In the US, what the parent comment was getting it, is why are we even talking about this in the first place? What problem is privatization trying to solve?
As an American, I have zero complaints about our postal service or how much we pay for it. Apart from the fact that I wish there were more branch offices and a few more workers at most locations. I don’t think privatization will solve either of those.
Why do we need to reform something that already works?
USPS hides 9bn of unfunded pension obligations every year and underserves urban areas to subsidize rural areas.
Mail volume is also generally falling as everything moves to email, so it is getting both less profitable and less critical.
The US is a rich country, we can afford to waste a lot of money and not notice, and of course one person's waste is another person's easier job or subsidized service, but given the ongoing decline in the importance of mail (vs package) delivery, it's not clear that this is a particularly important utility for the government to maintain any more.
It seems like your argument is actually that Congress should rescind that requirement, so that USPS can afford to better service urban customers while continuing to be a critical lifeline to rural areas.
Anyway, Congress did already rescind the requirement that USPS prefund the pensions (a 57bn debt forgiveness), but this is all just hiding the ball, the 9bn in pension liabilities being incurred now are real. Even if you don't prefund them now, an honest accounting says that these are part of your costs today.
A privatized USPS would likely get rid of pensions entirely.
Why are we talking about the post office again??
Just this week I had a package that was supposed to be delivered by Monday that lost tracking and didn't show up until Wednesday.
It might be "basically fine and good enough" but it's definitely not "amazing and completely beyond reproach" at least in my opinion.
This is the sort of problem you solve with more funding not privatization.
Here’s how these privatizations work:
1. Cut funding for public service
2. Service becomes bad
3. Cut more funding because service is bad and unused
4. Service becomes worse
5. Privatize
6. Strip the service for parts, a bunch of people get rich, classic PE stuff but worse
7. Start extracting rents, you have a nice monopoly
8. Public has no or worse service for higher cost
2. My package is delivered late yet again
3. I don't bother calling because the other 8 times I did I wasted an hour, nobody did anything (because nobody can get fired) and I didn't get any money back
4. Look how great we're doing! Complaints are down
5. Give us more funding because we're doing such a good job
This is just as likely of a spiral if we keep it publicly owned. It's also not good. How do you get good outcomes with.no accountability?
and getting them to be properly funded for providing an essential service rather than setting your quality of service by how profitable your area is
public systems have accountability through democratic means. make sure you vote for people that care about the postal service working well, rather than focusing on trans kids, and youll have a working post office
The question is just about the rate it happens and the ease with which you can get restitution.
Remember when Amazon’s delivery dates were commitments instead of estimates? That was interesting for me to think about in this context.
Well… I had a package being delivered, and it had missed its estimated arrival; it ended with me have a long discussion w/ their support that I'm sure was fed to /dev/null. FedEx was the carrier, it turned out, and they claimed they had attempted delivery. Problem was, they required a signature. I live in an apartment, & we have a dedicated package room. But FedEx's stance is that they can't deliver to the secure package room: they require a signature. But at my apartment, they come to the door with the street address on it. Weirdly, that is not the door with the buzzer — that's at a separate, more remote door. The delivery person is not going to take the time to find that door, assuming their corporate overlord's maximum dwell time even permits them to. So they can't buzz me. So they sticker an utterly arbitrary window on the building, and leave. The landlord clears the window. I am never notified.
Somewhere this kicks around in their system until I get a call from an unknown number of "hey your package is undeliverable." But the "guaranteed" delivery date was overshot, of course.
I was, of course, home the entire time. These are what spawn the "missed delivery" memes … https://xkcd.com/921/
This is a systemic problem, not just a "one time" issue: every package shipped via FedEx that requires a signature to me is undeliverable.
The shipper (my bank, in this case) was also less-than-helpful: they apparently have no idea who they ship with, let alone what tracking number they used. Worse, they refused to refund me the extra I had paid to expedite the shipment (which, as you can imagine from the above, did not arrive on time; worse, the expiditing fee was extortionary…)
… and this is modern capitalism these days. A fractal of bad service where the customer ends up having to do 90% of the support work.
