Wednesday, March 3, 2010

US Postal Service

I think it likely made good sense to have a government-run monopoly post office in the 1700s and for much of the 1800s, at least in relatively undeveloped areas. I doubt it has made sense (that is, economic sense in the context of comparative institutional design) anywhere in the US since 1900. I expect the advent of email will finally, slowly, rid us of what has become a monument to economic inefficiency and technological stasis. This article provides some further evidence on that score.

The question then becomes, how best to bring this object lesson in public management to a close? There will be lots of upset as small communities lose their heavily subsidized postal outlets and still more as postal workers lose jobs that pay far better than other jobs requiring similar skill sets (and provide generous pensions and job security).

My thought is that it is time to repeal the laws giving the postal service a monopoly on mail delivery and that this represents a better alternative than trying to privatize the current institution, either with or without its legal monopoly intact. You want the end result to be a vibrant, competitive postal delivery industry, not the postal equivalent of GM, and I think privatization at this point would yield the latter.

No comments: