United States postal rates have gone up again, from $0.41 to $0.42. One common justification for the rise is that gas prices and a slumping economy are causing the US Postal Service to operate at a huge loss and they need increased revenue. A net loss of $707m was reported by USPS for the fiscal second quarter. It's not the least bit surprising to see a government-run "business" fail miserably and require propping up by taxpayer money.
But so what? Why does this one cent increase really matter in the grand scheme? What's so special about yet another inefficient government program? My answer is that the increase itself is meaningless and just highlights a broader issue.
Look to the flourishing of private shippers like UPS and FedEx, and you'll see it. There is no reason for the government to be in the mail business. It is painfully obvious that private companies could be delivering mail better, faster and cheaper.
Most readers of this blog will recognize that the fundamental argument against the USPS is the same argument that exists against virtually all government programs. Namely, that "the only proper functions of a government are: the police, to protect you from criminals; the army, to protect you from foreign invaders; and the courts, to protect your property and contracts from breach or fraud by others, to settle disputes by rational rules, according to objective law." (Galt’s Speech, For the New Intellectual, 183 - via Ayn Rand Lexicon.)
Rather than focus on that most fundamental of issues, I'm instead interested in why people try so hard to evade their way around it. Playing to the pragmatic view of the world held by so many, why do people continue to justify the existence of government monopolies despite overwhelming evidence that they don't work, and that private enterprise would do it better?
A common argument in support of supposedly indispensable public services like roads and bridges is that some enterprises are too important or too complex to be handled by private entities. If you get into a discussion about privatizing something, or you state what the only proper functions of government are (see above), people often respond with the stock question: "Oh yeah? Well what about roads?"
The difficulty here is that trying to imagine a "what if?" scenario where all roads are private takes a lot of work, and our current system of roads is so complex that privatizing it nearly presupposes the existence of an ideal capitalist system. I've thought about it before and I can't come up with a good and short response, primarily because I have no idea how it would actually work in the day-to-day frame of reference that the questioner would be thinking of (namely, a mixed economy). I'm sure it would work, simply because it would have to, and because in this ideal world, free men would be able to figure it out. That's not a very effective answer when you're trying to persuade someone of not only the morality, but also the practicality of a free market. In my experience, the "what about the roads?" question is the free market analog to the "lifeboat question" in a discussion of rational self-interest.
Mail delivery is a different animal, however. It takes very little imagination to extend the model of private shippers to the delivery of "regular mail," even in today's mixed economy. In fact, the entire concept of "regular mail" would no longer exist because we'd be paying FedEx $0.25 per item of "1st class" or letter-sized mail (note the price decrease!). Or we'd be on a monthly plan, with a certain number of letters allowed, and a "per item premium" charged if we go over the limit (think cellphone plans). We'd have regular pickups scheduled based on usage, with the ability to request an emergency pickup if needed. In order to handle pickups from so many locations (rather than only drop-boxes and businesses) companies like UPS and FedEx would innovate and come up with procedures and products we can't even dream of right now. It would be awesome. I get excited just thinking about entrepreneurs being let loose, free to exploit this new market.
And think of the side benefits. Cheap overnight delivery of letters, tracking numbers, online tracking, emailed delivery notification... who knows what will be created? My guess is that the amount of junk mail we receive would go down, either because the lack of government-subsidies would make it too expensive for junk mailers, or because individual customers could purchase "junk mail blockers" and pay the mail service providers to filter out the unwanted dross before it ever gets to our doors. [Side note: what if we could have SPAM blockers on our phone lines? Rather than some silly government "Do Not Call List", truly private telecom companies could actually innovate and come up with ways to filter out unwanted calls based on customer-defined settings.... ]
Therefore, I say "Privatize the USPS!" I think this is one government debacle that could be shut down in a few months, even in our badly mixed economy. I welcome any comments about the practical aspects of doing this, simply because I can't think of any possible reason why it wouldn't work, and work easily. I suspect I might be forgetting something that would at least throw a spanner into the works and require that privatization would need a year or two to work. Still, this seems like low-hanging fruit in the battle to strip the federal government on one of the many things it shouldn't be doing.
UPDATE: Special thanks to a commenter, Jeff, who pointed out a rather glaring gap in my knowledge. Namely, Article I, Section 8 of the Constitution of the United States, which states:
"The Congress shall have Power... To establish Post Offices and post Roads."
This obviously explodes my idea of privatization being easy. As Jeff notes, it would likely take an amendment to abolish the Postal Service. (or, via some Internet research on law school websites, it would take a creative definition of "establish" and a creative Supreme Court) However, this doesn't change the fact that the evidence in front of us clearly shows that it should be destroyed, and but for the protection of a flawed clause, it could be.
But what this brings to mind is this; if the predominant culture in America still understood and respected the ideas of the Founders, not just as a wispy sense of life but as valid, defensible ideas, then we could actually propose a Constitutional amendment, support it with facts, and pass it. There were 15 amendments within the first 100 years, when the first generation of revolutionaries and their immediate successors chewed over the new ideas of a government of laws and not of men, and for the most part, made them better. What does it say now that trying for an amendment about gay marriage seems more feasible than one to get rid of the Postal Service?
UPDATE #2 (05/13/08): Commenter Cal has further explained that it really wouldn't take an amendment, but instead just a majority vote in Congress. I'll take this as a valuable lesson that trying to dash off a quick post without more thorough research can backfire. Still, apart from that, this is an interesting topic, so I'll just take my lumps and enjoy the discussion.
While doing belated research, I found some other good articles about privatizing the USPS, here, here, here, and here.