Postal Privatization Gaining Broad Support

October 6, 2015

Brookings scholar Elaine Kamarck has a new study favoring partial privatization of the U.S. Postal Service (USPS). Her study comes on the heels of a solid study by Clinton administration economist Robert Shapiro, who looked at the subsidies and regulatory protections enjoyed by the USPS.

Conservative and libertarian scholars have discussed the advantages of USPS privatization for years. Britain, Germany, the Netherlands, and other countries have privatized their systems. But the mainstream media and leaders in Congress have taken little notice. Kamarck’s study generated a respectful news story in the Washington Post, so hopefully the addition of centrist scholars to the debate will generate momentum for reform.

Kamarck discusses the rise of the Internet, the plunge in snail mail volume, and the postal system’s endemic red ink. She discusses the increasing concerns about the USPS competing against private firms in areas such as package delivery.

Kamarck advocates splitting the USPS into two pieces: a government piece that fulfills the “universal service” mandate for delivering mail to every address, and a private piece that would handle activities that compete with other companies.

With due respect, I think her discussion in favor of retaining a universal service mandate is rather weak and internally inconsistent. She says, “the concept of ‘binding the nation together’ seems to be as strong in the information age as it was in the beginning of the republic.” But if that is true about the “information age,” it is because Americans use all the new electronic tools, such as email and Facebook, to bind themselves together with friends and family—without any government mandate.

Kamarck talks about how people hardly receive personal letters in the mail anymore, even Christmas cards. And she points to polls showing that two-thirds of people would be just fine with ending Saturday delivery. So given all this, why should the government force any postal organization to spend money on delivery that people are increasingly ambivalent about?

All in all, Kamarck’s study raises the right issues, and is a great addition to the debate. That debate needs a shot in the arm, because, as Kamarck notes, a stalemate over reforms has persisted in Congress for years, despite the steady downward spiral of the government’s postal system.

Indeed, if you want an example of a dysfunctional Congress and a lack of pro-market leadership by House and Senate Republicans, this is it. Look at Britain: moderate David Cameron was able to privatize the 500 year old Royal Mail in 2013 under a coalition government with a liberal party. So whoever the new Republican speaker of the U.S. House is, this would be a great issue to move forward and demonstrate some boldness to the party’s voters.    

For more on postal privatization, see here.  

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