Royal Mail - IPO

[Dave2002]

The Royal Mail IPO seems like yet another way to transfer money from the poor to the richer. Those people who were not so greedy as to opt for more than £10k's worth, were allocated just under £750, with an immediate benefit of around £200. Poorer people who did not have the money to "invest" would not have benefited from such a windfall.

Where does the money come from? Moreover, why would the institutions want to buy shares in Royal Mail anyway? My understanding is that the government will get a few billion from the sale, but is still responsible for some remnants of the pension fund, so the net effect is a loss to the taxpayer - or did I get that wrong?

[ahinton]

The Royal Mail IPO seems like yet another way to transfer money from the poor to the richer. Those people who were not so greedy as to opt for more than £10k's worth, were allocated just under £750, with an immediate benefit of around £200. Poorer people who did not have the money to "invest" would not have benefited from such a windfall.

I happen to know two people who were undoubtedly poor enough not to be able to afford to invest in this and who each therefore borrowed £750 in order to hope to make a killing; I have little doubt that there will have been plenty more such instances.

Where does the money come from? Moreover, why would the institutions want to buy shares in Royal Mail anyway? My understanding is that the government will get a few billion from the sale, but is still responsible for some remnants of the pension fund, so the net effect is a loss to the taxpayer - or did I get that wrong?

I have to admit that I am puzzled as to why this particular sale has gone ahead, given especially that the Post Office - upon which Royal Mail has been and is likely to continue to remain heavily dependent - is not up for sale and looks far less likely to be so in the foreseeable future; that said, I cannot answer your questions because I don't have the answers.

[Eine Alpensinfonie]

Governments privatise for opposing reasons. Sometimes the excuse is that the industry in question is running at a loss and therefore costs the taxpayer. But when the taxpayer is raking it in via profitable industries, such as oil, gas, electricity and the Royal Mail, a much smaller amount is returned to the public purse after privatisation.

[Dave2002]

Presumably the initial share price has to hold up for while, as otherwise no-one will sell on, unless there's spectacularly good or bad news. Maybe Vince Cable was right. The price is not only holding up, but actually rising. Raises issues about whether one should believe in a free market economy, whether shares should be treated like other goods, and whether private "ownership" is inherently better than having services run by public/goverment appointed bodies.

A friend recently pointed out that in many ways the service on the West Coast Main Line improved dramatically once Virgin took it over. This seems to have been because of better management, and investment.

Why is it that things which are run by public/government organisations are unable to get decent management or investment? Why do we still have remnants of poor management and operations in some parts of the UK, for example almost any cross country train service north of Crewe? Nobody seems to care - not London centric, so just let everyone in some regions put up with poor to atrocious service.

[Serial_Apologist]

Presumably the initial share price has to hold up for while, as otherwise no-one will sell on, unless there's spectacularly good or bad news. Maybe Vince Cable was right. The price is not only holding up, but actually rising. Raises issues about whether one should believe in a free market economy, whether shares should be treated like other goods, and whether private "ownership" is inherently better than having services run by public/goverment appointed bodies.

A friend recently pointed out that in many ways the service on the West Coast Main Line improved dramatically once Virgin took it over. This seems to have been because of better management, and investment.

Why is it that things which are run by public/government organisations are unable to get decent management or investment? Why do we still have remnants of poor management and operations in some parts of the UK, for example almost any cross country train service north of Crewe? Nobody seems to care - not London centric, so just let everyone in some regions put up with poor to atrocious service.

In my opinion, because nationalisation was always envisasged in a top-down, diluted stalinist way, by its Fabian and other advocates, post WW2, applied to loss-making private sectors previously badly managed and/or co-ordinated as a last resort because of their essential infrastructural necessity, treated as adjuncts to private-owned domination of the system as a whole, and managed by ex private sector bosses or civil servants wedded to mixed economic models weighted to competition over planning. We shouldn't overlook the salaries paid to these bosses, the lifelong compensation paid to the previous owners, and the "buying off" of the (willing) trade union bureaucracy to the effect that worker involvement let alone control or say in management was not part of the deal, only wages and conditions. Any initial priode generated by the fact of common ownership was quickly dissipated in general disillusionment at the evident lack of involvement by rank and file employees who could see no difference from working for private bosses - a problem probably exacerbated by issues of scale, bureaucracy and depersonalisation only to be displaced by the coming of the consumer society and de-communalisation of the individual, who at least had once felt part of a community of fraternal and sororal solidarity, but was now told that satisfaction lay in status and unsustainable acquisition, and only later that s/he had priced himself/herself out of a job. By which time management consultancy and talk of levelled de-hierarchical company structures deriving from Maslow and other theorists of personal growth so-called that would have made more sense under bottom-up accountable nationalisation were being applied to slimmed down, rationalised companies and an underclass on permanent wait was ready for exploitation and demonisation for personifying "the selfish society", religions of all sorts were being brought back to tell us how sinful and in need of firm leadership by people obviously born to lead ('cos how otherwise did they get to where they are?) we all really were.

