This is because free market capitalists seek to establish monetary value over essential services and thus anything that is providing an essential service and not turning a profit is considered wasteful.
I understand how it might seem that way. Let me try and explain. Ultimately, every service or product must be valued. Prioritising or deciding how to use resources which have alternative uses is impossible otherwise.
There are several ways to value products (goods and services):
1. Subjectively, by the consumer who directly benefits from the product
2. Subjectively, by decision-makers who substitute their judgement for that of the end user
3. Objectively, by entrepreneurs who impute value based on the anticipated valuation of the product (in their case, a producer's product, i.e. raw materials or means of production) by consumers.
When I decide to pay $2 in toll to cross a bridge, buy I use my subjective judgement to assess that the corssing is worth more to me than the $2. That is an example of #1.
When a government decision-maker decides to spend $10,000,000 to build a new bridge, he is substituting his judgement for that of the drivers who will ultimately enjoy the bridge. His economists, for example, may work out that, over the life of the bridge, 5,000,000 people will drive across it. The politician determines, using his own subjective judgement, that the the value of the crossing for each driver is greater than $2. This is an example of #2.
When an entrepreneur decides to build a toll bridge, he also uses his judgement. In his judgement too, the value of crossing the bridge will exceed $2. He pays $10,000,000 to build the bridge, and then collects $2 in toll from drivers wishing to cross it. This is an example of #3.
What is the difference between #2 & #3? There are two critical differences.
First, the entrepreneur's judgement is ultimately
being tested against reality. The politician's never is.
Second, and most importantly, the entrepreneur pays with his own money if he made a mistake. If, for example, he erred in estimating the cost of construction, the number of drivers or the subjective value they assign to the crossing, he pays the price.
If the politician made a mistake, that mistake will only be revealed (if at all) well after the term of the politician is over. He isn't going to pay the cost of the mistake, either financially or, most likely, even politically.
Ok. How does that apply to "essential services"? If providing those essential services can be done profitably, there is no problem. For example, food is an essential service provided for a profit as a matter of routine by the private sector.
There are two reasons I can think of why people might think that an essential service couldn't be provided for a profit.
1. The service is essential for people who cannot afford to pay for it. There are two solutions in this case:
a. Give those people money. Pure and simple. They can then use the money to buy those services (first and foremost, of course, those they themselves consider "essential"). Those services can now be provided for a profit (in other words, an an accountable, cost-concious manner).
b. Use the judgement of the people whose resources are being used. In other words, the donors. When a government welfare program is put into place, politicians substitute their judgement either or both as to the value that the charitable contribution would have for the ultimate recipients or for the taxpayers. When a true charitable donation takes place, the donor uses his subjective judgement as to the value of helping others.
But reality begs to differ-lives are being saved irregardless of means for those in need. Per capita public spending elsewhere is much lower and yet we get much better public healthcare. Why is this possible, if public spending is invariably mismanaged and so wasteful? Why can I get a free heart transplant in Australia, and yet my government assigns less tax money to me than the US government spends on an American where such a procedure is crippling without expensive private health insurance?
Briefly, because the American health-care system is far, far, far from being a free market. Not only is government directly paying for about 50% of all expenses (through Medicare, Medicaid and VA), and not only did government introduce distortion into the market through its selective tax deductibility. Government also oppressively regulations the market at both the personal/professional level and at the corporate level (e.g. by requiring coverage as part of insurance policies).
The private sector lacks market-wide coherence. It doesn't matter if you can gauge minute economy-wide trends if you cannot coordinate the economy in any specific long-term direction.
That's where the insight of the classic economists, starting with Adam Smith, comes in. You don't need a central authority to coordinate and create "coherence". The price mechanism, when allowed to work, does that. Spontaneous order emerges, as it does in many other systems. We see that in countless markets, as well as systems such as language.
This is why we end up with the tax payer having to bail out private enterprises that have failed spectacularly at astronomical expense.
Tax payers never had to bail out private enterprises. Politicians chose to do so for the benefit of their crony Wall Street (and Detroit) friends.
As for sightedness, the private sector is based on even shorter term considerations that never extend beyond financial year projections.
Not at all. If that was the case, why would anybody invest in Google, years before it started to make profits? In the private sectors, actors always consider the long-term prospects of an enterprise.
Firstly, when it comes to critical services and provisions such as infrastructure/schooling etc, (i.e the BASIS of society itself) it is the consumer that always pays. Either through taxes or fees. The difference being is that a public venture is not geared from the outset to be a profit generating endeavour. Thus fees always increase when a sector is privatised, ranging from banking to telecommunications to transportation.
When a sector is truly privatised (i.e. when government gets out of the way, rather than continue to try and direct it), prices always go down. You saw that with flight prices following deregulation and with telecommunication prices. In the medical arena, prices for procedures in which government isn't involved (e.g. plastic surgery, laser eye surgery and veterinary care) are going down, even while prices for government-interfered-with services continue to go up.
Private education is much cheaper than public education, btw. Banking has been cheap and reliable before government started to intervene.
Simply stop producing overlapping and thus useless junk and assigning arbitrary monetary value to it. This is wasteful, no matter how much profit it generates for those controlling the means of production.
Who is assigning "arbitrary value"? The value is determined in the market by the willingness of people to spend their own money. If a consumer agrees to pay $100 for X, he or she values X at more than $100. This valuation is subjective (as all valuations ultimately are), but isn't arbitrary. It certainly isn't determined or assigned by the capitalist producers.
The free market always tends towards monopolisation and stagnation anyway.
Make up your mind. Is the problem having too many overlapping products, or monopolization?
In any event, the free market tends to find the most efficient enterprise size, which depends on the industry. In some cases (fine-dining, for example), enterprises tend to remain very small and localised. In other cases (microchips, say), economies of scale predominate.
In not case in history, however, has a private-sector monopoly (not assisted by government-granted special privileges) resulted in harm to consumers. Never. Ever. So much more "always tends".
Ask yourself who is manipulating them, and to what end. Use the typical western neoliberal economy as your case study. Here it has been shown in plain sight that others peoples money and your money is all fair game when it comers to bailing out profit-based enterprise that got rich off consumer backs. There is no public sector anymore, there is no public government anymore in these regions.
Other people's money is fair game when government is involved. When the private sector has to operate without crony relations with government, it has no access to "other people's money".
An organised society has ways of acting in a coordinated, organic fashion that moulds the environment and itself to a specific direction. This is the basis of civilisation. If we are to achieve full societal awareness and direct ourselves as efficiently and as beneficially as possible, we must learn to control market forces.
That's like saying we must learn to control nerve impulses to allow a human being to act as a single organism. Of course we don't - nerve impulses are precisely what allows a human to act like as single organism. Any attempts to manipulate them will tend to diminish that quality.
Similarly, market forces don't need to be controlled. They are precisely what allows society to act as a coordinated, organic whole. Society is organised, but need not be centrally-controlled.
a) able to affect positive economic policy on a broad scale and see those effects implemented irregardless of immediate cost, positive in the sense of benefiting the majority of society in the long term.
But central decision makers have neither the knowledge required to determine which policy, when implemented, will result in maximal benefit to society, nor the incentives to do so.
b) see them implemented in a way that is fair
Fairness is only in the eye of the beholder. There is no objective standard of fairness. Whenever you hear people talk about "fairness", know they mean "the way I like it".
Free men are not equal and equal men are not free.
Government is not the solution. Government is the problem.