Mr Chakrabortty applies his well known economic perspicacity to the Royal Mail:

So this is how the Royal Mail ends: killed by lying politicians, lousy managers and ruthless moneymen

Aditya Chakrabortty

Barring the occasional rhetorical twist any one of us can predict how the other 1200 words go.

Sigh.

Now given that Royal Mail is politically, government, influenced we’re not going to argue that the issue has been perfectly managed. But the one bit - a really rather important bit we feel - that Aditya doesn’t remark upon is that all mail systems have exactly this same problem. We out here are simply sending fewer letters.

For Royal Mail, and from different data series so perhaps not entirely comparable, some 20 billion or so in 2004, 8 billion in 2021. No, the collapse did not come as a result of privatisation. Any chart wouldn’t, in fact, be able to visually spot the date of that privatisation. Rather, it tracks the rollout of broadband internet and then smartphones. The background technology has changed.

This produces a vast fiscal or economic problem. The cost of Royal Mail is near entirely the fixed cost of the network. The marginal cost of another letter is as close to zero as makes no difference. That also means that the marginal revenue loss of one less letter feeds near entirely through to the bottom line - the costs of the network have not fallen but revenue has.

Actual serious people have been chewing over this. Perhaps the overhead cost can be reduced by reducing that universal service obligation? Maybe. Or possibly the cost for each letter should triple to cover the lower volume. Maybe. Or some vast subsidy to retain the system. Maybe.

But this problem is not a feature of Royal Mail alone. Every postal system is facing exactly the same problem. It’s therefore not a point of the ownership or management structure of Royal Mail. Which is, sadly, exactly the one point which Mr. Chakrabortty does not examine nor explain, instead blaming everything upon the capitalists and privatisation and, and etc.

Which is a pity. It would have been possible to find out about this if he’d simply read his own newspaper. This is a good explainer for example. At which point we think someone should give Aditya a prize. Imagine, a Guardian column which could be factually improved merely by reading The Guardian?