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Friday, July 15, 2011
As I am reading through my Adam Smith (once again), I come across this ditty:
It turns out that the Post Office is not an automatic profit maker - ours isn't in the US, I don't believe, and I think Sweden(?) privatized theirs recently. My point is that Adam Smith took the post office to be a good profit center for the state and 225 years later the unions, bureaucrats and the general inefficiency of the state monopoly seems to have proven him wrong (at least in practice).
Smith: Wealth of Nations, Book V, Chapter 2 | Library of Economics and Liberty
USPS receives no net government subsidy for its normal operations. It does receive some federal funding for the services it provides for the legally blind and for the delivery of absentee election ballots. Part of its legal mandate (Postal Reorganization Act of 1970) is that it actually NOT make a profit. Congress must approve all rate increases, and denied a rate increase to 46 cents in 2010.
The USPS is also one of the few agencies *explicitly* authorized to the government in the constitutions (as opposed to implicitly under the "necessary and proper" clause).
Yep - but Smith thought the post could be used by the state to make money. if our USPS was not mandated to be zero profit do we think it could turn a profit?
I do not think the post office is all that bad. The government does deliver the mail for the most part without a problem.Post a Comment
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