Hudgins Tells Postal Service Privatize!

Edward Hudgins, the Washington D.C. Director of the Objectivist Center, spoke on October 21 at a conference held by the inspector general of the U.S. Postal Service. Hudgins, who is the editor of two books on postal issues—The Last Monopoly and Mail @ the Millennium—began by observing that the postal service made a wise choice in 1999 when it put out a thirty-three-cent Ayn Rand stamp. But he noted that the price of a stamp now is thirty-seven cents and that rates are likely to rise in the future because the postal service is still a government monopoly, something anathema to Rand.

Hudgins made the case for postal privatization by reviewing the incredible changes in technology over past decades. Before the information revolution, communications occurred through discrete media: TV or radio broadcasts; printed books, magazines, and newspapers; telephone calls and telegrams through wires; and, of course, letters, bills, and advertisements sent through the mail. But first personal computers with e-mail, then cell phones, Palm Pilots, satellite dishes, wireless laptop computers, Voice-over Internet Protocol have collapsed the distinctions between most of these media. Entrepreneurs have swiftly developed, tested, introduced, and commercialized new services at a dizzying pace. But the plodding eight-hundred-pound gorilla in the middle of the swift race to better communications is the eight-hundred-thousand-person postal service.

Hudgins observed that the cost of mailing a letter has risen over past decades at about the level of inflation. But the costs of other "network" services have declined. Consider the industry that carries people rather than just mail: the airlines. Since deregulation in 1978, the real cost of flying has declined by at least a third. Trucking deregulation similarly has reduced shipping rates.

Hudgins maintained that the postal service will continue to lose revenue as more individuals pay bills electronically and otherwise utilize electronic communications, requiring more postal rate hikes that in turn will drive away more business to alternative media.

Only private entrepreneurs, said Hudgins, can develop and integrate services to best serve consumers. We do not know what the mix of communications and delivery services will look like in the future, but we do know that a government monopoly that enjoys special privileges, is tax exempt, and has regulatory authority that it can use against private competitors assures that consumers will not be well served. Thus, he concluded, it is time to bring the U.S. Postal Service into the twenty-first century by privatizing it.