Excellent question. Anything that doesn't have a natural monopoly. I can say with certainty that the following should be socialized or delivered in non-profit ways:
* Water
* Sewer
* Power
* Internet
* Healthcare
* Fire
* Police
* Roads
* Education (added per /u/CodeMage)
Feel free to chime in if you can add anything I forgot.
I'll note that we should have explicit public subsidies for Internet and that I would much prefer to have public networks with private operators (to my mind that's heaven for competitive markets but politically impossible in the US).
I completely agree with you. The last mile should be public, with anyone permitted to provide service to customers (similar to the old DSL/CLEC/ILEC model).
I'd just like to point out that Adam Smith himself (the "Carl Marx of Capitalism") agrees with you for fire, police, and roads at the very least (I haven't read everything he wrote). If he were born today rather than in 1723 I suspect his list would look very much like yours.
It's interesting that you seem to view providing Internet access as a natural monopoly. While (from what I see as an outsider) it seems to be common in the US for households to have only one practical ISP available, that is certainly not the only model possible.
For example, here in the UK, we have the formerly nationalised telephone network provider required to allow individual ISPs access to key parts of its infrastructure via local loop unbundling, so those ISPs compete for the contracts with individual customers. And while that infrastructure is indeed common and so in a sense a monopoly at that level, there are also multiple cable companies and mobile networks with completely independent infrastructure all the way down. There have even been a couple of impressive success stories where installing high speed broadband infrastructure was too expensive or risky in a certain geographic area for any of the big commercial providers to take it on but the local community devised their own solution, sometimes even finishing up with a better connection than what most of us get in big cities.
In other news, prices for Internet access in the UK seem to be dramatically cheaper than most places in the US.
The reason that Americans view Internet access as a natural monopoly is because there is a monopoly--the city. ISPs have to negotiate rents from the city government. While it is possible for a city to offer fair-access terms they have largely discovered that they can demand rents much higher than you would expect by keeping the number of tenants small.
These rents comprise something like 5-10% of city revenue. And so everybody gets what they want:
* The city gets a free 7% budget bump, and doesn't care who pays for it as long as it's too complex to be an election issue
* ISPs get a monopoly, and don't care that they play the scapegoat because consumers have no other choices anyway
* Citizens get better government services at lower tax rates. Sure, they pay for it via a backdoor tax on internet access but nobody really notices that and they direct their anger at the ISP rather than the elected government
Really the only way to throw a wrench in this system is something like Google Fiber. Nobody wants to be the elected official that turned Google away, because that is actually a sound-bytey enough issue that could come up at re-election. And Google, as a company that doesn't really care about being a profitable ISP, will only move in to a city if it gets a pretty good deal on the rents.
> And while that infrastructure is indeed common and so in a sense a monopoly at that level, there are also multiple cable companies and mobile networks with completely independent infrastructure all the way down. There have even been a couple of impressive success stories where installing high speed broadband infrastructure was too expensive or risky in a certain geographic area for any of the big commercial providers to take it on but the local community devised their own solution, sometimes even finishing up with a better connection than what most of us get in big cities.
This is what I'm advocating for. A public last mile that any service provider can use.
What you describe is the definition of a natural monopoly. However, the monopoly comes from physical wires, not whatever flows over them. So, the infrastructure should be a public good (most infrastructure, really, not just wires, since it's more efficient and less wasteful to build a single network and keep it in excellent condition than to build multiple networks providing the same service at a lower quality), but whatever flows over it can be provided privately and competitively (also, each ISP would have to build it's own servers/routers, etc.)
What you describe is the definition of a natural monopoly. However, the monopoly comes from physical wires, not whatever flows over them.
Part of my point was that there is no physical monopoly here, even on the wires.
BT (formerly the national telephone provider) has one set of infrastructure.
Cable companies have their own, literally installing a different box in your home with an independent physical connection to their own network.
If you use one of the mobile providers, which is viable for a home connection in the 3-4G era if you're only using a modest amount of data, there is no physical wiring to the home at all.
There are even a few special cases where people have literally built their own infrastructure as a community, only hooking in to some big provider's network higher up the hierarchy, presumably on some sort of customised, one-off deal.
So while we do have local loop unbundling and a shared-last-mile kind of deal, and we do have ISPs competing for that same physical connection, even that is not a monopoly provision.
