the visible hand
Royal Mail - recently announced record profits: to be part privatised
Royal Bank of Scotland - recently announced record losses: part nationalised
The call to part (for now) privatise royal mail seems to be based entirely on its need to improve efficiency and that privatisation (in part or in whole) is the only way to do this. However, as has been seen in the privatisations of the 80’s & 90’s, the biggest increases in efficiency come not after but before public companies are actually privatised - in order to make them attractive to capital in the first place - this empirical observation immediately pulls the rug away from the claims that the only solution is privatisation, and indeed the record profits recently announced by the royal mail is testament to that dynamic which is already at work.
If it is shown that the necessary know how and expertise can be harnassed without private ownership, we will then be told that the actual finance to achieve this can only be provided by private capital, but again this claim falls at the first hurdle when it is shown that the royal mail has spent only half of a £1.2bn finance facility available to it that was provided by the state two years ago for these very purposes (again showing that large amount of efficiencies, funded by the taxpyaer, are achieved in the run up to and in preparation for privatisation and not through actual privatisation itself - this is shown by the fact that for the first time in 20 years all 4 of royal mail’s main operations were profitable) meaning at present they have access to a further £600m of finance - an amount which would no doubt dwarf whatevever money that would be brought in by selling a 30% stake in the organisation even in the rudest of financial climates, let alone in the first phase of the biggest downturn in a century. Adam Crozier the chief executive tries to cloud this issue by saying they need equity capital rather than debt capital, but this is a weak argument which serves to attract attention away from the fact that both the expertise and finance are available without the necessity of private sector ownership
A secondary claim that seems to be being made about the benefit of privatisation relates to the large pension deficit that the royal mail has - but given that most of that liability will be ring fenced and taken on by the taxpayer in order to make it attractive to capital this also seems to be another issue whose sole purpose is to cloud debate
Increased efficiency however, for the most part and whether delivered in public or private hands, results in workers and service users being screwed more and an increased surplus being appropriated by either the state or private capital so it’s not an ideal or an end in itself, however the basic point is that privatisation is neither a sufficient or even necessary condition to achieve more ‘efficiency’. This lie needs to be expossed before any kind of honest debate can be had about the continuing folly of placing more and more public services into private hands and making them increasingly subject to the impersonal forces of the market while prioritising private profit over social needs. Especially at at time when it’s now clear to even the most hardened market liberals that the belief that a mixture of self interest and competition ensures the best outcome for society as a whole has run its course - self interest and a competition, which by it’s very nature leads to either a huge waste of societal resources or a monopoly situation - neither of which benefits society, got us all into this mess so it’s highly unlikely it stands a hope in hell’s chance of getting us out of it