For the first time in Royal Mail’s long history, stretching back to the 1500s, its owner will be based overseas. Daniel Kretinsky, a Czech billionaire, has acquired ownership over Royal Mail after a £3.6bn takeover. Royal Mail has been performing badly for years now after it was “privatized” in 2013. The company has suffered heavy financial losses as mountains of customers complain that they do not regularly receive letters like important medical documents or crucial legal documents on time.

Onlookers and stakeholders can see with sublime clarity that the company is headed towards dire straits unless major change is gambled on. Individuals inclined towards the socialist worldview blame privatization, but their cause benefits from the public not wishing to dig a bit deeper to understand Royal Mail’s situation; this market is not what it seems.

For most, privatization conjures an image of fat, avaricious capitalists grabbing companies, obtaining full and unopposed control of all their resources, grinding every penny from them before moving on to the next victim. It is a picture that aids statists who seek to take control of the private economy for “the people’s” benefit. Actual details scupper much of this picture.

The government has retained what they are calling a “Golden Share.” This gives them critical veto power over decisions like relocating the headquarters outside of the United Kingdom, changing the tax residency to abroad, and the Universal Service Obligation. The Universal Service Obligation is a legal obligation to guarantee the delivery of letters and parcels six days a week across the United Kingdom at a uniform price. Included in the deal were provisions to safeguard existing employee rights like pay, working conditions, and pensions. The dog is still on a leash, and yet they would have you believe it frolics freely.

A nationalistic sentiment infests this deal as the government seeks to ensure the public that Britain will be maintaining British heritage within this widely appreciated “public good.” This translates into the government leveraging a huge say in key decisions of the company. Since most statists believe the government reflects the people, the government effectively owning the company equates to the people owning it. There is no coherent idea of ownership based on this idea and it is one of many reasons why it is more than probable that the new owners will not be able to work the miracle that the government claims.

The government’s deal with Kretinsky effectively imposes a strait jacket on the company’s owners. The government’s expectation is that the new owners will be able to rearrange resources, change how Royal Mail operates, and work some fancy business voodoo so the government can claim a political victory for the work of others. This is an utter fantasy. A normal company making significant losses akin to Royal Mail would have to fundamentally change the way it operates, but the deal takes away so much flexibility for the new owner to right the ship. Prices in a market are signals. On a basic level, the huge financial losses incurred are a signal to the owners that some of their resources are being badly misallocated. Prices and double-entry bookkeeping show where the misallocation is, but the deal renders these signals almost useless.

For example, it is entirely possible that the Universal Service Obligation is causing the financial losses due to Royal Mail promising a service that was profitable when they were bringing in more revenue because of factors like lesser competition. However, the industry is evolving. There are now multiple competitors that provide similar services and take away revenue that previously allowed for the Universal Service Obligation. The Universal Service Obligation may need to change but the government, incentivized by fickle public opinion instead of economic realities, has chosen to attempt to have its cake and eat it. This is just an example of what could be causing Royal Mail’s losses, but somewhere in the bookkeeping there will be a price signal telling the owners exactly what is wrong. This is a worrying example of how the government breaks the market system by pursuing its own agenda with the threat of the use of force.

Royal Mail acts as a microcosm of the stagnation of the United Kingdom. It would be unwise to place money on Royal Mail experiencing a miraculous recovery under these new owners and the reason is obvious for those who wish to see. There is a culture infesting the United Kingdom. It is a culture that tells inhabitants that the government is a vehicle to achieve whatever aim strikes someone on any given day.

This culture sees no contradiction with simultaneously seeking profitability for Royal Mail whilst legally restricting Royal Mail to zero fundamental changes to its operations. It infects every crevice of society. Society wants more houses built but only when the ever-increasing hoops have been jumped through, each of which are entirely within the loop maker’s own interest and make building the house vastly more expensive. Society wants higher paying jobs but only if sickness pay, maternity pay, and a host of other benefits are provided. The market has been thoroughly rejected in favor of phony stakeholder statism. The government is the people, and thus it can do whatever it wants. Having your cake and eating it is no longer an impossibility. The siren’s sing and the people are hypnotized but something disastrous awaits behind this illusion.

An inordinate amount of time has been taken up discussing the nationality of the owners. British assets being sold abroad is how the action has been framed. That’s not the real problem. The real problem the majority have is that there isn’t a British alternative; but why isn’t there. Incentives for growth have been stripped away. Why set up a business if it costs tens of thousands just to get started? A disregard for a coherent understanding of private property rights has led to a culture where individuals, down to the most trivial issue, feel they can use the levers of the state, or create entirely new levers, to obtain what they want through the threat of force despite no claim to ownership over the property affected. If you do not own the land down your street, you cannot stop someone building a house on it through the threat of government force because it may affect your own property’s value. This belief that you can do so is the root cause of the United Kingdom’s stagnation.

Royal Mail is just another example. This culture is completely strangling the creativity, the entrepreneurial spirit that drives growth, achieves a higher living standards, and spending more time doing the things that make life worth living. Thinkers like Ludwig von Mises and Murray Rothbard outline a coherent, understandable and growth inducing thesis on private property rights. Instead of learning about this, those who seek political office learn how to use the state to achieve their ends rather than questioning whether they should.

For those who are Jurassic Park fans, a slightly altered quote from Dr. Ian Malcolm that encapsulates the obstacles politicians put in the road towards the advancement of society may come to mind: “Your politicians were so preoccupied with whether or not they could, they didn’t stop to think if they should.”