Privatization is an idea whose time has come, again
Miracle of miracles. The U.S. Postal Service finally understands that the only possible route toward survival is to dramatically reform itself.
Postal Regulatory Commissioner Robert G. Taub acknowledged this harsh reality. “If a downturn in the economy or other circumstances further stress the Postal Service’s cash flow,” he told New York’s Black River Valley Club on June 5, “it risks not being able to pay some of its bills and could — in the extreme — run out of cash.” Alas, he “currently estimates that it has only 14 days of liquidity.”
Mr. Taub also said, “Unlike other countries, the universal service obligation in the United States is largely undefined, and is instead comprised of a broad set of policy statements with only a few legislative prescriptions.” Regardless, he firmly believes “the strength of the system is the engine that will ensure the Postal Service will continue to meet its obligation to deliver.”
Many Americans still want the option of a post office, but there’s a better way to do it: Privatize the U.S. Postal Service.
As I wrote in The Washington Times last October, “Opening up the free market to private enterprise would ensure that real competition exists for mail delivery and postage rates.” It would create more business opportunities and jobs, and give consumers “more choice and options when it came to sending letters and packages to family, friends and colleagues.”
Surprisingly, one of the best models for starting up a private post office comes from the libertarian-anarchist philosopher Lysander Spooner. Why? For a short time, he ran one.
In 1844, Spooner introduced the American Letter Mail Co., a direct competitor to the U.S. Postal Service monopoly. He was frustrated with government interference, extensive regulation and high postage rates. According to his article in the American & Commercial Daily Advertiser, he designed a business model that would “give the most extensive facilities for correspondence that can be afforded at an [sic] uniform rate of postage.”
Although there were other historical attempts to form private express companies, the American Letter Mail Co. was the most successful.
Offices were established in major cities such as New York, Baltimore, Boston and Philadelphia. They offered significantly lower rates for stamps. They had agents who traveled with the letters by train and boat, and passed them on to messengers who delivered them to households. The business flourished, customers were satisfied, and free enterprise reigned supreme.
The fiercely independent philosopher had another noteworthy goal in mind. He wanted to “test the Constitutional right of competition in the business of carrying letters.” While it probably sounded anti-government to the status quo, it would have been music to the ears of those who cherished capitalism and freedom.
Spooner’s 1844 paper, “The Unconstitutionality of the Laws of Congress, Prohibiting Private Mails,” outlined his pro-competition position in great detail.
For example, he believed the “power given to Congress, is simply ‘to establish post-offices and post roads’ of their own, not to forbid similar establishments by the states or people.” He argued there “is nothing in the nature of the business itself, any more than in the business of transporting passengers and merchandise, that should make it a monopoly, either in the hands of the government or of individuals.”
He even wrote, “If the Constitution had intended to give to Congress the exclusive right of establishing mails, it would have required, and not merely permitted, Congress to establish them — so that the people might be sure of having mails. But now Congress are no more obliged to establish mails, than they are to declare war. And in case they should neglect or refuse to establish them, the people could have no mails, unless individuals or the states have now the right of establishing them.”
The U.S. government was naturally furious and attempted to bury its competition. Stamp rates were lowered to 12 cents, but Spooner reduced his rates even further — and offered free local delivery. The matter was thrown into the courts. Spooner’s financial resources eventually dried up, and his business folded in 1851. (The American Letter Mail Co.’s lasting legacy is the 3-cent stamp.)
Many people have forgotten about Spooner’s impressive challenge to the postal monopoly. That’s unfortunate, since he proved a private company could offer affordable stamp prices and more efficient mail services in a competitive marketplace. The U.S. government should privatize the mail industry to increase competition, choice and better service for consumers. Alas, if history is any example, they’ll never do it.