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The E-Sylum: Volume 12, Number 43, October 25, 2009, Article 18

IS BRITAIN'S ROYAL MINT FOR SALE?

Dick Johnson added these thoughts on a report this week that the British government is considering privatizing the Royal Mint. -Editor

Royal Mint logo With the cost of everything, it seems, going up in the world, it is prudent to cap rising costs or attempt to find ways to lower and control costs. It was with this in mind that Britain's Chief Secretary to the Treasury launched a study on July 3, 2008. Its report was published April 21st this year. Out of this study came a possible suggestion to privatize Britain's Royal Mint.

"Did I read you right? Sell off the Royal Mint?" you might say. Wanna buy a real MONEY making business? Own the mint?

The idea is not as far-fetched as it might sound at first. Even though private industry has to pay taxes, it more often than not can affect efficiencies that government organizations, encumbered with bureaucracies, cannot achieve. The cost of making money could, indeed, be reduced. After all a mint is a factory, and striking coins is a manufacturing process.

And that was the thrust of the British Treasury's study -- how to increase efficiencies. The UK government is dealing in vast sums of money. Even a small efficiency anywhere in the Treasury's widespread activities could save millions of pounds. That was even the name of the study -- Operational Efficiency Programe. Click on the URL below if you wish to read that 86-page report.

News was made this week as the employees of the Royal Mint, based in Llantrisant, Wales, began lobbying lawmakers October 21 to protest such a privatization plan.

Members of Unite [the union of Mint workers] will tell members of Parliament that the Mint, which according to its annual report paid a dividend of four million pounds to the government last year, should be kept in public hands, according to the news article.

This should come as no surprise, both from the human nature of employees' natural inertia, but also from the union's philosophy of protecting all of its members. One might expect under private control, less efficient employees would be dismissed. On the other hand, more efficient employees would be promoted and rewarded. Private industry constantly strives to lower costs, while doing the job at hand, better and faster. Achieving such a goal would be a valid reason for placing control of a mint in private hands.

We do not see, however, privatizing a mint -- any national mint -- coming about in the near future, or setting a trend for other countries' mints. But it would eliminate such irrational behavior as continuing to strike cents in the U.S. that cost 1.4 cents apiece, or five-cent nickels that cost 5.9 cents to make.

Here is this week's news story: U.K.'s Royal Mint Workers Protest Against Privatization Plans (www.bloomberg.com/apps/news?pid=20601102&sid=aAaMmxSg0lfY)

Here is the final report: Operational Efficiency Programme: final report (www.hm-treasury.gov.uk/d/oep_final_report_210409_pu728.pdf)

Wayne Homren, Editor

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