The British government is dumping the mail. The Royal Mail will be privatized sometime within the coming weeks, officials confirmed.
Last week, the UK business secretary filed an "intention to float" at least half of the nearly 500-year-old agency on the stock market. Which means the public will be able to buy stock in the postal service, which is… fun, I guess.
The U.S. is no stranger to the fact that delivering mail in the 21st century is a huge money suck, but so far no one's succeeded in selling it off--though it's been suggested, with calls for both partial and total privatization. But the United States Postal Service struggled to even kill off Saturday mail earlier this year, first announcing that Saturday mail delivery would be discontinued, then delayingthe change because a Congressional law prohibited messing with the schedule.
We'll see how the situation with the Royal Mail unfolds. The postal worker's union has said privatization "would be bad for customers, bad for staff and bad for the industry," while the advocates in the government have said the move will enable the mail service to borrow private money and not compete for public funding.
A government, elected for 4 years, is selling off an asset that has been owned by the electorate (respectively the nation) for 500 years. Privatization is theft, just like nationalization, and it should cause as big of an uproar.
Don't know about the UK but the US Postal Service is the worst thing in the whole world. They are closed way more than they are open. The people are miserable, disorganized, and just generally slow and incompetent. Not only that but you have to pay extra to guarantee your letter or package gets to its destination. Are you kidding me? So if I pay you and give you my letter you are telling me that theres a chance it will get there? More often than not my letter don't make it to their destination. I avoid it at all costs.
Please privatize the Postal Service for the love of God...
juujuuuujj, you've got it completely backwards. This looks like it could be the start of the government deciding NOT to steal from the public. Why is mail delivery even a government concern? How does the government having a monopoly on mail delivery help anybody? It certainly isn't helping protect my life, freedom, or property. In fact, it guarantees that I'll be stolen from via taxation.
I think it would make sense for governments everywhere to just stop providing a mail delivery service at all. Does anyone honestly think that the government is the only group capable of delivering mail? Wouldn't you think providing citizens with options of where to spend their money is better than a government which takes it by force and decides for you? I'd much rather choose to spend my money on the mail service I see providing the most value, than be threatened with jail time if I don't pay for the one the government chooses.
Why are all these nations in the world privatizing everything. Nations are not corporations and shouldn't act like it. Little good has ever come of privatization. What good is it for the economy if eventually mail is only delivered 4 times (or less) per week and if 6 companies have to work in the same street where before there was only 1. Is that more efficient and effective. Good god no. Stop this madness of privatization.
The issue I raised was asset confiscation. A confiscation of private property is stealing, and so is confiscation of public property without the express permission of the owners, i.e. the electorate. Postal services and other utilities are a treasure trove of existing infrastructure paid for by the electorate and built over decades, so a sell-off as important as this should require their consent (via referendum). It shouldn't be decided by a come-and-go government, influenced by lobbyism.
No one said a private company can't deliver mail, but postal services are a low-innovation market (like water distribution, metro transport and utilities). A private firm won't come up with new and better water pipes, trucks or sea vessels. A private space company may add efficiency to its market, but competitive postal services don't add much. They're exactly as efficient as well-run public postal services (in proper countries that don't intentionally run public services into the ground to justify a sell-off). The service is ultimately cheaper to the electorate, because it's also the owner. Give the same non-innovative market to 3-4 companies, and watch them fix prices and agree not to compete, because it's more profitable that way. There are plenty of examples in water oligopolies, electricity distribution, toll roads, metro transport, etc. The "private is always better" mantra is cute. But it's wrong.
+2 points for anyone who gets the reference :)
The US Postal Service is a fully privately owned entity who's shares are owned by the US Government. Sadly when it was reorganized this way, supervisors and managers were allowed to construct flawed metrics in order to obtain bonuses (which are not normally legal in civil service.) In the past 20 years, poor decisions were common as the collective management has little or no business education and the target of right mail to the right house at the right time was never a metric. Giving huge discounts to mailers and not-for profits ate into profits. The Postal Service was originally intended to be a service to the public, entrusted with the official task of securing communications. It has since been a means to get Federal workers bonuses for loosing money, betraying the public's trust. No person in their right mind would buy into such a poorly managed company.
