From the mailbag

Michael Hartl — Fri, 10 Mar 2006 17:34:00 -0800

In the comments to my post on privatizing the USPS, IdahoEv makes a thoughtful analysis to the effect that maybe the USPS monopoly is actually a good thing. I like his arguments, but I think they fail to clear the three hurdles from my previous post. It may be that the USPS reaches some global optimum by using force to exclude competition, but—even discounting the cost of the lost freedom—it’s hard to know a priori; such arguments read more like rationalizations for the status quo. Moreover, a love of such analyses lies at the heart of every good central planner—Markets might be good, they think, but markets are dumb; surely with a little intelligent intervention we can do even better. But, as counterintuitive as it seems, the failure of central planning suggests that you really can’t.

Indeed, the private sector routinely competes successfully with the government even in the face of deeply entrenched, subsidized competition. Private schools exist despite their public counterparts; private security agencies thrive even in the face of police competition; professional mediators and arbitrators ply their trade despite a monopoly court system. The glorious history of black-market postal services (including one run by Lysander Spooner, a hero of libertarians everywhere) and the success of UPS and FedEx suggest that mail is no different. And if private mail delivery does that well against a government monopoly, it’s not too much of a leap to anticipate even greater success in that monopoly’s absence. (Dangerous exercise: apply this argument to schools, protection agencies, and courts.)

When it comes to privatization, what I’m usually worried about is not that we’d be screwing up some beautiful public-goods global optimum, but rather that the government would botch the privatization. Turning the private sector loose on the thorniest problems of our time—security, say, or education, or traffic—could easily lead to disaster if done stupidly.* California’s energy ‘deregulation’ is perhaps the most dramatic recent example of this. But breaking the USPS’s monopoly is so simple that even the government could get it right: Homeowners—you now own your mailboxes!

*I wish that, rather than cockamamie public policy, optimal privatization were the policy wonk’s wet dream—Let’s figure out the best way to auction off the L.A.-area freeway system, and solve the traffic problem once and for all. Now there’s some ‘central planning’ I could get behind.

Eikonoklastes by Michael Hartl: From the mailbag

From the mailbag