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A distinct failure of logic – why must utilities be publicly owned?

Summary:
There is that PJ O’Rourke comment to consider, that if you think health care is expensive now wait ‘till you see how much it costs when it’s free:Labour’s plans to renationalise part of BT to offer free broadband to all has sparked warnings that the plan would suffocate competition, bankrupt rivals and cost as much as £100bn. Jeremy Corbyn said on Friday at Labour's policy launch that the party would buy Openreach, the network infrastructure arm of BT, from shareholders.“What was once a luxury is now an essential utility. That’s why full fibre broadband must be a public service,” the Labour leader said.Offering free broadband would save households £30 per month on average, Mr Corbyn said.The contention that a government behemoth will cost each household less than £30 a month seems dubious,

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There is that PJ O’Rourke comment to consider, that if you think health care is expensive now wait ‘till you see how much it costs when it’s free:

Labour’s plans to renationalise part of BT to offer free broadband to all has sparked warnings that the plan would suffocate competition, bankrupt rivals and cost as much as £100bn.

Jeremy Corbyn said on Friday at Labour's policy launch that the party would buy Openreach, the network infrastructure arm of BT, from shareholders.

“What was once a luxury is now an essential utility. That’s why full fibre broadband must be a public service,” the Labour leader said.

Offering free broadband would save households £30 per month on average, Mr Corbyn said.

The contention that a government behemoth will cost each household less than £30 a month seems dubious, at best, to us.

But it’s the free to households that looks to be the deeper economic problem. Bandwidth is a scarce resource. Access to it has to be controlled in some manner. The best way of rationing any scarce resource is through the price of it.

After all, we don’t want everyone to be Hillary and running their own servers at home, that’s going to overpower the network - make it vastly more expensive that is - in no time at all.

There’s also that problem of an essential utility. Why must that be a public service? After all, if something is truly essential for a civilised life why would we turn over provision of it to the more inefficient method of doing so, bureaucratic control?

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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