Contracting out and the free market are not the same

From CroziervisionWiki

Author: Patrick Crozier

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The term "privatisation" is currently being used to describe two totally different things: the free market and contracting out.

In a free market a private company is dependent on its customers (not the government) for its income. Examples of privatisation that have created a free market include: British Telecom, the electricity industry and British Airways.

Contracting out is where the state pays an otherwise private company to do some work for it. Examples of contracting out include refuse collection, the NHS Fast Track Scheme and, to a large extent, Train Operating Companies created as part of rail "privatisation". Conceptually, contracting out is no different to nationalisation. The only difference is that in one case the contractors are private companies and in the other private individuals.

I am in favour of the free market and against contracting out. However, you may find examples of me referring to British Rail privatisation simply because it's in common usage.

Q&A

Large extent?

While TOCs are under contract to the government they are not entirely dependent on the government for their income, much of which (and sometimes all of which) comes from passengers

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