Quote Originally Posted by wufwugy View Post
That scenario isn't market failure.
You asked for a market-wide failure. If you're contending that it's not market-wide because it doesn't affect people who live without electricity, then I think I have to shake my head and walk away. Can you clarify?

And an elimination of the profit incentive is effectively equivalent to elimination of the good/service itself.
Right. So what happens if a school becomes unprofitable? What will it's shareholders do with their investment instead?

It's certainly plausible. Let's say a school does a massive expansion/remodel with the intention of attracting a larger student body and generating more revenue. Now let's say people don't change to that school enough to cover the additional overhead and the school starts losing money. Why would that school stay in business?

What happens to the students when it shuts down?

It sounds nice to have the government step into markets and eliminate the profit incentive, but it doesn't work
This is not what I'm talking about happening. What I'm talking about is the government stepping into markets and eliminating risk. When the government subsidizes risk, you create a situation where the business is actually encouraged to take higher risks, seeking higher returns, but never feeling exposed because the government has your parachute ready. This is bad for consumers. It means businesses, in this case the very business that controls education, and thus your entitlement to fair access to the market place, is able to take on new risks with impunity.

Bottom line. If you're going to privatize education, then you must either
A) have the government subsidize the risk. Essentially declaring schools "too big to fail". This is bad.
B) accept the risk that a school, or district, might fail and essentially leave those citizens without access to education. This is also bad.

Honestly wuf, if you're going to advocate to privatize anything, even if it works, the final resolution is probably going to be some slow, complicated, unweildy monster made up of a hybrid of private business and government. Why bother??? Wouldn't your efforts be better spent using the political tools at your disposal in order to drive effective management of education by the government?

If you're just gonna say "government sucks at everything, so why bother trying to fix it", then you're guilty of the same cynicism that drives black youths to drop out of high school.