of collection, sorting, etc., are so large a part of the costs of carrying a letter, that the real cost between John o’ Groats and Land’s End does not differ from that between Hampstead and Highgate by as much as might at first sight appear, (2) that the charges in any case are very small; so that (3) the avoidance of the small degree of taxes and bounties which the present system implies is not worth the book-keeping expenses which differential charges would involve.  It should be obvious that these considerations apply to the railways with a greatly diminished force.  They might possibly justify what is known as the “zone” system of charges, i.e. uniform rates within certain narrow areas.  But the notion of uniform rates throughout Great Britain conjures up a vision of trains taking coal from South Wales to Scotland, and others taking coal from Scotland to South Wales, in accordance with the slightest preferences of the consumers, and without regard to the extra real cost involved, on a scale to which the “wastes of competition” afford no parallel.  It would in fact achieve the essential folly of “sending coals to Newcastle.”  These considerations, however, are not what interest the advocates of the postal principle.  They seem to recommend the obliteration or the confusion of the relations between price and cost as a superior ideal.  It is important to be clear what exactly this ideal involves.

It involves, in the first place, as the whole argument of this volume has gone to show, a less economical employment of our productive resources; they would be diverted to ends of less utility, and so produce less real wealth.  But this is not the worst.  There is plenty of waste and maladjustment in our economic system at the present time.  The desirable relation of price to marginal cost is but imperfectly attained.  The further departures from this relation, which would follow from any likely applications of the postal principle, might not matter in themselves so very much.  What is far more serious is that the criteria of efficiency would become blunted, and the clear aims of management would be confused in fog.  It is essential that every manager should be on the alert to eliminate waste and to improve efficiency, that he should be always trying to secure the best results; but how can he do this if he has no simple means of measuring what results are good and what are bad?  The measure which he has at present is that of price, cost and the resultant profit, and it would be fatal to take that away, unless an equally simple and more accurate measure could be substituted for it.