Privatization: a disaster waiting to happen

By September 13, 2013February 18th, 2021No Comments

The rape of the Royal Mail by private institutional investors, many based abroad, will be one of the most sickening privatizations yet to befall our society, which is coming increasingly to resemble the dysfunctional, monopoly capitalist model of the United States.

Within living memory the Royal Mail provided an unfailingly reliable 365-days-a-year service, with two deliveries daily, to anywhere in the country, for the universal price of a few pence per item.

Now, first class letter post costs the best part of a pound, there is one delivery daily (usually in the afternoon) and no Sunday delivery.

Can this be called progress?

Now, admittedly, the rise of the internet has significantly reduced the volume of letters that would otherwise have been posted. But while the need for paper documents remains and there is no indication that this is likely to change in the immediate future, so too will the need for a reliable postal service to deliver them to all parts of the country.

With millions of our compatriots unemployed and more millions underemployed, the problem is not primarily one of a shortage of willing labour. Still less would this be a problem were pay to be more generous.

Equally, with a National Investment Bank authorized to make interest-free loans to government for the purpose of economic regeneration (think New Deal for the twenty-first century) there would be no difficulty raising the necessary capital for a thorough modernization of Royal Mail.

But instead we have an absurdly overpaid foreigner brought in (British jobs for Foreign workers) to oversee the marketization of the once proud Royal Mail and its sale to the highest bidder. No doubt it will end up in largely foreign ownership, like so many other of our country’s vital utilities (the railways, gas, electricity, water and telephone services, for example); the universal principle (of same-price delivery anywhere in the country) will in due course be abandoned; prices will rise; the workforce will be shrunk; the real wages and conditions of service of the remaining workers will fall; and the daily delivery will end, beginning with the axing of the Saturday delivery.

All of this is inevitable once the Royal Mail ceases to be a publicly owned and managed service, notwithstanding the worthless guarantees of the Establishment politicians who are paving the way for it. Regulation by a toothless watch-dog, incapable of barking let alone biting, will no more protect the interests of the public than was the case with the banks.

Private for-profit enterprises, such as the Royal Mail is due to become, exist in order to make a profit and will not continue to exist unless they do. In fact, simply making a profit is not enough: they aim to maximize their profits over the medium to long-term.

Since Royal Mail is, like the banks, too important to society to be allowed to fail, a privatized Royal Mail will provide an inferior service for which it will be permitted to overcharge the public.

The solution is to retain the Royal Mail as a public service and to provide the investment that it needs in order to modernize from general taxation. Economically, this would be a more rational way of raising the necessary investment capital than relying on costly private finance (which will demand its pound of flesh). Socially, too, it would be far more ethically acceptable in terms of fairness than enabling private investors to make huge profits from such an indispensable utility as the Royal Mail.

Of course, economic considerations may not be decisive for Establishment politicians whose sights are fixed upon the short-term ‘solution’ of a quick fix. They are happy to waste twelve billion pounds of public money every year on overseas aid to Africa, Asia and South America, but refuse to invest public money in Britain, where it is really needed, where it would do far more good and where it ought to be spent.

It will be easier for government to do this (ie, to invest in our own public services) and many other necessary and desirable things, once Britain has left the European Union, because of the latter’s ideologically driven dislike of subsidized public services.