Good-oh! The water companies might go bust, how excellent!

Very serious people are being very serious about a very serious problem of great seriousness:

Heavily indebted water utilities are at greater risk of collapse as interest rates rise, the industry regulator has warned.

In a stark admission, Ofwat said companies that have piled on debt could go under, piling further pain on households at a time when bills are already soaring.

David Black, chief executive of Ofwat, said it was keeping a close eye on the impact of rapid rate increases from the Bank of England, which could heap costs on highly leveraged water companies.

The bit that’s being missed here - as everyone is being very serious - is that this is the point.

Capitalism does indeed produce returns for the capitalists if they get the process right. Capitalism also comes along and steals all their capital if they get it wrong. Which is the great glory of the capitalist system - screw up and you lose. Something which keeps folk on their toes trying not to screw up so that they don’t lose.

The system thereby contains two incentives which other systems don’t - rewards for getting it right, punishments for getting it wrong. Given how human beings work it’s therefore the system which pays more attention than any other to trying to get things right and not wrong.

If the water companies do go bust then the reservoirs, pipes, sewage plants will still exist. It’ll just be the capitalists owning the current legal wrapper - and employing the managements which led to the business collapse - who lose. Which is excellent, isn’t it?

A system whereby mismanaging the finances of the water system led to there being no water would, of course, be appalling. Which is why we’ve this circuit breaker in the system, the capitalists and their cash. They screw up they lose. Someone else then owns those assets and we can rinse (ahem) and repeat as necessary.

Or, as we can put it, yes there’s a serious problem here and we’ve already solved it. If the water companies go bust then great - that’s the point of the system we’ve installed to manage the water companies. You know, foolish management and their money are soon parted etc.