I was thinking, Is the post office an exception to the rule that government is unproductive and provides no service?
I mean I know the post office relies on a monopoly or virtually a monopoly but it’s also funded by people’s voluntary choices (not taxes as far as I’m aware) and it also provides a service people do want.
It’s worth addressing I think. I hope this isn’t too stupid a question.
the government can monopolize any industry and by keeping the factories open, they would be ‘productive’. but at what cost?!?!
besides, they are federally funded, its off-budget…
I am pretty sure that competition is outlawed for letter carrying. This is like me saying, “All drinks are outlawed, except water which I shall provide.”
The USPS consistently raises rates while losing money. Now they are cutting a day of service due to the billions they are bleeding. Mail delivery is just another service that a free market would provide better.
I probably should have mentioned I meant the british post office and Royal mail sorry.Does anyone know if they receive taxes and which specific privileges they get?
so far I’ve found
http://en.wikipedia.org/wiki/Royal_mail
http://www.royalmailgroup.com/portal/rmg/content1?catId=23200532&mediaId=23700545
"
Royal Mail is required to operate within the pricing framework defined in Condition 21 (previously Condition 19) of our Licence. The detail of the pricing framework is reviewed periodically.
Royal Mail’s first price control was a two year price freeze that began on 23 March 2001, the day our first licence took effect.
Price Controls:
"Almost immediately, Postcomm began public consultations on our second price control. Links to our key responses to these consultations are provided at the end of this section. The details of our second price control were finalised in March 2003 and came into effect, for three years, on 1st April 2003.
Public consultations on our third price control began in March 2004 and continued until details of the control framework were finalised in May 2006. Our third price control is for a four year period, with effect from 3 April 2006. Links to our key responses to Postcomm’s consultation documents are provided below; a link to our new Licence, which includes details of the new pricing framework in Condition 21, is provided on the “Regulation Framework” page of this web site."
apparently “From 1 January, 2006, the Royal Mail lost its 350-year monopoly and the UK postal market became fully open to competition”(the truth of this is dubious)
or maybe not.
"2006: Royal Mail loses its monopoly when the regulator,[18] PostComm, opens up the Postal Market 3 years ahead of the rest of Europe.[19] Competitors can carry mail, and pass it to Royal Mail for delivery, a service known as Downstream access Also introduces Pricing in Proportion (PiP) for first and second class inland mail. "
I guess it is tax funded.
"The Government spends £150 million a year supporting the 9,400 rural post offices and the money is due to run out in 2008
Read more: http://www.dailymail.co.uk/news/article-421824/Government-set-decide-Royal-Mail-funding.html#ixzz0Z3BBeQOI
and the money is due to run out in 2008.
The chairman of the Trade and Industry Select Committee, Tory MP Peter Luff said media speculation that half of post offices could close was “very disturbing”.
"The Government must respond imaginatively to the challenge it has made. Government polices have accelerated the demise of the network and it is now up to the Government to halt that process.
“Wholesale closures are not necessary if the Government sets the right policy framework.” Colin Baker, general secretary of the Federation of Sub-Postmasters urged ministers to give a clear statement to help the industry plan for the future.
"My main concern is what will happen to those post offices that remain open because we need a sustainable network, otherwise we will be back again in the same position in three years’ time.
“Post offices touch 26 million people’s lives every year and in my view helping them is a good use of taxpayers’ money.”
As usual grimy unions want to prevent competition and prevent royal mail/post office being state owned.
When I lived in London I watched a UK show called Top Gear where the hosts literally raced a letter from the bottom of England to a northern Scottish island. They posted the letter and then drove a Porsche across Britain, using a ferry to get to the island, and arrived at the letter’s destination in Scotland in about 24 hours.
The surprise was the letter actually beat them there. Why?
Well, they showed how the Post Office used an airplane to get the letter from the rural starting town to a sorting office then all the trucks and vans transporting it to other sorting offices, culminating in a helicopter to the Scottish Island where the letter was dropped off by the Postman before midday.
The hosts were awestruck and remarked how amazing the Post Office is in the UK and how proud they are of it.
I was weeping, because I realized all the taxes I paid had gone into an enterprise that spends ludicrous amounts of money on getting typically asinine mail across the country quicker than a Porsche.
