I went to the post office today for the first time in a long time and I purchased a pile of “Forever Stamps.” These are stamps that cost 42 cents each today, but will remain valid first-class postage on all qualifying mailings regardless of what postage rates might be in the future. Two things about this strike me as interesting:
The goal of the post office is not to make a profit, but to provide a service to all U.S. citizens, and if we lose something in efficiency, we are willing to make that sacrifice in exchange for certain benefits, all of which are due to the fact that the post office is not subject to the laws of the market. So, for example, U. S. citizens are guaranteed to have postal service regardless of whether or not it is profitable for someone to provide it, and since we want postal service, we value this guaranteed access. Contrast that with earthquake insurance in California, which, as I pointed out yesterday, is now almost completely unavailable, because in the free market it is not worth the risk for anyone to provide it. Now, this might never happen to the postal service, but it illustrates the point that sometimes citizens want to have a service provided to them in a way that insulates it from market forces, in order to make the existence and nature of that service independent of its profitability. Another obvious example, in the rest of the industrialized world, is health care. Every other industrialized nation in the world provides health care to all of its citizens, through the state. The U. S. is the only exception to this rule. The other industrialized nations do not do this because it is more efficient (though, on that score, they are actually doing very well), but because they value universal health care, and the free market would not guarantee it. Americans have grasped the same idea for a few things, like postal service, and hopefully we will realize it for other things in the near future.
Dr. Barnes,
Just because we all want something, is that sufficient reason for the government to offer it? I would argue that many of us don’t just want postal service, but we want GOOD postal service. The fact that the USPS is so lousy at that leaves room for the private market to operate (UPS, FedEx). What you’ve assumed is not only that we want postal service, but we all equally want the same lousy service of the USPS. I would at least like to see what the free market can offer before assuming that it just can’t work. Wasn’t FDR at least a big fan of experimentation?