https://www.cato.org/policy-report/mayjune-1996/privatize-post-office-authors-urge
May/June 1996
Privatize the Post Office, Authors Urge
"The case for privatizing the Postal Service is clear," writes Cato's director of regulatory studies Edward Hudgins in the introduction to the new Cato book The Last Monopoly: Privatizing the Postal Service for the Information Age. "The Postal Service survives through sheer political power, not through its ability to satisfy customers. As the country moves into the 21st century, and as policymakers attempt to restore economic liberty, those policymakers should show the courage to abolish the last monopoly and privatize the U.S. Postal Service," says Hudgins.
The essays in this book are grouped by topic, starting with "The State of the Postal Service." Postmaster General Marvin Runyon writes that universal, government-backed mail service is necessary but concedes that introducing standard business practices to the Postal Service will begin to remedy its flaws. He argues for the "right amount of deregulation" of the Postal Service--but not complete privatization.
James I. Campbell Jr. traces the history of the postal monopoly, and Peter Ferrara argues that the inherent problems of the government postal monopoly have resulted in rates as much as 50 percent higher than they would be if competition were allowed. Gene Del Polito advocates fundamental change in a postal system that rewards laziness, punishes efficiency, and is wont to implement periodic "Band-Aid" solutions that fail to cure the disease of monopoly.
In Part II, "Competing with the Post Office," Thomas M. Lenard and Stephen L. Gibson examine the efficiency and low costs of private delivery firms and the new technologies of the telecommunications revolution, respectively. Thomas DiLorenzo considers the "natural monopoly" myth about the Postal Service and concludes that mail delivery would be less costly and more reliable if the Postal Service's monopoly were eliminated.
In Part III, "Market Structures for Private Delivery," R. Richard Geddes analyzes the results of a privatized system and concludes that "consumers would have even greater choices in the speed of delivery and price levels to suit their needs." Michael A. Crew provides an international perspective in his essay; noting that most industrialized countries are moving toward markets in postal delivery, he argues that high labor costs and access to established postal networks will be the primary problems in a move toward privatization in the United States. Former senior assistant postmaster general Murray Comarow recommends that a commission analyze problems and recommend changes in the Postal Service but cautions against immediate moves toward privatization before the details of such a system are fully examined.
The last part of The Last Monopoly examines two very different plans for privatization. Rep. Dana Rohrabacher (R-Calif.) suggests making the Postal Service an employee stock-ownership company, giving employees the opportunity to profit from a competitive private firm. Douglas K. Adie's solution is to break up the Postal Service into regional divisions (similar to the AT&T's breakup into regional Bell telephone systems). A holding company would control the divisions until they were sold off and take other transitional steps to full privatization.
The Last Monopoly, which includes revised versions of papers presented at a June 1995 Cato conference on "Private Postal Service in the 21st Century," puts the debate over postal privatization in perspective and provides a variety of insights into the specific problems to be solved by a free market in mail delivery. As editor Edward Hudgins writes, "The burden of proof should be on those who would retain the postal monopoly. The correct question to ask, then, is not, 'Should the Postal Service be privatized?' Rather, [it] is, 'Is there any compelling reason for maintaining the postal monopoly?'"
