Asset Sales: Nationalisation Versus Privatisation – Anecdote in Process.

New Zealand businessman, Selwyn Pellet, is both an undoubtedly successful because innovative entrepreneur and businessman, and, on Twitter, a gentleman: respect to Selwyn on both counts. However, he is one of a type of businessmen who have made it via private enterprise, who then after the success, start preaching statism, and hence the destruction of a free market and so the free society, despite the evidence of their own lives. It confuses me, because it seems to beg both philosophy and economic theory, and I wonder what the wellspring of this phenomenon is. I suspect, or at least wonder if, it’s tied somehow to that hobby horse of mine regarding the growing propensity under the Left ethic brainwashed into us via the New Zealand School Curriculum document, chasing that bloodied altar of the common good, to emote on issues, rather than think rationally along the lines of cause and effect, so that Selwyn while extremely clever in his field of expertise, misses the big philosophic and economic picture.

Anyway, here’s an interesting little Twitter scenario, I’ll be interested to see Selwyn’s response. He is an implacable opponent of National’s upcoming partial privatisation of power generator, Mighty River Power (MRP), believing in a state monopoly for power generation; on the back of his tweeting a radio show host to this effect, I have put the below query to him:

@selwynpellett @seanplunket Selwyn, in following your beliefs, I assume you're going to govt. about nationalising your business interests?
— Mark Hubbard (@MarkHubbard33) May 2, 2013

Answer:

Even by the time of publishing this piece, Selwyn has provided the below answer. I will let it stand for now, and will come back to it again soon:

@markhubbard33 @seanplunket Infrastructure that has monopolistic characteristics should be owned or regualted by the state. Thats it.
— Selwyn Pellett (@SelwynPellett) May 3, 2013

My further replies:

@selwynpellett @seanplunket Best policy making toward competition, not back to state monopoly and planned economies ... brown outs coming
— Mark Hubbard (@MarkHubbard33) May 3, 2013

End Piece:

Labour and Greens have both stated that if they win next year’s election, then MRP, et al, will be renationalised in order to lower power bills for consumers. Unfortunately, and the reason for why power was partially privatised in the first instance, once you break any connection to market signals, a state which believes itself to have a limitless purse in the tax take for cross-subsidisation across government functions, ultimately leads to such endemic and then systemic distortions across the economy, that economies ultimately fail. Proof: history.

Labour and Greens for a short period of time will be able to regulate prices to the consumer lower, but they cannot regulate the cost of generation, and lack of new generation will be the first of the effects felt via brown outs.