I'd suspect that the Royal Mail is no better managed and as such any investors would demand huge changes to how business like the model runs.
fyi, juujuuuujj, nothing is being "confiscated." Since the government of the UK is a form of representative democracy the English "public" effectively consented to privatize the Royal Mail when the government voted to do so. No one's crying over lost "publicly owned" assets; they just want better, cheaper mail service. Results from countries like Austria, Germany, and Belgium who privatized their mail service show that service remains "high quality," service expands, and they even turn a profit. Can you say win-win?
A profit for whom? Cheaper private mail, really? The private mail services you listed offer the exact same service, but at a higher price than public mail in other countries (visit their websites to check). Give me an example of a private mail service that's cheaper than well-run public mail. And private mail companies keep the profit that would otherwise go into the public budget. When you're the owner of something, rather than the tenant, it's a no-brainer that it won't cost you as much to use. And selling a revenue-generating asset that you've already paid for, so that someone else can lend it back to you, is idiotic. It only makes sense if you're a market fundamentalist.
Privatizing revenue-generating public utilities is a blatant sell-off without the express consent of the owner. You're right that representative democracy doesn't always require consent, which is why we need more referendums, Internet voting and direct-democracy to avoid such rip-offs.
Yea, juujuuuujj, cheaper. Privately run mail services are no longer subsidized by taxpayers; in other words money isn't being confiscated from citizens to support a service they may not use. Add up the total costs and the private mail is cheaper to run. Private industry in a competitive marketplace always runs more efficiently than a monopolized service run by government. The fact that they make a profit is evidence of improved efficiency. FYI, the mail service isn't given away for free to private companies; it's sold. Have a read of "Naked Economics" to improve your understanding of how markets work and why they are always more efficient than government at providing services.
How much in taxes do you pay for public mail? The mail generates its own revenue, if it's run well. Like in a private business, profits can be reinvested into the service, they can return to the owners (the budget), or unlike a private business, they can be used to drive prices down. Once you have the infrastructure, it's cheaper to be the owner than the tenant.
You seem to have stopped arguing that privatization of revenue generating assets without consent by the owners, is stealing, and a rip-off, so I won't press that point further. On your point that private industry is more competitive and efficient than government, look no further than privatized public utilities (listed above - water, electricity distribution, etc.) to see how an all-private market is perfectly happy with uncompetitive monopoly/oligopoly with high prices. In natural monopoly markets, or uncompetitive markets, it's often better to have public ownership.
P.S. Please take your "go eat a book" arguments elsewhere, I'm well acquainted with economic literature. Don't try to discredit your opponent - instead, listen to their arguments.
Is this science?
Oh well, at least it's good political discussion, so maybe I'll chime in.
The USPS is profitable -- sort of. The present drain is due to the money reserves required to be put into the under-funded retirement plans, catching up on what should have been taken care of long ago but is now required by law.
The USPS is currently assisted by regulations that limit competition for delivery of bulk and non-priority mail and for preferential air cargo rates.
The USPS is also burdened by the requirement to deliver to every address, no matter how unprofitable, and to deliver Monday through Saturday, which requires extra manpower.
A huge burden is the ill-concieved retirement and health plans that the USPS administrators agreed to years ago. (Why not, it's not their money.) Private competitors tend to not fall into that trap.
Hm... maybe it's not that interesting of a political discussion after all. Is there some way to get back to the science part of it?
I think the Royal mail is good, losing mail or slow mail is not really a big problem *(it does occur), post man come every weekday and Saturday with post
any document that is valuable can be sent 'special delivery' which costs more but is guaranteed to get there next day (costs extra for before 9am)
there are many delivery companies that operate in the UK, so you can send and receive parcels anyway you want
The service is considered good or acceptable
so not sure if it should be messed with
but i have no idea of the financial situation, many post offices have closed and only the larger or necessary ones operate