November 21, 2010
No one is claiming that the private sector is perfect!
As many of you have by now noticed, I write a lot about government incompetence and government failure. And indeed, it is very important that we realise the risks of letting governments undertake things that can be better performed by the private sector.
But as those who have read BFN and my draft manuscript, DOF, know well by now, I am not a fanatic believer in the private sector. I am fully aware that the private sector is not perfect, and that human imperfection haunts us all – whether in the government or private sector.
The only reason I advocate greater freedom for the private sector is because by having a powerful and diverse private sector we get to make real choices. If a private sector provider turns out to be an idiot or a cheat, we can move to another one (at least most of the time). When a government fails, however, there is little we can do to improve our situation, unless we want to pack up our bags and move from country to country like a vagabond.
Indeed, every few days I’m amazed at the absurd levels of stupidity displayed by many sections of the private sector.
Let me give a few stories from my own experiences:
1. For many years I got my cable broadband service through Optus. All went well till the service started having intermittent outages. I called the company and they sent a technician to repair things. The technician who came to my house said that the fault was in the poles somewhere outside the house, and went off to work on the poles. I waited for the technician to return but he did not! The problem was not fixed, either. I was kept in the limbo, my time (in getting hold of this repair person) having been totally wasted. On checking with the company over phone they had no record of what had happened. This was a display of such sheer incompetence that I left Optus and switched to Telstra – another private provider.
2. Telstra’s cable broadband service was fine (except that it was very expensive), but its billing service was in total shambles. For nearly one year it did not charge me for something it should have and charged me for something it should not have. Paying through the direct debit system I did not check the details of my bills till one fine day Telstra billed me a few hundred dollars for alleged backlogs in billing! I contacted the company and after a transferring me from one person to another for about one hour they finally told me they couldn’t even find me on their system! I then had to lodge a complaint with the industry ombudsman to resolve this matter. I was disgusted with the incompetence displayed by Telstra and swtiched to TPG, with which I have so far stayed even though I get slower ADSL service.
3. On another occasion, I procured a credit card from BP-Citibank which promised a 1% repayment on purchases. However, within a few months they reduced this repayment to 0.5% of the purchases, without changing (reducing) their annual fee. I complained and they finally waived the first year’s fee, but their arrogance was excessive that I soon changed my credit card provider.
4. I have a regular investment program with Colonial First State. I contacted them today in order to increase my contributions. After half an hour of wasting my time asking me one question or the other, the lady on the phone told me that she’d send me a form to fill in. I asked her to fill in the details and send to me for signature. She apparently couldn’t do that. So why waste my time!? If I had to merely fill a form, I could have downloaded and filled it without contacting her and wasting half an hour of my time. I’m done with this stupid company and will switch.
5. The other day Paypal froze my account on the ridiculous pretext that I’m a ‘charity’ and need to provide them with this or that information. They provided me with no coherent method to communicate my questions or grievances. Finally, through a convoluted process, I found a way to contact a real person, and now they tell me that they’ll reinstate my account. However, I’m definitely going to switch to a better provider. What gall – disabling my account in such a shabby manner. Arrogance. I don’t tolerate arrogance. I leave.
6. A few years ago I bought thousands of dollars worth of household goods from a major retailer, Harvey Norman. One of these was a kitchen sink but they supplied me one that faced the wrong direction. When the builder came to fix the sink it would not fit, and I had to buy a more expensive one from a nearby store given the urgency. Harvey Norman declined to compensate me for this major error of theirs, nor for the hassle they caused. For years I have therefore not bought anything from the company. Harvey Norman has lost thousands of dollars of my business due to their stupid action of disrespecting my time and not compensating me for their error.
I’m sure you can readily supply many such examples as well.
In each such case “reputed” private sector companies seem to behaved stupidly or arrogantly, treating customers and their time with disdain. As if these companies can survive without customers! The customer is ALWAYS the king. The company that forgets this does so at its peril.
In each case I voted with my feet – leaving the company for ever. I’m sure you’ve done that many times, too.
No doubt, many excellent companies exist, as well. I’d rate Officeworks, OPSM, Target, K-Mart, Bunnings and Myers as excellent companies for (based on my experience so far) they genuinely care for their customers and work hard to keep their customers satisfied. I therefore go to these stores again and again.
One may well ask, in such a competitive market, why do stupid private sector companies exist? I don’t know. But they do. Clearly the private sector is not perfect. But we should not deduce from this the the government is perfect! The government sector is at least equally imperfect.
The only good thing with having a diverse and competitive private sector is that if one supplier fails us, we can switch to another.
With the government there is no such relief.