the NHS, policing, education, defence and others. These are not markets where “consumer choice” works.
You don’t want your doctor saving money by cutting corners, or your fire brigade working only if it’s profitable. Do you?
3. It is our own cash
Public money funds the state. Pooling our cash resources through public services is cheaper and more effective than every individual paying private providers.
When services are outsourced, customers don’t just pay the the cost – they must also pay shareholder profits.
4. The evidence of failure
The past 40 years of privatisation have been a living experiment. Water, energy, rail, mail and many other publicly-owned resources were sold on promises of efficiency.
But the reality has been higher bills, worse service, and crumbling infrastructure.
Meanwhile, the NHS – for all its Tory-forced faults – remains a cost-efficient healthcare system compared with private insurance models.
5. The “state should do less” dodge
Calls to shrink the state rarely mean cutting MPs’ perks or corporate subsidies. They always mean cutting the services on which ordinary people rely.
Meanwhile, private firms constantly lobby the state for bailouts when profit fails.
The verdict:
The idea that the profit motive automatically makes services more efficient is a myth.
Public services are not only essential, they often provide better value and reliability than private alternatives.
In public utilities, privatisation has been tried – and has failed disastrously.
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Myth debunked: the ‘profit motive’ doesn’t make public services better
Share this post:
One of the oldest Tory talking points is that private business is always more efficient than the state because “it’s your own cash at risk”.
As a commenter on BlueSky described it:
This is misleading – and in practice, it’s a myth that has been repeatedly debunked. Here’s why:
1. Profit motive ≠ efficiency
Private firms often cut corners, under-invest, or exploit monopoly positions when profit is the driver.
Think of rail companies cancelling services while paying dividends or water firms pumping sewage into rivers while rewarding shareholders.
The message is clear: the profit motive doesn’t guarantee better service – it guarantees shareholder returns.
2. Public services aren’t businesses
The state runs the NHS, policing, education, defence and others. These are not markets where “consumer choice” works.
You don’t want your doctor saving money by cutting corners, or your fire brigade working only if it’s profitable. Do you?
3. It is our own cash
Public money funds the state. Pooling our cash resources through public services is cheaper and more effective than every individual paying private providers.
When services are outsourced, customers don’t just pay the the cost – they must also pay shareholder profits.
4. The evidence of failure
The past 40 years of privatisation have been a living experiment. Water, energy, rail, mail and many other publicly-owned resources were sold on promises of efficiency.
But the reality has been higher bills, worse service, and crumbling infrastructure.
Meanwhile, the NHS – for all its Tory-forced faults – remains a cost-efficient healthcare system compared with private insurance models.
5. The “state should do less” dodge
Calls to shrink the state rarely mean cutting MPs’ perks or corporate subsidies. They always mean cutting the services on which ordinary people rely.
Meanwhile, private firms constantly lobby the state for bailouts when profit fails.
The verdict:
The idea that the profit motive automatically makes services more efficient is a myth.
Public services are not only essential, they often provide better value and reliability than private alternatives.
In public utilities, privatisation has been tried – and has failed disastrously.
Share this post:
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