Sure, a private enterprise may not be able to achieve the same thing, but it also wouldn’t bleed hundreds of millions of dollars of other peoples’ money either.
I live in the U.K. and have saw Top Gear but never that episode. thanks for the anecdote.
I think the post office issue is kind of insignificant and not worth worrying about until bigger forms of market intervention have been eliminated.
Lysander Spooner vs US Postal System by Lucille J. Goodyear - American Legion Magazine, January 1981
There didn’t seem to be any way to lick the high cost of postage until Lysander Spooner came to the rescue
Since 1971, the cost of sending a letter has gone up 150 percent. Out mail service seems slower each day. And, there appears to be no feasible solution or alternative in sight. Like the weather, everyone talks and complains about the high postal rates and apparently slower service, but no one knows what to do about them.
Perhaps we need another Lysander Spooner. Lysander who? The Lysander Spooner, a fiercely independent New Englander who went to battle and brought about a change in the postal system. He could also be called the “Father of the three-cent stamp.”
Born on a farm in Athol, MA, in 1808, young Spooner studied law, pamphleteered and crusaded for dozens of causes before hitting upon an adversary worthy of his mettle: The United States Post Office, and he almost put it out of business!
By 1844, the spiraling postal rtes had so irked Spooner that he began an extensive study of the situation. There was no question that rates were much too high. It cost 18 3/4 cents to send a letter from Boston to New York and 25 cents to send on all the way to Washington DC A letter sent from Boston to Albany, NY written on a 1/4-ounce sheet of paper and carried by the Western Railroad, cost 2/3 as much as the freight charge for carrying a barrel of flour the same distance. Spooner’s summation of his study was succinct: high cost and no service.
People were trying numerous means to circumvent high postage rates and, for the most part, were failing. To those who tried to out-maneuver the Post Office, Spooner gave a loud “hurrah,” but he could see that they were fighting a losing battle. With no other solution in sight, he decided to go into competition with the U.S. Government.
To begin with, Spooner couldn’t understand why the Post Office should have a monopoly on mail delivery. He was schooled enough in law, however, to know that the Constitution ordered Congress to provide for mail delivery and it had done so with a postal department. But the wily Spooner found a loophole - the Constitution did not declare that a private citizen could not do likewise.
Spooner squared off for battle! With the loopholes his main ammunition, he organized his own postal service and audaciously named it “The American Letter Mail Company.” The company offered to deliver letters, with no limit on weight at reduced rates. He even ran an ad on the front page of the “New York Daily Tribune” with the following information: "AMERICAN POST OFFICE - The American Letter Mail Company has established post offices in New York, Philadelphia, Baltimore and Boston, and will deliver letter daily from each city to the others - twice a day between New York and Philadelphia. Postage 6 1/4 cents per each half-ounce, payable in advance always. Stamps 20 for a dollar. Their purpose it to carry letters by the most rapid conveyances, and at the cheapest rates and to extend their operations (as fast as patronage will justify) over the principal routes of the country, so as to give the public the most extensive facilities for correspondence that can be afforded at a uniform rate.
“The Company design also (if sustained by the public) is to thoroughly agitates the questions, and test the Constitutional right of the competition in the business of carrying letters - the ground on which they assert this right are published and for sale at the post offices in pamphlet form.”
The public enthusiastically approved the venture. Congress, however, was sputtering and the Postal Department was howling - all of Washington was enraged. How dare Spooner fo this?; How dare he so openly flout the Constitution? Government postal revenues took a nose dive while “The American Letter Mail Company” went merrily on its way picking up the postal business everywhere.
Washington lawmakers had no intention of sitting still for any “that Spooner’s shenanigans.” The midnight oil burned as attorneys pored over their books. Soon, the suits against Spooner and his cohorts began. Railroad heads were given full warning that government mails would be removed unless space and passage were refused to private letter carriers. It was “round one” for the government when an agent of Spooner’s company was found guilty and fined for transporting letters in a railroad car over a postroad of the United States.