Thanks.

Rant over.

[ahinton]

In my opinion, because nationalisation was always envisasged in a top-down, diluted stalinist way, by its Fabian and other advocates, post WW2, applied to loss-making private sectors previously badly managed and/or co-ordinated as a last resort because of their essential infrastructural necessity, treated as adjuncts to private-owned domination of the system as a whole, and managed by ex private sector bosses or civil servants wedded to mixed economic models weighted to competition over planning. We shouldn't overlook the salaries paid to these bosses, the lifelong compensation paid to the previous owners, and the "buying off" of the (willing) trade union bureaucracy to the effect that worker involvement let alone control or say in management was not part of the deal, only wages and conditions. Any initial priode generated by the fact of common ownership was quickly dissipated in general disillusionment at the evident lack of involvement by rank and file employees who could see no difference from working for private bosses - a problem probably exacerbated by issues of scale, bureaucracy and depersonalisation only to be displaced by the coming of the consumer society and de-communalisation of the individual, who at least had once felt part of a community of fraternal and sororal solidarity, but was now told that satisfaction lay in status and unsustainable acquisition, and only later that s/he had priced himself/herself out of a job. By which time management consultancy and talk of levelled de-hierarchical company structures deriving from Maslow and other theorists of personal growth so-called that would have made more sense under bottom-up accountable nationalisation were being applied to slimmed down, rationalised companies and an underclass on permanent wait was ready for exploitation and demonisation for personifying "the selfish society", religions of all sorts were being brought back to tell us how sinful and in need of firm leadership by people obviously born to lead ('cos how otherwise did they get to where they are?) we all really were.

Thanks.

Rant over.

Explanations and excuses are, however, not by definition synonymous. It has long puzzled me that state-owned / state-run busineses are so often perceived to be less efficient and productive for the general benefit of those for whom they exist than private ones although, of course, not all of them have always been such and the perception is itself too simplistic in any case. I suppose that some of it's down to internal motivation but, again, it would be over-simplistic to try to put it all down to that. I fear that what we may now be staring in the face is the possibility that both that sense of "common ownership" (which is still ownership, after all) and that desire for status and unsustainable personal acquisition are beginning to seem as untenable as one another. The entire notion of "ownership" of a business / public service / call it what you will does not of itself by definition predetermine how successful that business might be in generating profits even when all such profits are reinvested in further employment to meet expansion arising from such success; failure and/or unwillingness to accept that fact, however, encourages the narrow-minded view that public sector businesses are somehow bad and privately owned ones are good which, again, is far too simplistic and also misleading. State business that make a loss because they're incapable of making a profit however efficiently they're run (if indeed there are any that could justly be so described) will never expand from the inside to enable the improvement and development the services that they offer so they become dependent upon ever more injection from taxpayers, which means that, when the economy's in bad shape and unemployment is high, they become vulnerable because, in such times, the tax take falls so there's not the available taxpayer funds that there would be when things are better.

I suppose that my only concern about the viability of state-run, state-owned businesses centres around whether and to what extent they can attract and incentivise the right kinds of management to enable their growth.

[Serial_Apologist]

I fear that what we may now be stgaring in the face is the possibility that both that sense of "common ownership" (which is still ownership, after all) and that desire for status and unsustainable personal acquisition are beginning to seem as untenable as one another. The entire notion of "ownership" of a business / public service / call it what you will does not of itself by definition predetermine how successful that business might be in generating profits even when all such profits are reinvested in further employment to meet expansion arising from such success;

I don't happen to believe that motivation can be set aside from considerations of what we mean when we talk of "succcess", and whether or not success can be considered in terms of isolated units of production and distribution in perpetual competition over scarcifying resources and with one-another: the system is wasteful insofar as multiply duplicative of decisionmaking processes, and so we are not talking to the exclusion of surpluses but rather of how a process of decisionmaking can be decentralised out from multiple boardrooms to the general population, and how to include all in that process according to needs and unacknowledged means. The only really successful trickle down in this society has been the internalised capacity of each social layer for keeping the next one down the ladder under control while at the same time looking up aspirationally and longingly to the next one up for validation. Alternatives that have been tried and shown to work have had the unfortunate luck to be withdrawn by short-term funding requirements or shortened lead times on targets and completions which fail to take account of how long it takes to turn a long-neglected community or class of people around and re-incentivise them through detailed involvement.

failure and/or unwillingness to accept that fact, however, encourages the narrow-minded view that public sector businesses are somehow bad and privately owned ones are good which, again, is far too simplistic and also misleading. State business that make a loss because they're incapable of making a profit however efficiently they're run (if indeed there are any that could justly be so described) will never expand from the inside to enable the improvement and development the services that they offer so they become dependent upon ever more injection from taxpayers, which means that, when the economy's in bad shape and unemployment is high, they become vulnerable because, in such times, the tax take falls so there's not the available taxpayer funds that there would be when things are better.

