Markets, gone postal


11:46 am - January 21st 2008

by DonaldS    


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A trip to the postbox to return the execrable Black Dahlia to LoveFilm reminded me why marketizing public services will always fail. It’s that little slot on there that tells me when the next pickup’s due. Today it read SAT. Those Next Collection signs are very useful. It wasn’t so long ago that they were trustworthy. Not any more: they’re often days out of date at my local box.

The reason’s simple: whoever changes the signs doesn’t have the incentive to bother. Nobody’s checking every little detail of his job – nobody could. And these little extras – what we used to call public service – aren’t Big Picture stuff. (You could have said the same about clean hospital toilets until a couple of years back.) By turning my postman from a public servant into a rational economic actor, we’ve destroyed the small parts of his job that used to connect him with our lives in all their complexity. Marketization can only put incentives (targets, bonuses, competition) in place for a proportion of what he does, or did. The rest is deemed worthless, history. Or it’s left up to his own integrity, which we still expect him to display in his new daily life being pushed around by capitalists.

Now I’m not saying that I oppose the market running public goods; nor do I know whether this ‘public servant’ ever really existed, or even if s/he did, whether we could re-energize the corpse. But deciding where markets can be successful needs to be an empirical judgement: they appear to be better at running airlines than train networks; better at holiday camps than prisons.

And marketization isn’t a process we should be celebrating. When markets need to take over, it’s a sign of human failure, a necessary second-best option, not something anyone should be proud of, Left or Right. Smith, like Worstall on a good day, teaches us that self-interest can be useful, not admirable.

Also published here.

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About the author
Donald is a regular contributor to Liberal Conspiracy. He is a travel journalist, editor, author and copywriter. In the wake of the 2005 General Election, he co-founded and edited The Sharpener for a couple of years. He writes the occasional book or newspaper article for money, as well as sharing his thoughts here for free. Also at: hackneye donaldstrachan.com
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Reader comments


The reason we shouldn’t let the market run public services, is that many of these public services aren’t profitable in the market sense. The privatised Royal Mail struggles to make a profit, where once they were run as a subsidised service. So, they make cuts, not in their shareholder dividends or executive salaries, but in the service they provide to the consumer and the salaries they pay to the people who actually run their business.

In the case of your anonymous sign changer, where once he was a permanent employee with a long-term future, job security and a reasonable pension to motivate him and give him pride in his work, he is now more than likely any one of a number of low-paid contractors with no long-term prospects, who come and go and have little invested in their jobs.

And we should be blaming those people (mostly on the Right) from whence this situation arose, but also those in the Centre-Left who compounded the problem.

I’m sceptical of the Times prison piece, given data and reports that I’ve seen on private and public prisons in the past (commercially confidential so can’t say more, annoyingly – but in the unlikely-I-hope event that I were to find myself in any kind of prison, based on what I’ve seen I’d rather be in a private sector one than a public sector one at the same category). This makes me think the government’s point about lack of comparability between the different metrics may actually not be a cop-out.

The PO was always profitable and never subsidised – the problem now is that, because we have so many other means of communication, its revenues are falling and therefore it needs to either cut costs or *start* being subsidised. And I doubt that starting to subsidise the PO would be a particularly redistributive move (for the mail service at least – there might be more of an argument for local branches) – IMX the wealthy and receive more letters, packages, etc than the poor.

If it wasn’t for eBay and Lovefilm and other net-based stuff the P Off would have died years ago; I therefore don’t think that new communication is as cut and dried a killer of the Royal Mail as some people paint it.

3. True Jennie, but to put an anecdotal swing on things…. my grandparents used to write letters to everyone and geneology research, etc, etc, frequently. Now they email everyone, use MSN and have even started to do “e-cards”.

With bills becoming paperless and people moving to faster and more convinient communication where it is available, I really doubt that the likes of lovefilm and internet delivery services (which are best served by the post office/royal mail) can fill the gap that’s been made. I know that 10 years ago if I needed to send something to someone I would have had no second thoughts about finding a post box, now if getting involved in a consultation involves me doing more than writing an email I get frustrated. Is this a particularly minority view?

A trip to the postbox to return the execrable Black Dahlia to LoveFilm reminded me why marketizing public services will always fail.

Gas, electricity, telecoms…were they all failures?

By turning my postman from a public servant into a rational economic actor…

My own experience of working for the Royal Mail suggests that I was neither more nor less public spirited than when I was working for ruthless private investors.

which leads to:

When markets need to take over, it’s a sign of human failure, a necessary second-best option, not something anyone should be proud of, Left or Right. Smith, like Worstall on a good day, teaches us that self-interest can be useful, not admirable.

People do not start or stop being self interested depending whether they are employed by the state, private individuals, or themselves. The most obvious difference between the public sector and the private sector is that the private sector tends to exploit self-interest, and the public sector does not.

That is not a reason to expect the public sector to work better.

Royal Mail is not privatised ! The Govt is the sole “shareholder” and appoints the top people. The lack of performance from Royal Mail in large part is due to the chronic lack of investment over many years. this is now being corrected.

There was a great opportunity recently when Allan Leighton wanted to give the people who work in Royal Mail a real share in the business and their future. Instead of running with this and starting a debate on different models of ownership we had unthinking opposition. The prospect of saying RM should be a fully employee owned company was missed as was the debate on the mix of ownership, eg employees 40%, Govt 30% and customers 30% we had blanket opposition.

The vast majority of RM employees are full time, permanent & long term , still with a very good pension scheme and in a company with a policy of no compulsory redundancies.

On the box tab, the internal measure of a collection box being cleared is now a barcode system, when the mail is collected a barcode is read and on return to the collection centre the time the box was cleared is shown. This drives a much better service however is not visible as the barcode is inside the door. The tab outside used to be used to check if a box had been cleared that day. Now is an indicator to the poster and should always be changed and in most of the country is.

The poor attitude is driven by a lack of focus on customers, a lack of pride and sadly a lack of engagement and a feeling of alienation. The market is not an automatic answer to this though nor is state ownership. The ownership of the organisation does not shape the personality, rather the environment internally and in which the organisation operates. Capitalists do not push people around, it is fellow employees in more powerful positions as managers, union reps or based on personality.

Unfortunately too many public servants operate out of their own self interest rather than the interests of the wider public. The behaviour of the CWU is an example of a conservative, defensive organisation. To keep to the RM theme, can you pick up an item from your delivery office or have it redelivered when you would want or when people are used to be at work to do the traditional delivery ?

Interesting recognition that the market is better at airplanes and holiday camps rather than trains and prisons as the difference is between where there is a real choice and where not. The level of choice people have and spending their own money.Most rail travel at peak time is probably paid for by the employer and prisoners don’t get much choice!

The postal system is now a competative market for Business posters however for posters through pillar boxes & the delivery side there is still in effect no choice. The challenge for us could be how to create a organisation that competes and is an example of the sort of large organisation we would want. Increasing the sense of ownership, enjoyment and self management from the people who work there. Ironically this is often the motivation for being on a delivery, once out the door you are no longer supervised, and for many the best part of the job is the relationship with customers, connecting to the complexity of their daily life.


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