# There are not two, but three sectors: Market, government, & utility **URL:** \ **Category:** Great Debates\ **Created:** [August 6, 2010, 11:31pm UTC](https://boards.straightdope.com/t/there-are-not-two-but-three-sectors-market-government-utility/549465 "2010-08-06T23:31:02Z")\ **Posts on this page:** 8\ **Page:** 1
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [August 6, 2010, 11:31pm UTC](https://boards.straightdope.com/t/there-are-not-two-but-three-sectors-market-government-utility/549465/1 "2010-08-06T23:31:02Z")
Michael Lind makes a case for that in [this article.](http://www.salon.com/news/feature/2010/07/20/lind_right_left_divide/index.html) > [@](#): > > That fault line involves the very nature of the economy itself. If we set aside the nonprofit and household realms, then it is a crude but fair generalization to say that conservatives believe in an economy with two sectors — the market and the government — while liberals believe in an economy with three sectors — the market, the government and the utility sector. > > Liberals believe that some goods and services could be provided in a purely competitive market but should not be. Instead, these goods and services should be provided to citizens by an industry organized as a publicly regulated utility, which in the terms of ownership can be private, public or a mixed private-public enterprise. > > Whether an industry should be treated as a public utility depends on the nature of the provider or the nature of the goods or services themselves. If the provider is a natural monopoly, like a sewer system, then there is a case for public ownership or for private ownership combined with public price regulation, so that the monopoly does not take advantage of its power to gouge consumers. In other cases, like electricity, competitive markets might be possible, but price volatility would be too disruptive to be tolerated by consumers and businesses. The political debate between liberals and conservatives over, say, health care or financial regulation, is not, however, between those who regard these things as utilities and those who regard them as properly market functions; rather, the American right of today (in marked contrast to the American right of not-long-past) dogmatically rejects the very idea of a utility sector as here defined. Is that a defensible position? ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [August 7, 2010, 11:17pm UTC](https://boards.straightdope.com/t/there-are-not-two-but-three-sectors-market-government-utility/549465/2 "2010-08-07T23:17:24Z")
I fail to see the difference between a “utility” and a “government service”. The article seems to make assumptions that anyone who isn’t a Liberal is an idiot and clearly wrong. Lind also seems to be operating from a premise that just because a service is operated by the government or regulated as a utility, it will automatically be run better and more effectively. Really he is just creating arbitrary sectors to justify more government regulation. ---
**Author:** ![Peremensoe](https://avatars.discourse-cdn.com/v4/letter/p/ce7236/32.png) [@Peremensoe](https://boards.straightdope.com/u/Peremensoe)\ **Post date:** [August 7, 2010, 11:30pm UTC](https://boards.straightdope.com/t/there-are-not-two-but-three-sectors-market-government-utility/549465/3 "2010-08-07T23:30:09Z")
What is the point of “private ownership combined with public price regulation”? If the circumstances require such close regulation, why not just make it a public agency? ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [August 8, 2010, 12:07am UTC](https://boards.straightdope.com/t/there-are-not-two-but-three-sectors-market-government-utility/549465/4 "2010-08-08T00:07:26Z")
I don’t know about the point, but that’s how most local utilities are set up. Private ownership, with state or local regulations pegging rates to CPI, or cost of fuels, or whatever. ---
**Author:** ![The\_Tao\_s\_Revenge](https://avatars.discourse-cdn.com/v4/letter/t/73ab20/32.png) [@The\_Tao\_s\_Revenge](https://boards.straightdope.com/u/The_Tao_s_Revenge)\ **Post date:** [August 13, 2010, 4:01am UTC](https://boards.straightdope.com/t/there-are-not-two-but-three-sectors-market-government-utility/549465/5 "2010-08-13T04:01:11Z")
> [@spark240](#): > > What is the point of “private ownership combined with public price regulation”? If the circumstances require such close regulation, why not just make it a public agency? Tell that to the electric company, the gas company, the telephone company, etc. There’s certain controlled monopolies on services due to the problems have ten different sets of power lines for 10 different companies running through an area would cause. ---
**Author:** ![qpw3141](https://avatars.discourse-cdn.com/v4/letter/q/6bbea6/32.png) [@qpw3141](https://boards.straightdope.com/u/qpw3141)\ **Post date:** [August 13, 2010, 8:06am UTC](https://boards.straightdope.com/t/there-are-not-two-but-three-sectors-market-government-utility/549465/6 "2010-08-13T08:06:40Z")
> [@msmith537](#): > > I fail to see the difference between a “utility” and a “government service”. Really? A ‘Government service’ is any service provided by the government - whether directly or contracted out. A ‘Utility’ is an organization that maintains the infrastructure for a public service, or the services themselves. It is easy to envisage a state where all utilities are government services or none are. However, as it _usually_ makes sense for a utility to be a monopoly it would usually be the case that any utility that is not a government service has, at the very least, government regulation of it’s pricing and often service level obligations. ---
**Author:** ![puddleglum](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/puddleglum/32/137_2.png) [@puddleglum](https://boards.straightdope.com/u/puddleglum)\ **Post date:** [August 13, 2010, 5:33pm UTC](https://boards.straightdope.com/t/there-are-not-two-but-three-sectors-market-government-utility/549465/7 "2010-08-13T17:33:20Z")
Utilties are ways for governments to have power but avoid responsibility. Deregulating industries so that they function instead of utilities has been a great success. During the late 70’s and early 80’s the trucking and airline industries were deregulated and that was a huge success. This is because markets are knowledge generating through the use of prices. Since utilities have prices set by political considerations the prices do not reflect knowledge and inefficiencies are inevitable. An example of this is the Post Office which has prices set by laws and not markets and is now 15 billion in the hole. The more utilities an economy has the worse the resource allocation will be and the more markets an economy has the better the resource allocation will be. Market failures which need to be remedied by utilities are very rare. NRA style fascism just does not work. ---
**Author:** ![qpw3141](https://avatars.discourse-cdn.com/v4/letter/q/6bbea6/32.png) [@qpw3141](https://boards.straightdope.com/u/qpw3141)\ **Post date:** [August 13, 2010, 5:52pm UTC](https://boards.straightdope.com/t/there-are-not-two-but-three-sectors-market-government-utility/549465/8 "2010-08-13T17:52:27Z")
> [@puddleglum](#): > > Market failures which need to be remedied by utilities are very rare. Basically anywhere where you have to have a monopoly to avoid lunacies such as four companies, each with their own pipes, providing sewage removal. Even there the trick is to miminise and segregate the part of the operation that needs to be a monopoly. There’s no point in having ten electricity companies all with power cables to your house but similarly there’s no reason why the entity that provides the transmission needs to be the same as the entity that does the generation.