Monopolistic Blues

Green Park Extension has twenty two blocks of thirty houses each. Assuming that each house has one person who spends the entire or a large part of the day home- that would be six hundred and sixty people who suffer four hour long power cuts every single day. Lets assume that fifty percent of these people either leave home, sleep throughout it or simply do nothing about it (for example, have inverters)- that still leaves three hundred and thirty people people who painstakingly call the electricity board to complain about service and find day after day that the phone line in question is simply off the hook.

People complain that the privatisation of the Delhi electricity board has done just about nothing to improve its service. Here’s why: The principle here is that of a monopoly. A monopoly is a monopoly is a monopoly regardless of it being private or public. Replace one monarch with another in a country and your situation is very unlikely to improve as a citizen– bring in Democracy and suddenly you empower people. Competition similarly empowers people with choice within the sphere of goods and services. Something like a democratic consumer driven set-up. Ideally, if my electricity vanished for more than an hour everyday (assuming that is how much I can tolerate) I should be able to go out and pick another provider– like cellphones. If you messages get delivered a day later than it should- you can go yell at Hutch and then change to Airtel or Idea or Dolphin or BSNL or any other service…

A private monopoly or a diapoly for that matter is not much better than a government service. These institutions respond to the same set of incentives, no competition and nothing to hold them in check and so they do a bad job. The best control for the ‘greed’ of a private enterprise is the greed of another private enterprise. It is plausible that people believe that if there must be a monopoly a government monopoly is better than a private monopoly. For all it is worth- a govt is still partially restricted by its role as a ‘welfare’ state. We know form experience and corruption that this is not true! In fact- government scandals and un-audited accounts are that much easier to cover up than private ones for the simple reason that the rule of law is but an extension of the state in India.

Somewhere down the line the prettiest picture is that of private service providers competing in a framework of law. Obviously one can say that the rights of the poor in a monopolistic nation are better protected by a govt than by private concerns- but really- that is a matter of purchasing power. If the citizen had money, then a private concern is the better option any day. Indian people you will say do not have purchasing power, I would argue that that is because we look to redistribute wealth and not create it in the first place!