I'd definitely argue that Police and Fire have natural monopolies. It's definitely more efficient for one agency to manage the entire police force for a city, rather than having multiple. Imagine having cops from 5 different services go out to one call, possibly mistaking the others for an armed civilian. You can see where that would lead, given how trigger happy some cops are already. Imagine 5 different fire trucks arriving at a scene. They wouldn't have enough space to do their job with all the others around them. Keeping track of the people at both of these scenes is also nearly impossible with several forces (and it's critical to know who's in the burning building or who's armed in a crime scene.)
However both police and firemen already deal with those issues, especially at the edges of cities. E.g. where I live, at the edge of two, police from both regularly handle incidents.
Firemen are even more heterogeneous, in that they have arrangements for big fires and catastrophes like tornadoes where adjacent units come to help. After my city got hit by an EF-5 tornado, as I was exiting my trashed apartment complex, there were fire units varying from a small Indian tribe that's right across a state border from us (and the city e.g. treats the sewage of their casino) to one 40 miles away. Next day, the markings on my apartment door were from a fire unit the came from 160 miles away.
What is needed is something like unity of command/hierarchy. Having two or more units responsible for the same territory leads to the sorts of problems you cite, e.g. a friend told me the NYC city police and subway police once got into a big firefight. This would have been in the '70s or earlier, now they've been unified.
Healthcare is a highly imperfect market, and that's what makes it subject to either huge amounts of regulation, or outright external management. Consumers are very ill informed. Ccosts are not displayed, treatments options are not well defined, and knowing all of the options and understand them requires more time and education than is reasonable for most cases.
Education is tricky, and honestly, I don't know any better than the next guy how to solve the issue. What's important to one parent may not be important to another. Second language? Art? Music? Sports? Recess? Lectures? History? Religion? Critical thinking? What outcomes are important? Good test scores? Writing?
None of these attributes are incumbent in the nature of delivering health care. They're just things that are part of the system today. As you stated, in today's health care system, true costs are obscured. The exact problem is that nefarious corporate forces have removed most of the real market elements by adding layers of indirection (health insurance), which allows everyone in the industry to maximize their dollars billed and push some paper around, and leaves a great many people totally screwed. The issue is that there's just enough variance and division that there isn't a unified, whole-hearted call for reform, because it works great for 30% of people, works mediocre for 40% of people, and completely leaves the last 30% destroyed. I believe that those ratios are calculated and intentionally kept in place to prevent unification and meaningfully addressing the issue on a social scale.
Health care has become a perverse industry because its market properties were destroyed not by government, but by malicious corporate conglomerations out to maximize their own profit at the expense of human life. People forget that one of the purposes is government is to prevent private organizations from growing too powerful and interfering with the general welfare of the people, because the narrative is rarely framed this way, but it's a very important governmental function. I don't think socialization is the answer, but something has to be done.
I think health care needs to be brought back down to earth, and we should outlaw all non-catastrophic health insurance products. The insurance racket has completely destroyed that market. There are other elements that have caused the health market to get completely out of whack, but insurance is at the very core of the issue, and it has to go away.
When almost half of the country's bankruptcies are due to health care debt, simply sick people trying to stay alive, we have a real social problem that we need to address.
Of course, we did the opposite of this and made it illegal not to have health insurance, only further inflating the size of the monstrosity that has leeched and destroyed the system in the first place. I don't believe writing a blank check, like the other countries have done, is the way out. I believe the way out is going back to a what-you-see-is-what-you-get approach, and forcing medical providers to charge rates people can actually afford, as their business will immediately plummet if they don't seriously rework their billing structure to become affordable again since people will actually be paying it now.
I disagree about health insurance. I think that in the absence of health insurance, health care wouldn't work. Imagine getting in an accident, you're unconscious, you need emergency assistance. If the hospitals weren't reasonably sure you're insured and can pay for the services, they wouldn't be motivated to help you.
Most European countries offer health insurance, and total healthcare costs are much lower (compared to the GDP), so I don't think insurance is the problem (also, AFAIK most countries are bankrupt because of bad bank loans, falling GDP/taxes, and social payments (pensions), not health care costs).
The real problem is that doctors get paid when people are sick, so they are not incentivized to heal them, long-term (without regulation). If doctors were paid when the patients were healthy, you wouldn't have this problem. But I don't know how to implement that.
There's a question though here as to how to define insurance: in your example, everything still works if everyone has catastrophic insurance.
