Royal Mail, the British postal service, has been privatized. Shares in the new company are selling like hotcakes.
The sale attracted individual investors by the thousands. Reuters reports Business Secretary Vince Cable telling a parliamentary committee that “my very rough estimate is that we've had about 700,000 applications and it's about seven times oversubscribed."
Thirty percent of the shares are to be sold to the public. The sale is expected to value the new firm at US$5.31 billion.
Contrary to free market economics where prices decrease with decreasing demand, USPS prices increase with decreasing demand. This is typical of wasteful operations run by government, where inordinate expense and inefficiency are built in.
This is the price people pay for centralized services without competition and monopolized by the establishment that never has and never will run things well. The government stands out as doing things by the most circuitous routes in the most costly way.
Maybe someone will notice that our social-democrat friends in the U.K. are seeing the light of the private enterprise for critical services. Some things should not be left up to government.