Well this in part is due to the fact that an economy based on competition and monopoly is prone to periodical overproduction relative to the capacity of its population as a whole to absorb its product. A planned economy - which is not to say bureaucratic, Soviet-style or Fabian mixed-economy-style centralised planning, but bottom-up, what ordinary people want, primordially and essential needs-meeting and then we can talk about trinkets, (do they really want tatty obsolescent rubbish?), would come about as a result of mass discussions, interlinked workplace and community meetings, election of bosses and representatives.

I suppose that my only concern about the viability of state-run, state-owned businesses centres around whether and to what extent they can attract and incentivise the right kinds of management to enable their growth.

Well there are plenty of people who would be willing to manage and lead without the need to take far more of their share than any economy can morally or materially sustain, or bully or hoodwink the general public.

[ahinton]

Well there are plenty of people who would be willing to manage and lead without the need to take far more of their share than any economy can morally or materially sustain, or bully or hoodwink the general public.

Do you really think that there are plenty such qualified, experienced and enterprising people willing to do this in state industries when they can be paid far more else where? I daresay that there might be some, but not so very many, I imagine...

[Serial_Apologist]

Do you really think that there are plenty such qualified, experienced and enterprising people willing to do this in state industries when they can be paid far more else where? I daresay that there might be some, but not so very many, I imagine...

Well I honestly would think so, based on growing feelings at large about those who live on colossal salaries in multimillion mansions whose price hikes are setting house prices as a whole at unaffordable levels; people who are amongst those or have friends who in large part caused or exacerbated the economic global crisis and now threaten to quite any country overtaxing them!

I have to go now...

[Anna]

To be honest, if I'd thought of it, I would have had a punt of £750 on Royal Mail shares to get a return of around £250. Who wouldn't?
Would have paid for my 8.3% increaae in fuel bills ....

[teamsaint]

The idea that there is a group of few ultra talented people, already working in the private sector on stratospheric salaries who are the only ones capable of properly running a big business in the public interest is of course dangerous self serving nonsense.
There is a lot of talent out there, most of it unrecognised.

[ahinton]

The idea that there is a group of few ultra talented people, already working in the private sector on stratospheric salaries who are the only ones capable of properly running a big business in the public interest is of course dangerous self serving nonsense.
There is a lot of talent out there, most of it unrecognised.

Well, I didn't suggest that such talent wasn't out there - nor indeed would I; I just wondered if most of it would be prepared to sacrifice loadsodallars to use it in the public sector, that's all.

[teamsaint]

Well, I didn't suggest that such talent wasn't out there - nor indeed would I; I just wondered if most of it would be prepared to sacrifice loadsodallars to use it in the public sector, that's all.

Not that many of us prepared to undersell ourselves, AH, so fair comment.

Still plenty of takers for well paid public sector jobs though !

[Serial_Apologist]

To be honest, if I'd thought of it, I would have had a punt of £750 on Royal Mail shares to get a return of around £250. Who wouldn't?
Would have paid for my 8.3% increaae in fuel bills ....

Which just goes to show in what ways the inherent instabilities of the system we live and labour under, can help shape attitudes and expectations.

I think two things about this matter of supposed ingrained greed in human nature:

(1) I would argue that the instability abovementioned is deeply embedded in the collective working class consciousness throughout the world, such that, knowing deep-down that good times are not likely to last, an attitude pertains of make haste while the sun shines, grab as much of that portion of the cake as one can, by any means, because we know ultimately the system is loaded to benefit the rich, and that will never change, for all the talk of "trickle down";

(2) Consumerism was extended into the pockets of working class people on a tide of ideological manipulation that conveyed fashion, unsustainable product and eligibility to the fulfilled society as synonymous and mutually self-reinforcing, provided one did not ask too many questions or pose too many alternative lifestyle options not involving mental enslavement to the market ethos. Then, when times were once again bad - for reasons people were urged to ignore as "extremist propaganda" - we could all be blamed for "pricing ourselves out of jobs", now of course outsourced to the so-called "developing world".

Just as well religion is on hand to offer better explanations, isn't it??!! Apparently fundamentalist religion is growing fastest of all!!!