see discussion overview

Related

Is it better for services to be supplied by multiple competing providers or by a government monopoly?

Categorised in:

Update: This question is not meant to imply that there is always a way for a service to be provided for by multiple competitors. It is simply asking only about those scenarios where is a way.

Multiple competing providers: competition accelerates progress

Without competition it's too easy for organisations to stagnate - to concentrate on satisfying the needs of the organisation rather than the needs of the service-user. The opportunity for growth and the risk of being out-competed means that competing organisations must constantly improve themselves.

Note that this answer does not imply that government monopolies are always bad. Government monopolies may be good things if there is no alternative way of providing the service or if the alternative way does not involve competition.

It's also important to note that "a service supplied by competing providers" does not necessarily mean that the providers are competing for private individuals' money. The providers could be competing solely for government contracts or for private individuals' non-monetary tokens (perhaps a government-controlled points system which favours the poor).

Note also that the competing providers are not necessarily regular private companies. They could be autonomous government bodies or democratically-organised social enterprises.

I think 'competing' is a key (and false) assumption behind the question

Exactly how much competition is there in the oligopolies that have replaced state provision of electricity, power, telephone, rail transport? My feeling is that any consumer benefits that have been seen have been because of changes imposed by regulators (eg RPI-X forumlae), not market competition.