Impervious to Rain, Sleet...and Economics?

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The US Postal Service has announced that it will continue Saturday mail delivery, despite economic inefficiency.

It’s tough to have a monopoly, isn’t it?

Showing once again that “Republican” is not synonymous with “friend of free markets,” consider the following:

“This is one of the most self-defeating proposals I’ve heard in my life,” Rep. Robert L. Barr (R-Ga.) said at a hearing in April. “If there’s one thing the Postal Service could do that would guarantee its demise, it’s eliminate service on Saturday.”

In that regard, the Washington Post reports that

Postal management has been lobbying for postal reform legislation that would give the independent agency more flexibility to change rates and more power in labor contract negotiations. Bulk mailers and private package delivery firms such as United Parcel Service oppose the pricing flexibility. Postal unions oppose changes in the contract negotiation process.

Here’s a suggestion: rather than tinker with labor contracts and postal rates, let the postal service stop Saturday delivery, and allow private carriers such as FedEx and UPS, and other as-yet not existing services, to compete in the delivery of first-class letters. Right now, the federal government — by law — gives the Postal Service a monopoly on first class mail.

Or consider an alternative: let the Postal Service continue Saturday delivery, and allow private carriers to compete with the government’s service. My prediction: those who have an incentive to make a profit via the marketplace, namely, private carriers, will demonstrate over time that there is no “need” for a government monopoly on the mail…unless those who favor such a governmental monopoly intend to rely on the argument that there is a “need” for easy snooping on postal customers, which might not be so easy if private carriers carried private correspondence. Search warrants, probable cause, and all that.

Are the days of government monopoly postal service numbered? If not, it’s difficult to understand why the Postal Service has been spending millions on high-profile television ad campaigns, including celebrity sponsors such as Tour de France cyclist Lance Armstrong.

The fact that the government gave itself a monopoly on letter delivery is odd, considering that in New York City, before the Civil War, the postal service only delivered one million of the eleven million letters delivered. That’s right. When consumers had a choice, they chose private companies over 90% of the time (Jeffrey Rogers Hummel, Emancipating Slaves, Enslaving Free Men, p. 222; statistics are for 1856). Today, private carriers such as FedEx and UPS have made huge inroads into the Postal Service’s market for package delivery. Faxes and email have similarly cut into the market for stamps for first-class letters and postcards. The reason: such alternatives are faster, cheaper, and, in some cases, more reliable.

Today’s postal customers are not happy with the current legally-protected monopoly. As the Washington Post also reports,

Bulk mailing groups have accused the Postal Service of inflating estimated loss figures and floating the idea of ending Saturday mail in order to generate publicity and spur congressional action on postal reform.

“Their charade is over,” said Alliance of Non-Profit Mailers executive director Neal Denton of the decision to keep Saturday mail. “They never had any intention of rolling back six-day delivery, it would have taken an act of Congress to do that.”

Hey, there’s an idea.

America is the land of the free. How about the freedom to choose alternatives to a government monopoly on mail delivery?

Mr. Dieteman [send him mail] is an attorney in Erie, Pennsylvania, and a PhD candidate in philosophy at The Catholic University of America.

© 2001 David Dieteman

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