The problem with state ownership of the water companies

From America comes a little tale which is relevant to our British shouting match over the privatisation of the water companies:

‘This is everybody’s problem’: inside America’s growing sewage crisis

In the docuseries Wasteland, communities battle institutional neglect and personal and environmental damage

The American water systems are - largely enough - under what we would call local authority control. They’re suffering from a lack of that routine maintenance and investment over time which keeps a water system in top-notch condition.

Which is also roughly what the original diagnosis of the British water systems was under government control. In theory, yes, it’s true, government can allocate capital across society’s needs. Given the lower cost of capital to government - based on the ability to tax us all off into the indefinite future - this should, again in that theory, lead to a cheaper and also ideally funded water system.

Except it didn’t work out that way. Government found it was much more exciting to spend that societal capital in other ways. We might even say that this is a feature of political control of those purse strings. There’s not much red ribbon cutting to do for the cameras when the money’s spent on repairing the drains. Better to, say, fund more grievance studies courses so that joyful graduates can be crowded into the photograph.

The British water systems gained access to much, much, more capital when privatised. Further, the more privatised - as with England - the more more capital was available and the more upgrading of the water system that resulted.

Now we have that same problem to be analysed in the US. The water systems have not been invested in properly over the generations. We can use this either as a further example to show us that privatisation here was the right decision, or proffer our own privatisation as the example for the US to follow.

Yes, it’s true, in theory government should be able to allocate capital across infrastructure, borrowing powers making that capital cheaper. Real world experience says - now with this added example - that it doesn’t work out that way. The problem with the theory being that it doesn’t actually take politics into account - which is a significant problem if it’s political control of investment that is the subject under discussion.