LONG before politicians and others in the UK began crowing about the benefits of public-private partnerships, Jersey had developed its own models to combine the virtues of free enterprise and government involvement.

Organisations such as Jersey Electricity and the Waterworks Company have, for as long as most people can remember, been part-owned by the States. Jersey Telecom and Jersey Post, meanwhile, occupy another niche – they are in public ownership but corporatised, enabling them to access finance and invest more effectively.

States holdings in utilities and the structures applying to Telecom and the postal service both have respectable track records, but the economic background is changing and new challenges have arisen. Arrangements for the utilities might remain secure, but Telecom is already reeling under new pressures and there are signs that Jersey Post may suffer a similar fate.

So what has changed so radically in the economic landscape? It is the seemingly universal mantra that all competition is good competition and that it should be therefore encouraged in as many sectors as possible.

The organisation responsible for spurring competition – but not the underlying political philosophy – is the Jersey Competition Regulatory Authority.

This monopoly-slaying body has recommended that licences should be given to two new operators to allow them to compete with Jersey Post for the delivery of packages and large letters sent by the fulfilment industry. This could mean that a corporatised public entity could cease making millions and run into the red.

Theory has it that more competition drives down prices and prevents market exploitation. Practice, on the other hand, tends to support the idea that no community of 90,000 souls can be expected to provide the perfect open market conditions in which co-operation can be relied upon to be a force for good.

Even if it is accepted that the present difficulties of Telecom – which have included a major redundancy programme – must be attributed to factors more complex than the introduction of competition, there is something deeply paradoxical about the Jersey Post case.

At present, Islanders benefit – and benefit to a very considerable extent – from the portion of the service’s profits remitted to the public purse. That money will be lost if the service ceases to be profitable, though, it is presumably hypothesised, the public will ultimately gain from the effects of competition.

It is just about plausible that this will be possible in the long term, but the calculations involved in assessing plausibility could only be difficult in the extreme. Are we absolutely sure that free-market dogma and a law that ties the JCRA’s hands is not triumphing over plain common sense?