Insurance, classically understood, is risk sharing, not cost sharing. In other words taking it from a "not everyone will use this service" risk sharing model to "everyone will use this at some point" cost sharing model is what causes the problem of hidden pricing.
You can have it both ways (risk sharing and visible prices) because most healthcare costs aren't unforeseen. In other words, the number of accidents where the hospital needs to be relatively sure insurance is involved pales in comparison to the cost of routine visits/care which could be paid for out of pocket and prices would then be visible allowing for competition.
That's a good point, which is why there were some suggestions in some European countries about having a "paid first visit" that is refunded if there is actually something wrong with you. I in general support things like this. I also support some parallel "private" medical system, where you can pay to "skip the line" (but e.g. in Slovenia, only certain procedures can be performed in the private system).
However, there are also many medical costs that can be foreseen (even planned for) but are either "beneficial" for the society (e.g. childbirth) or still risky and essentially no-one's fault (e.g. cancer - most people will get it, but some will get it at 50, others at 95). Incidentally, it's cancer and the catastrophic treatments (e.g. heart surgery) that are most expensive. Possibly also because it's in the big-pharma's interest to keep it this way (at least for cancer).
This is exactly the root of the issue with medical "insurance". We know that everyone will need medical care at some point. Insurance models work only in circumstances where the policy is rarely used; the concept is that everyone wants to be protected in case this rare, almost anomalous event happens, so they're all willing to put up a small payment to pay for that coverage in the extremely unlikely event that it will be utilized. However, in today's society, medical care will be needed by everyone at one point or another, and many people will need it consistently or in large amounts.
Insurance is absolutely the wrong model for something with this kind of usage pattern. The insurance industry is notorious for its antics precisely because they're one of the only industries that can only make money when they don't provide the service you're paying them for. The fact that medicine is so widely used makes this especially egregious with regard to medical insurances. They'll do anything they can to deny your claim because aside from basically accidentally having a healthy group of people in the insurance pool (due to the way corporate policies work, and the new health legislation), denying claims is how they make money.
Education doesn't, but police and fire definitely do: police because beat cops reduce crime for everyone, so they're a natural monopoly. Fire as well, since stopping houses burning down helps stop the entire neighborhood (especially when you have close-together row houses) burning down.
Healthcare is arguably a public good, at least as far as vaccinations and contagious diseases go, since herd immunity is a large way to fight them (especially for contagious diseases for which we have 80%-90% effective vaccines). Not so sure about other illnesses (like cancer) though. I'm personally for socialized medicine for other reasons (humanitarian), but I agree that the natural monopoly argument is not applicable there.
A natural monopoly doesn't mean it provides a public good, it means that a single entity can provide the service more efficiently than multiple competing entities.
I draw the line at things that people need in order to fully participate in society. If a good or service doesn't meet that threshold, a private market only solution is likely just fine. Otherwise there ought to be at least some socialized option available.
My list would include: non-elective healthcare, food, housing (same as for food), electricity, water, local/regional transportation (e.g. for commuting to work), internet access and possibly basic internet-capable mobile phones.
Basically "natural monopolies" are certainly all candidates for complete socialization.
Health care only works "better" when socialized if you believe that health care really should be so expensive that they have to print extra money explicitly to pay for it. There's no reason that has to be an integral property of health care. Turns out that most of the time, we don't need hospitals the size of college campuses (incidentally another thing that is completely unaffordable). The reason things cost so much is because true costs are obscured, just as they would be in a socialized system, by insurance.
IMO non-catastrophic insurance should be abolished, the government should overcome the supply chain cycle ("Sorry, I have to charge $500 for this MRI because this machine cost me $4 million") by producing its own functional medical equipment and selling it at or under cost, and health providers need to get back to reality and charge face rates that real people can pay directly. And we all need to come to terms with the fact that some of the extravagance probably needs to be toned down.
"Turns out that most of the time, we don't need hospitals the size of college campuses (incidentally another thing that is completely unaffordable)."
However people are not willing to accept the consequences of hospitals that can't surge in catastrophes. When an EF-5 tornado hit my city 3 years ago, it took out one of our two hospital complexes. Things got ... rather intense at the other (http://stormdoctor.blogspot.com/2011/06/first-response-mode-...) but it being big, and stocked with otherwise excess inventory of all sorts of things, kept the death toll at ~160 instead of a likely 1,000 or so.
