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Making a profit costs money!

The Dutch postal company ‘Post.nl’ has recently changed the price of a stamp needed to send a letter from € 0.50 to € 0.54, an increase of 8 percent. The company will surely have its reasons for such a rise in price?

 

Did the quality of their service perhaps drastically improve? As 'expert by experience' (publisher) - I pay Post.nl about € 20,000 a year to deliver my mail - I can say that that is not the case. In recent years the quality of the postal service has steadily been getting worse.

 

Maybe the employees of Post.nl received higher wages?

No way.

Post.nl is replacing the more expensive workers by people who get paid minimum wages.

 

Post.nl´s net profit over 2011 was € 213 million. The policy of the company is that annually at least € 150 million dividend goes to the shareholders.

 

Post.nl forms a good example of how things go in privatized companies: either the quality of the service or the product goes down, the cost of labor is cut down while shareholders are kept as happy as possible.

 

Making profit does cost money! And profit is what privatized companies want. Had it then been better when companies like Post.nl had not be privatized? Do we want such companies to remain in state hands?

No.

Economic activity is not a task for the state, but for entrepreneurs and their employees: they have experience, expertise and innovative capacity, in other words, they have the qualities to meet the needs of consumers as well as possible.

 

But setting limits to the economy is a task of the state.

At what limits can we thereby think of? These include limits in the area of working time and working hours, living standards and associated salary level. Or rules that make sure that the environmental damage caused by economic activity has to be included in the price of products.

 

The democratic state should form yet  another 'boundary´ to keep economic activity in its own field, namely that companies are not privately owned. Without greedy owners/shareholders on his back, the entrepreneur can focus entirely on the quality of its organization and the quality of its products and therefore on the needs of the end user. Moreover, he can work on the basis of a sustainable, long-term strategy.

 

The fact that the owner/shareholder, solely based on his ownership, is able to demand that a company is not focused on the needs of the consumer but focuses on the needs of the owner/shareholder, gives a boost to all economic activity that are based on self-interest.

The modern stamp doesn´t have to be licked anymore, but why should we swallow the boundlessness of the pursuit of self-interest in modern economy?

 

John Hogervorst


 |  2013 04 23  |  Permalink  |  Share

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