Let’s Free Our Markets for Mail Delivery

Yesterday one of my top micro principles students sent me a link to this Washington Post article on last quarter’s loss by the US Postal Service. The article begins this way:

Savings from efficiency efforts and increased revenues from some categories of business were not enough to prevent the U.S. Postal Service from posting a loss of $1.9 billion in its second fiscal quarter, postal officials announced Friday.

The report, which follows a previous loss of $1.3 billion in the first quarter, spurred officials to once again call on Congress to enact changes the Postal Service has proposed, including switching to five-day delivery of mail while continuing six-day delivery of packages, and savings on employee health insurance, retirement and other costs.

It’s unfortunate that the Constitution gave Congress the authority to “establish Post Offices and Post Roads.” It’s more unfortunate that Congress used (exceeded?) that authority by giving the Post Office a legal monopoly on the delivery of first class mail (in 1792, by the Express Statutes). And it’s more unfortunate still that in a time of mounting government deficits Congress is bailing out the USPS, which in a free market would have failed long ago, at a current rate of $6.2 billion per year.

Instead of enacting changes in the Postal Service, Congress should repeal the government-subsidized-monopoly approach to mail delivery, get out of the way, and allow a free market approach to emerge.

First, repeal the Express Statutes. Announce that, effective immediately, any enterprise may deliver mail in the U.S. Next, privatize the USPS by selling off its assets as soon and as quickly as can be done in an orderly fashion that gets the Treasury good prices. The new companies that spring up to deliver mail would likely be the high bidders for USPS buildings and equipment, and eager to hire most of the good USPS employees. The buildings, land, equipment and human talent that free competition would show to be unnecessary for mail delivery could then be devoted to other productive purposes.

I wonder how much the Postal Service’s assets would fetch in a series of auctions all across the country? What a great way to pay off some of the national debt, instead of racking up more at a rate of $6.2 billion a year.


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