The woes of the U.S. Postal Service are in the news again, with the organization headed for default once more. The New York Times has urged modernizing reforms, while the Direct Marketing Association called for outright privatization. Both of these proposals are misguided. They ignore the fundamental reasons to have a post office at all, and thus reach erroneous conclusions about how to best break the cycle of default scares and steer the USPS into the future. We should follow the example of nearly two hundred years of American history and re-nationalize the Post Office.
The Post Office makes no sense as an independent business. Instead it first and foremost serves as the internal communications infrastructure of the government. Next, it is a public service. Both of these goals directly contradict the suggestion that the Post Office can be independent of government.
Consider the government of the United States of America—easier said than done, for such a massive operation. Faithful, exact copies of laws passed in Congress must be available to any federal or state official, anywhere, for the law cannot be enforced if it is not known. Taxes must be collected from every citizen and business in the nation; funds must be disbursed widely and securely. Summonses and legal orders must arrive promptly at their destination. In general, all parts of the government must be in prompt, constant communication with each other, as well as with the citizenry, or we do not have much of a state at all.
It is easy to ignore this vast machinery of communication, largely because in our modern age it works so well. Few people, upon receiving, say, summons for an audit, will pause to marvel at how promptly it arrived. Nevertheless, such machinery is vital to the functioning of the government, and it is provided by the Post Office. Making the Post Office external or independent is generally unwise. It renders core government functions beholden to the health and interests of an independent body.
In order to meet this primary need for governmental communications, the Post Office requires a substantial infrastructure—“Post Offices and Post Roads,” in the words of the Constitution—across the entire nation. Mail sent every day requires a delivery every day. At this point, the infrastructure has vast, unused capacity. Every single citizen needs to be attached to the great postal network, but an ordinary person may only correspond with the government once or twice a year. Thus, it makes sense to employ this excess capacity to turn the Post Office not merely into a government function, but also a public service.
As a public service, the Post Office does charge the citizenry, much like mass transit systems. However, the Post Office’s goal is not to make a profit. Rather, the introduction of some nominal cost of carriage simply serves to discourage frivolous use while defraying cost; it is not meant to generate revenue. Instead, the cost of the Post Office should be met by taxation, the general fund of society. In this, the Post Office is like any other branch of the government. Police forces may make money with traffic tickets, but they do not rely on such revenues. To do so would create terribly perverse incentives.
So, as both as an internal government operation, and as a public service, the Post Office is properly an agency of government. And the history of the U.S. confirms this insight. From when Ben Franklin was appointed Postmaster General by the Continental Congress until 1982, the USPS was an arm of the U.S. government. It was only recently that we entered the current bizarre semi-private structure, where the USPS operates as an unfunded monopoly on first class mail.
Not only is nationalization in accord with the proper role of the Post Office and its history, it would also immediately resolve the so-called deficit of the USPS. A government agency, of course, cannot have an independent deficit. The military does not have a “deficit” because it costs more than it extracts in tribute. NASA does not have a “deficit” because it failed to discover gold on the moon. The Post Office, when properly constituted as a government agency, does not have a deficit. It adds to the federal expense, yes, but when considered as part of that whole, its costs are small indeed.
Furthermore, nationalization could remove the anti-competitive tendencies underlying the Post Office’s current monopoly on first class mail. As a government service, the USPS would need no monopoly to protect its revenues. With nationalization, we can remove unnecessary restrictions on first class mail and let private companies compete as well.
Some critics will maintain that putting the Post Office back on the taxpayer dime will allow us to delay and undermine the fundamental reforms necessary to bring the institution into the 21st Century. But this is the same misguided argument that gave us the debt ceiling crisis—that an artificial crisis, sparked by misguided bean-counting, should compel us to make haphazard, self-destructive cuts rather than the gradual and thoughtful reforms that are actually needed.
Others will argue that the Post Office is ultimately an anachronism in the days of digital communication. But it is only an anachronism if we let it become one. The Post Office should expand its offerings to include some form of digital communication, so that government offices may communicate literally at light speed without filling the coffers of telecom providers, so that American citizens are not beholden to the prices of oligopolistic companies when they wish to connect with one another. But it can do so as a government body.
When we consider the Post Office’s reason for existing, the way forward is clear. We must give up on the short-sighted semi-private model of the past decades, and return the USPS to its proper position as a part of the United States government.