FYI, I am quite sure that you can provide special delivery instructions for your address to FedEx. You should try to figure out how to do that.
Dealing with your bank, though… good luck with that when they don’t care.
But, perhaps you’re right, maybe the word “discrimination” is the wrong word. Either way, from a national policy standpoint there are very good reasons to subsidize rural areas for basic infrastructure services like mail and internet.
USPS from an operations standpoint is pretty much profitable. Congress basically doesn’t even allow USPS to fix itself when it absolutely can fix itself without major service cuts or privatization. For example, their pension fund can only invest in low-yield securities, while normal companies have more flexibility, so that inflates the cost of their retirement program.
> Either way, from a national policy standpoint there are very good reasons to subsidize rural areas for basic infrastructure services like mail and internet.
Please tell me a few.
Rural areas extract and produce many resources that urban areas depend on. Agriculture, fishing, oil, gas, uranium, wood, maple syrup, etc.
You can’t get workforces to live in those places or businesses to operate there if there’s no roads, internet, mail, schools, hospitals, etc (or if those things are prohibitively expensive).
Don’t forget that subsidy doesn’t always mean the difference between whether it’s expensive or not, it can also mean the difference between having and not having.
Another reason is that too much regional wealth inequality can be bad for national stability. It can lead to things like civil wars and unrest.
> Rural areas extract and produce many resources that urban areas depend on. Agriculture, fishing, oil, gas, uranium, wood, maple syrup, etc.
Sure, and market prices reward them for that in relation to how useful that is. No reason for a subsidy.
> You can’t get workforces to live in those places or businesses to operate there if there’s no roads, internet, mail, schools, hospitals, etc (or if those things are prohibitively expensive).
Why do we want to workforces to live in rural areas? In any case, land prices will drop to establish equilibrium.
That sucks for land owners, but the workforce doesn't care whether they get their benefits in forms of lower rent or explicit subsidies.
> Don’t forget that subsidy doesn’t always mean the difference between whether it’s expensive or not, it can also mean the difference between having and not having.
Singapore has plenty of rural areas lining up to export to her, without paying any subsidies (above market prices) to them.
> Another reason is that too much regional wealth inequality can be bad for national stability. It can lead to things like civil wars and unrest.
That's a good argument for breaking up nations into smaller units, sure.
fishing isndone off the coast, and the fishing boats can land in town or in a city for processing. the ships leave seattle, then go out to alaska to catch fish, thrn come back to seattle with frozen fish
oil, gas, uranium, etc make money hand over fist and can bring people in and out of the mines on a 2 weeks on, 2 weeks off schedule. they dont need a rural village beside
i think the real reason is that local rich people in rural areas are far too powerful, and federal resources ensure that the people that live in rural areas are too wildly oppressed by the local nobility. we hope that one day the nobles will be overthrown and there will be more proper righta and freedoms out in the middle of nowhere
Yes, it is discrimination. Treating people differently on any basis is discrimination on that basis.
It may or may not be illegal discrimination depending on the specifics and the governing law, and it may or may not be unjust discrimination depending on the specifics and the applicable moral framework, but all discrimination means is differential treatment on some criteria.
For example, even if you charge people the same _per_ letter, if you just look at eg subsidy per user, it's gonna be widely divergent.
Sure it is discrimination on the basis of duration sought, not discrimination on the basis of personal characteristics, and while it is discrimination, its fair to characterize it as bot discrimination between people, since different people making the same choice would be charged the same. Its obviously, in any case, not discrimination anyone would object to, but objectionability is a matter of the basis of discrimination, not the fact of discrimination.
The USPS gets a monopoly because it is required to go everywhere. If a private company doesn't want to go into Michigan it doesn't have to.
Without a monopoly protection USPS goes from being slightly unprofitable to very unprofitable by companies competing only in cheap areas.
Basically USPS needs $0.78 to mail a one ounce letter overall. However it doesn't need that much for you to mail within the same city, it is probably much less than that.
But they do need it if you send a letter across the country.
(And everything you explain could also be accomplished by state-run services, no need to involve the federal level.)
