The Post Office, along with the DMV, is a favorite target for proponents of small government. The reason I am going to rehash some of those arguments in favor of privatizing the Post Office is that it happens to be a very concrete example of a government program that can be made better and less costly by taking it out of Washington’s hands.
One of the primary arguments for a government-run Post Office is that if it is placed in private hands, there is no guarantee that everyone in America will get mail service. A for-profit company may decide that it is simply not rational to deliver to Nowheresville, Montana. This is undoubtedly true, but not the problem that some believe it to be.
When I send a letter through the Post Office (which holds a monopoly on First Class mail), I pay the same price no matter what its destination is. However, the cost to the Post Office is very different depending on where it is being mailed. Paying a mailman (and an entire Post Office branch) to deliver to a town of 300 people is very expensive. Yet the people living there pay no more to receive or send letters than I do, despite the fact that I live in the eighth largest city in America.
In effect, I am subsidizing the mail service of those individuals who live in these rural areas (and those who send mail to them). A private company would naturally charge higher rates to those who cost them more. This price discrimination would allow them to lower the price for people like me, making First Class mail cheaper than it is now. Mail service would still exist for those that live outside of big cities, but its price would accurately reflect one of the costs or living in the country instead of the city.
One of my favorite arguments for the abolition of the government-run Post Office is the absurd practice of not delivering mail one day out of the week. If private companies were allowed to compete with the Post Office, I have no doubt that competition would immediately push providers to deliver all week long. This would benefit everyone, and the only reason it does not currently exist is because there is a government mandated monopoly.
This is an interesting idea…E-mail systems have been slowly replacing hard-copy mail for some years now. It is widely believed that electronic communication is the reason behind the constant increase in postage rates the past few years. Some have argued that the Postal Service is a failing organization and will be obsolete within the next decade. To add to this, the USPS can’t stand up to UPS/Fed-Ex (private! companies) on any level. This prospect is bound to unleash a fury of government waste; they will undoubtedly feel the urge to save yet another organization that was either mismanaged or going under anyway…But your proposal is a good one should the USPS survive: privatizing the Postal Service can lead to more specialized service for certain people in the country.