Don Boudreaux's latest observations on "spending addiction" remind me of a line from Phil Gramm that I annually present to my IO class:
[I]n the darkest hour of the health care debate, when it looked like Bill Clinton was about to convince America that it made sense to tear down the greatest health care system the world had ever known to rebuild it in the image of the post office -- (laughter) -- when pollsters were saying it was political suicide to take on the Clinton health care bill head-on, when 20 Republican senators had signed on to a big-government compromise that raised taxes, I stood up and said, "The Clinton health care bill is going to pass over my cold, dead political body." (Cheers/applause.)
Unlike Gramm's audience, this doesn't make me want to cheer or applaud. Rather it makes me want to interrupt:
Look, if we can all agree that a government mail monopoly is folly, why isn't postal privatization at the top of our agenda? Why are we debating health care in the first place, if we can agree that we don't want anything to function like the post office already does?
Similarly, I recall that during his '92 campaign, Clinton often said things like, "There are many government programs that don't work. But some do, like..." And I always wanted to interrupt:
Hold your horses, Bill. Can you provide a list of the programs that don't work, so we can abolish them? Then, and only then, should we sit back and listen to your list of programs worth expanding.
I appreciate the general logic of this post, but I don't agree with you or Phil Graham about the Post Office. USPS has its problems, and it does make mistakes, but frankly, if the health care industry made as few mistakes treating patients as USPS does delivering letters, most of our malpractice lawyers would be looking for a different specialty.
The reason privatizing the post office hasn't become a big issue is that people have innovated around it--and the resulting competition has also had a salutary effect on the post office, at least on the margin.
The Post Office may be better than the postal service in Chad, or somewhat better than it used to be, but in my own experience and judging from the stories of others, anytime a package has been lost it's almost ALWAYS the USPS, and not one of its private sector competitors.
Jokes about the efficiency of the Post Office or about how hard it is to get fired from a state job (I'm from Sacramento) don't come about for no reason...
BC makes an excellent point. As Milton Friedman indicated decades ago, making generally-beneficial changes in the face of determined opposition from interest groups is the toughest thing to do in democracies. Any democractic system of governance which solves this problem in a systematic fashion will inherit the earth (in a manner of speaking).
I never had a serious problem with the post office. I've become a rather heavy user of it now that I finally gave in and got Netflix and it is almost always perfect. One day after I put a DVD in the mail they have it and one day after they send one I get it. In general they have told me a normal 39 cent letter will get to anywhere in NJ in one day and so far they are right.
Fed Ex, UPS etc. are better when it comes to stuff that must come overnight. But here cost is the real advantage. Most of the time I have no problem with something taking two or three days to arrive and at less than a dollar you can't beat the post office. When I used to sell books on Amazon I always used the Post Office.
Another place where the post office does great is personal service. A few times I was waiting for a check I was able to call the local post office and have them pluck it out of the mail before it went out and I picked it up in person. With UPS/Fed Ex it is sometimes hard to get them to check if anything is coming to you UNLESS you have a tracking number.
There is obviously a business need for Fed Ex/UPS's services. To be honest, though, I never thought of the Post Office as some type of hellish gov't agency. Perhaps this is a local issue. I've been told the post office is pretty bad in major cities like New York or Chicago. I can see how a crappy post office in those areas would piss off all the wrong people (loud intellectuals looking for articles to write before their next deadline).
Virginia Postrel said,
"The reason privatizing the post office hasn't become a big issue is that people have innovated around it--and the resulting competition has also had a salutary effect on the post office, at least on the margin."
And yet some of my libertarian friends look at me like I'm nuts when I suggest things would be a lot better if only private competition were allowed in areas where the government currently establishes legal barriers to entry. Yes, I really do think abolishing legal tender laws would have a big effect over time, as would abolishing truancy laws, or allowing unapproved prescription drugs to be sold, even with a big "Non-FDA Approved" label on the front. I understand the Rothbardian, knee-jerk impulse to say "abolish federal agency X," but I'm not sure abolition is even necessary, so long as people are allowed to "innovate around" existing bureaucracy.
Nice call for greater prominence for abolitionism and the presumption of liberty. Bravo.
Interestingly the 'nutritional supplement' industry seems to be able to operate with a virtual "Not FDA approved" sticker. While pharma companies spend hundreds of millions to establish that their drugs are safe and effective just about anyone can bottle some herb and claim it 'boosts the immune system' or 'improves memory' or 'energy booster'.
While plenty of money has been made I'm unaware of any serious evidence that this has been an 'innovation around'. At best it seems like a mass placeabo effect.
I think the overall problem with government programs is not that they don't work, but that, as time goes on, they don't work very well and are difficult to get rid of. The type of companies that work best are those that are able to change course quickly, but the government is never able to do this.
That said, there is a need for some government intervention at times. Look at the railroad barons and oil tycoons around the early 1900s. Their business practices were not in the interests of the public and the antitrust work the government did was invaluable.
Possibly the best use of the government based on these arguments is not in programs, but rather in regulation. By doing things for health care like standardizing health forms (as was recently done in Utah) or forcing publication of pricing, costs can be reduced for the health care system through real competition without the burden of additional government.
It might interest you to know that the USPS has spent millions and millions of dollars over the past 15 years having outside consultants (PWC cum IBM) reform their operations. That nice little kiosk in post offices where you can buy your postage with a credit card? IBM designed that.
Imagine what could have been done with those millions if the government had simply sold off the USPS's assets instead of trying to reform an obsolete bureaucracy.