Tuesday, October 17, 2006


What do these two stories have in common?

Employees swindling state firms, Cuban paper finds (Rory Carroll, The Guardian A rare investigation by one of Cuba's communist newspapers has found that most state-run services are corrupt and prey on the population. Employees are skimming clandestine profits by charging too much and delivering smaller portions in an epidemic of theft and shoddy services, the Union of Young Communists newspaper, Rebel Youth, said this week....The newspaper did not propose any remedies but some government critics argue that part of the answer is to allow private businesses take over more functions from the state sector. Profit by numbers. Editorial, The Guardian regarding the United Kingdom: Cracked nuclear reactors are being shut down, pushing up electricity prices. A rail operator is going into administration [bankruptcy]. An Australian bank is paying £8bn for Britain's biggest water supplier. Meanwhile, experts are calling for effluent to be recycled for drinking to avoid inevitable shortages and higher bills. What do all these events have in common? Apart from their dismal appearance in the news recently, the three sectors involved in the stories - water and sewerage, rail and energy - were once all part of the state. ... The problems facing these sectors, along with several others, date back at least to the late 1970s when governments began skimping on maintenance and investment. Corruption is endemic to all human activity. If enterprises are owned by the state, the employees (or politicians) are tempted to steal. In theory, voters are supposed to act as correctives. In practice, especially in one-party states, there are no correctives. If the enterprises are owned privately, the managers are tempted to steal. In theory, customers, regulators, and the courts are supposed to act as correctives to private enterprise. In practice, especially with a toothless media, corrupt regulators, and courts appointed by business, there are no correctives. What these stories have in common is an alienated public, prevented from doing oversight either by the dead hand of a totalitarian system or by the Cuban Communist Party; same thing.
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