The news is given US postal service can be privatizedIt is a good time to explore why it is a wise idea to privatize mail delivery and start market competition.
First of all, it is helpful to consider the case of privatization. unwise And why mail delivery is different. In particular, many economists and political philosophers are skeptical about privatization. Public goods-In that, it is characterized by non -induced and non -diesel consumption. Defense is a typical example. When the army protects the state from the attack, all individual citizens enjoy the protection through nuclear deterrence (non -regular). The protection of one person does not reduce the protection (irregular consumption) that others enjoy.
However, if an individual is provided, there is little incentive to pay because the defense cannot exclude individuals. Instead, they prefer to ride freely of others’ contributions. Everyone (or almost everyone) prefers free rides, so we will not voluntarily provide good in market transactions. Therefore, the state may need to provide defense.
But note that this claim is not opposed to the privatization of the post office. Mail delivery is not public goods. Critically, mail delivery can be excluded. The delivery company can limit the service to the customer. If you do not buy a DOORDASH subscription, doordash will not provide food. If you do not pay the FedEx to deliver the parcel, the parcel will not be delivered. In fact, if you do not put a stamp on the letter, the US postal service will not deliver it.
Here, a positive example for mail delivery privatization is simple. Competitive personal delivery providers have a powerful incentive to provide fast, inexpensive and reliable services. After all, if the service is slow, expensive, or incomprehensible, customers can simply vote in dollars and provide business to competitors who do better work. This option is not available when a delivery company is a monopoly operated by the government, so monopoly has a much weaker incentive to provide good services.
So why do many people resist the ideas of privatizing mail delivery, given that many people can be provided efficiently in free markets, such as DOORDASH? For example, Robert Reich privatizes USPS. “A terrible thought to sacrifice the public interest in private interests.” There is one possibility here: Status quo bias. We prefer the current state irrationalally because we are not often better than change, but are in the current state. Therefore, people will be uncomfortable with the privatization of mail service. This is because it interferes with the current situation even though it is simply confusion.
To protect the current state prejudice Reverse test. In other words, imagine that the current state has reversed the individual’s competitive mail delivery company to become a standard. We have Doordash for mail, Ubermail, etc. Do we want to convert this contract to the actual state of the government’s exclusive mail delivery service? It is definitely not. Think this way. Do you want to nationalize DOORDASH and support models similar to mail delivery unless you support the remaining competition of Uber Eats, GrubHub and Food Delivery Business?
Just as Uber Eats can’t deliver a buffalo wing to customers when they are not profitable, they may be worried that Uber Mail will not provide mail to customers if they are informally. Unlike individual delivery companies, as the US postal workers pointed out “USPS cannot be far from a profitable area.”
However, the claim that everyone is eligible to receive mail, regardless of profitability, does not justify nationalization of mail delivery. The most effective way for everyone to access groceries is not to nationalize groceries, but to provide the benefits of shopping at the grocery store you choose. Similarly, the state can issue an e -mail voucher to poverty and especially those who live in difficult areas. The system maintains the benefits of market competition and ensures universal access to mail delivery.
Christopher Freiman is a general business professor at John Chambers Business and Economics of West Virginia University.
