THE Postal Service recently announced a whopping 20 percent increase in the price of postage stamps, from 25 to 30 cents, effective early next year. Just a few weeks ago, the postal barons announced that they were slowing mail delivery guidelines because they couldn't keep up with previous schedules. So now postal consumers will enjoy the privilege of paying more for less. That is nothing new. Over the last 30 years, postal rates have increased at more than twice the rate of inflation. During the same period, mail delivery has gotten slower and slower.
The reason for such lousy performance is simple. The Postal Service is a monopoly by government decree. The law prohibits any other firm or individual from delivering letters or other first-class mail. Competing firms also cannot deliver addressed circulars, advertisements, solicitations, mass mailings, or other third-class mail. Violation of those prohibitions is a federal crime that can lead to imprisonment.
In a society that values freedom, criminalization of private mail delivery should seem a bit authoritarian. In economic terms, the legally mandated monopoly means that the Postal Service lacks incentives to control costs and maintain high quality, since consumers have nowhere else to turn. Because of its protected monopoly status, the Postal Service is able to overpay its bureaucrats in salary, perks, and benefits, while minimizing the work obligations of each employee.
There is no reason the Postal Service should not be subject to competition like everybody else. The government originally established the post office to ensure communication with the frontier. Today, however, not only national but global communication is available at the push of a button. Telephones reach every nook and cranny of the nation. The country is blanketed by radio and television, including endless cable channels and private transmissions. Satellite communications cover the globe. Computer systems linked across the nation and around the world can transmit data and print out documents in an instant. Inexpensive and ubiquitous facsimile machines transmit documents anywhere in the country in seconds. Moreover, by waiver from the postal monopoly, a number of private services now deliver letters, documents, and packages anywhere in the nation overnight, if not in just a few hours.
In this modern world, mail delivery is just another service. No rationale remains for any government role in postal service, let alone a government monopoly.
The typical special-interest argument is that without a monopoly the Postal Service would be unable to use revenue from profitable urban and commercial mail to subsidize unprofitable rural delivery, allegedly leaving rural areas without service or at least without adequate service. But if the private sector can deliver sugar, salt, gasoline, clothing, and furniture to rural areas, then it can also deliver the mail. Indeed, the private postal services that are allowed to compete for some categories of mail, such as Federal Express and United Parcel Service, deliver nationwide.
Those private firms also charge standard fees nationwide, with no extra charges for rural delivery.
Indeed, a private competitive market would be so much more efficient than the current monopoly Postal Service that charges for rural delivery would probably be less than they are now even without any subsidy. The Postal Service's own internal audits show that costs for routes on which services are contracted out to the private sector are about 85 percent less than the costs for the Postal Service to provide the same services directly.
Monopolies don't work. In this era of crumbling socialism, that should not even be controversial. We must repeal the statutes that prohibit private competition in the provision of postal services.
At the same time, the government should give the Postal Service to the postal employees to run, by issuing an equal share of stock to each employee. The Postal Service would then operate as a completely private company subject to open market competition like everyone else. Service would improve dramatically, costs would be cut greatly. The problem with the current system is not the employees but its monopoly status, which creates the wrong incentives.