After all what constitutes not servicing?
How would a state run service be better?
Local elections have real value.
But splintering a government entity just because you can isn't automatically better.
For instance who pays for the last mile? Who pays for the first mile? With a federal program it doesn't matter the answer is the same. With a state program sending mail to a low density state could impact the pricing structure of a high density state.
You could end up with fragmentation where cross state is more expensive or worse these friction points are enough where the monopoly breaks down because a few states don't need a monopoly and just let local businesses compete.
Yep, aligns incentives nicely!
> You could end up with fragmentation where cross state is more expensive or worse these friction points are enough where the monopoly breaks down because a few states don't need a monopoly and just let local businesses compete.
Sounds like a good outcome, no? Yes, down with monopolies, especially government enforced ones.
Why?
There is daily USPS service to a postbox at the bottom of the Grand Canyon that is only accessible by mule paths. I guarantee this service would either be cancelled or go up in cost to thousands of dollars per letter if USPS was privatized. The sheer size and remoteness of parts of the USA is why it's a public good.
You say that like it's a bad thing.
Why does a hill billy who insists on living at the bottom of the Grand Canyon deserve a subsidy? That public money would be better spend helping poor people.
I'm going to say this nicely once instead of the reply I really wanted to say because I'll give you the benefit of the doubt of not knowing or looking it up.
Because it provides postal service to the Havasupai people living on their native land at the bottom of the Grand Canyon. Would you like to take a guess as to why Supai, Arizona, the capital of the Havasupai Nation, is located at the bottom of the Grand Canyon.
EU countries privatized their postal services decades ago, because governments are not allowed to compete with private entities in the market (unless explicitly allowed by EU-wide laws). And because the idea felt good, the same privatization extended to territories outside the EU, such as Greenland.
There is really almost no comparison to the US in terms of rural areas anywhere in Europe.
> There is really almost no comparison to the US in terms of rural areas anywhere in Europe.
Why do rural people deserve subsidies by virtue of living in the sticks?
For the same reason urban people deserve subsidies, for things like public transportation, by virtue of living in the city. The first sentence of the US Constitution lists "promote the general Welfare" as one of the foundational reasons for the creation of the Constitution. There is no "one size fits all" for a nation this size - the welfare of people in the city and the welfare of people in the sticks requires differing allocations of tax money. Also, mail delivery to the sticks benefits people in cities given that mail in the sticks is often sent to or from cities.
They don't.
> The first sentence of the US Constitution lists "promote the general Welfare" as one of the foundational reasons for the creation of the Constitution.
Just lower general taxation instead. That's even better for promoting general welfare.
> Also, mail delivery to the sticks benefits people in cities given that mail in the sticks is often sent to or from cities.
Well, the senders can pay then.
However Germany still has plenty of government interference in snail mail, like a universal service mandate (or a sector specific minimum wage).
Denmark dropped that requirement, and Danish society hasn't collapsed so far.
It isn't completely non-rivalrous, but the marginal cost of delivering a parcel diminishes as the number of parcels delivered in an area goes up.
It evidently is not. There's multiple providers.
2. Commercial providers rely on USPS to deliver packages in some situations.
About (2): duh, yes, because they ain't stupid. For an analogy: if there's free municipal water, Coca-Cola would make use of that for bottling, too. Or if there were subsidised electricity available etc.
Once again… the United States is very large.
Surfacing the cost of service provision to end users is generally a good tool to align incentives.
(Use welfare systems to give money to poor people. But don't worry about giving rich people support just because they are old or live in the sticks.)
You can find examples both ways - the Swedish privatization has been a disaster.
Huh? Even Germany managed to privatise their snail mail, and approximately no one would want to renationalise it.
What makes USPS a 'no-brainer public service'? What's the big benefit of having government snail mail?
Mail delivery service is not a public good. It's both excludable and rivalrous. See https://en.wikipedia.org/wiki/Public_good
> What about all the companies that send me junk mail 6 days a week?
Effectively calling USPS the 'federal agency of paper spam delivery' doesn't exactly sound like a ringing endorsement?