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Postal service, in the United States and in almost every country, is a constant target of ridicule. Everyone complains about the surly employees, lazy mail carriers, expensive rates, and chronically late deliveries. But until recently, governments have always defended their post offices and maintained their monopoly over mail delivery.
Governments all over the world are now taking a serious look at privatizing their postal systems. The Swedish government has deregulated mail delivery so that Sweden Post is now forced to compete with two private firms. The Labour Party in Great Britain has agreed to end the monopoly on mail that costs less than one pound. And the use of private carriers in Guatemala has become so widespread that their postal service is essentially privatized; even the government uses private firms to handle its mail.
Meanwhile, those of us in the land of the free are not quite so lucky.
Though the U.S. Postal Service competes with companies like FedEx and Airborne Express for some services, the Post Office maintains its monopoly in key areas. It is illegal to send non-urgent first class mail via private carriers and only the Post Office has the right to use your privately owned mailbox. As a government quasi-corporation, the Postal Service is also able to borrow at below market interest rates with the full faith and credit of the U.S. Treasury. And until recently, the Post Office was exempt from a number of employment laws, even those related to workplace safety.
In the 19th Century, private companies such as Lysander Spooner's American Letter Mail Company and Wells Fargo challenged the U.S. postal monopoly with cheaper ways to transport mail. As a result of this competition, postal rates declined from an average of 14.5 cents to three cents for a first class letter. The Post Office was also forced to copy innovations such as pre-paid postage and intra-city delivery of mail. Then, of course, it used its government-granted monopoly to force these competitors out of business.
Today, "snail" mail is being challenged by the use of e-mail, FAX's, Electonic Data Interchange (EDI), and other forms of electronic communications.
How will government-run postal services respond to this new electronic competition? Will we see worldwide deregulation and privatization?
In this Policy Spotlight we have collected some of the most interesting contributions to the privatization movement. For those of you who want to dig deep into the topic, we offer dozens of references and links. If you want to get a read on how the mainstream media has been treating postal reform, see J.D. Tuccille's Media Spotlight. And when you have questions or contributions to make, add them to the discussion forum.
Free-Market.Net Partners
National Center for Policy Analysis
NCPA has a wealth of information on privatization and postal reform.
Is Technology Making the Postal Service Irrelevant? discusses how technology, especially e-mail and FAX's, is eliminating the need for conventional letters.
In Guatemala, even the government uses private mail services, as reported in The Invisible Hand Delivers Mail in Guatemala.
Several other articles discuss how to reform the U.S. Postal Service:
Mail Fraud discusses the special privileges afforded to the USPS, like being tax-exempt and not subject to workplace safety regulations.
For quick takes on the USPS, see Balance Sheet on postal privatization and Special Delivery.
Cato has been working on the issue of postal reform for over a decade and has published a large number of analyses and books on the subject.
James Bovard has authored three papers for Cato on the postal service:
The Cato Handbook for Congress devotes an entire chapter to the subject of the Postal Service.
Cato books include:
From the Cato Journal, The Challenge to the U.S. Postal Monopoly, 1839-1851 discusses how the government solidified its postal monopoly in response to private competition, including Spooner's American Letter Mail Company.
Testimony on Postal Service Privatization by Edward L. Hudgins, Director of Regulatory Studies.
Excerpts from a conference on the future of the Post Office examine the question Is It Time to Privatize the Postal Service?
Cato's recent conference Mail @ the Millennium is available in Real Audio.
The Twilight of Government Growth in a Competitive World Economy examines the postal service and other services traditionally run by the government in the light of a more capitalist society.
From the 1995 Cato Conference, "Postal Service in the 21st Century: Time to Privatize?", Steve Gibson's paper entitled E-Mail, Faxes & PCs: Telecom Alternatives discusses the effect of the information revolution on the postal service.
From Vitamin B: Your Daily Dose of Bionomics:
Postal Competition Coming? from Advocates for Self-Government is an excerpt from a USPS customer satisfaction survey.
Nevada Policy Research Institute's Privatization Worldwide is a radio commentary on privatization efforts worldwide.
The Privatization Revolution, a speech by Mackinac's Lawrence Reed, mentions the de facto privatization of postal service through the use of private carriers.
Heartland's Thoughts from the Business World on Downsizing Government looks at the benefits of privatizing government-owned enterprises.
Steve Buckstein of the Cascade Policy Institute had this letter to the editor published in Insight magazine:Why the Post Office is Obsolete.
In December 2004 this page was modified significantly from its original form for archiving purposes.
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