Source: EconLog
by Christopher Freiman
“Given the news that the U.S. Postal Service could be privatized, it’s a good time to explore why privatizing mail delivery and opening it up to market competition is a wise idea. To start, it’s helpful to consider cases where privatization might be unwise and why mail delivery is different. In particular, many economists and political philosophers are skeptical about privatizing public goods — that is, goods that are characterized by nonexcludability and nonrivalrous consumption. … this argument doesn’t speak against the privatization of the post office. Mail delivery isn’t a public good. Critically, mail delivery is excludable — delivery companies can restrict their service to paying customers. If you don’t buy a DoorDash subscription, DoorDash won’t deliver your food. If you don’t pay FedEx to deliver your parcel, it won’t deliver your parcel. Indeed, if you don’t put a stamp on your letter, the United States Postal Service won’t deliver it.” (01/23/25)