The “round two” went to Spooner when a U.S. District Judge advised a jury that owners of conveyances were not liable under law if, unknown to the owners, a letter carrier brought mail aboard a train of steamboat. The “not guilty” verdict was sustained by the U.S. Circuit Court which expressed doubt that the U.S. had the right to monopolize the transportation of mail. This was tantamount to a commendation of Spooner’s theories.
For the postal officials it was a low blow and they sought further legal means to put an end to Spooner and his trouble-making company. More court reversals followed. Finally, the Postmaster General felt he had to bow to the issues and went before Congress to plead for the authority to lower postal rates.
In March, 1845, a reduction of postal rates was approved and put into effect that July. Letters weighing less than a half ounce could be sent any distance under 300 miles for five cents. Even the rates for newspapers were reevaluated and changed so they could be mailed without charge within a 30-mile radius.
Spooner, feeling that his efforts and his company were doing a great deal of good for the citizens of the land, wasn’t through fighting. His counteraction caused even greater consternation to his opponents - he lowered his rates. So the battle of law and loopholes continued.
In 1851, Congress again lowered rates and simultaneously enacted a law to protect the government’s monopoly on the distribution of mail. Whereas threats of jail had not fazed or dampened Spooner’s zeal in the fight, the latter move by Congress forced him into defeat.
Later that year, Congress lowered the postal rate to three cents for delivery anywhere in the country. In 1958, it had climbed to four cents and has not stopped climbing since.
As for Spooner, his great battle had ended and his company was disbanded. He died in 1887, his death barely noticed by the public. No one seemed to remember the man who had been able to show everyone what old-fashioned courage and enterprise, plus competition, could do to change things. He had proven that a cheaper and more efficient postal service was possible.
Perhaps this country would welcome a revival of the Lysander Spooner’s spirit in more areas than one!
How can a post office be considered a success in any sense of the word even as a coercive monopoly? Have you been in to one lately? Do yourself a favor and go to UPS and experience an epiphany.
ALso how do we know they are operating in the green? I’d be very shocked if the post office ever made a dime. I don’t trust what information they publish but even their own studies show a dim future.
http://www.usps.com/communications/newsroom/2009/pr09_066.htm
Haha. I bet it would have been cheaper to deliver the mail by Porsche too.
No, the post office is the epitome of government inefficiency.
Even Obama hates the post office.
Here’s an interesting article I found on LewRockwell.com sometime ago: http://www.lewrockwell.com/orig10/mathias5.1.1.html (Titled, The Death of Snail Mail)
A little off topic, but look at the history of how mail emerged in the old german kingdoms. It started with the merchant class, and was taken over by the princes and kings later on. Interesting to say the least.
No, it’s a good question, however, the Post Office, while not receiving public money, is extremely regulated and is a monopoly. Lysander Spooner tried to start his own mail carrying company, and he was shut down by the federal government.
Does any of this help?
Oh I’m sorry, I chauvinistically assumed you meant the American Post Office. My bad.
They still have a monopoly on first-class mail, nobody else can deliver letters. Also, nobody else is allowed to put anything in your mailbox. Nothing at all. Your mailbox is actually federal property.
My dad says he remembers when the mail came twice daily. Once in the morning, once in the afternoon. Imagine that!
But yeah, they’ve consistently raised rates, cut services, lost money, etc. Not a very “sustainable” business model IMO.
90% of the mail I receive is junk mail, or duplicates of something that I’ve already viewed online (like bank statements, mortgage statements, phone bills, etc.) I would get along just fine without mail. Period.
This year, USPS expects to increase its year-end debt to $10.2 billion, and incur a cash shortfall of about $1 billion.
…
Another key risk factor is the accelerated decline in mail volume. Mail volume declined by 9.5 billion pieces in fiscal year 2008 to about 203 billion pieces. As of the end of May 2009, mail volume had decreased another 18.5 billion pieces, and USPS expects to end fiscal year 2009 with mail volume of 175 billion pieces – about 28 billion pieces fewer than in fiscal year 2008.
Can the Market Deliver Letters? - http://mises.org/daily/1119
If it were a truly voluntary choice, the Post Office could not use it’s monopoly power.
The loophole for FedEx and UPS is that they are “express” mail carriers, whereas the Post Office, although it has express mail, focuses on the snail mail aspect as a monopoly.