The Post Office Deserves No Pity

Published in Economics .

In a recent Washington Monthly article, the “political right” gets berated for supposedly destroying the U.S. Postal Service. According to the author, the agency is being run to the ground because it is being (gasp!) run like a business — not because it is a bloated bureaucracy, whose very existence relies solely on government force.

Claiming that Washington, D.C. has handled the post office with an attitude that ranges from “neglect to hostility” over the years, the author seeks to convince us the system is, indeed, a marvel. After all, the beautiful USPS buildings erected during bygone eras under tyrants such as FDR are a thing to behold. Furthermore, the post office serves low-income communities and lets you mail anyone anywhere in the country a letter for two quarters and a nickel. No private company would do such a thing, he argues.

USPS post office postal service

But despite being “one of the most impressive enterprises on earth,” the post office is the target of harsh criticism, the author adds, which prompted a series of congressional hearings and Government Accountability Office reports.

Sill, the criticism is unwarranted, the writer argues. And despite the mounting evidence to how inept and corrupt the agency is, he believes that the USPS’s “massive infrastructure network” is largely unexplored by the federal government. To solve this issue, he argues that “[t]apping into this network has the potential to revitalize both the Postal Service and our democracy,” urging Congress to expand the agency.

In other words, he wants to “fix” the post office by bolstering its monopoly and giving it more power over our lives — as if it didn’t have enough already.

A Postal Nightmare

The post office is a virtual monopoly, as the Washington Monthly author is so quick to point out. But just because the USPS handles 47 percent of the world’s mail doesn’t mean the agency is any good at it, nor does it mean that its alleged service’s value exceeds the costs to produce it.

As economist Peter G. Klein put it, economic value and technological or engineering value aren’t the same.

Unless the post office is able to compete as a private company within a market setting, it is impossible to determine how valuable it is. And that’s because the agency doesn’t respond to the same pricing signal private businesses do.

While it is OK to be ignorant of how economics works, it is outright irresponsible to make arguments in support of the expansion of a government-backed monopoly without taking into consideration the ramifications. And yet, that’s exactly what this article does. And what’s worse, it ignores the many steps the federal government took to strengthen and empower the USPS over the decades, using the government’s monopoly on force to literally keep competitors offering similar services at a lower cost from entering the market.

As a  matter of fact, since 1872, it has been illegal for anyone other than “authorized U.S. Postal Service delivery personnel” to “place items in a mailbox.” Unfortunately, a teenager from Rochester, New York, learned not to mess with the USPS goons the hard way.

After offering his neighbors same-day bicycle delivery at 10¢ each for Christmas cards, USPS inspectors knocked at his door, threatening to throw him in jail if he didn’t give up.  To anyone at the time, this sounded ludicrous. After all, what’s wrong with a young boy offering this service to willing customers? Well, according to the federal government, everything.

To supporters of the federal monopoly on the mailing system, the service is valuable because only government can protect our privacy. However, we’ve learned that it is the federal government that is the main perpetrator of privacy violations.

Unfortunately, many Americans choose to ignore government’s use of the post office to routinely invade people’s privacy. The author of the Washington Monthly article arguing for the expansion of the post office is one of them.


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