Privatize the Post Office: Press Release

Released On: April 5, 2002

Statement on Postal Rate Hikes
Dr. Edward Hudgins, Washington Director

The U.S. Postal Service soon will hike its 1st class rate from 34 cents to 37 cents. The reason often given is to cover costs of the anthrax attacks and the need for a more secure postal system. While these are genuine concerns, the Postal Service’s problems are much more serious and deeper.

Well before the anthrax attacks the General Accounting Office was projecting that the Postal Service would lose $1 billion to $2 billion annually for the next decade. The rate hike request was put in before the anthrax attacks of last year. It is instructive to compare the response of the Postal Service to its drop in revenue in light of the economic down turn and terrorist attacks with the response of private businesses. The latter often cut prices to keep customers and reduced the workforce to hold down costs. USPS hikes rates and makes no major changes to the workforce. Private companies must pay attention first and foremost to customers and shareholders. The Postal Service worried first and foremost about its managers, unions and political opinion. The problem with the Postal Service is not managers or workers as such but institutional incentives that do not put customers first.

In its new Transformation Plan the Postal Service suggests three alternative future structures: a government entity; a privatized corporation; or a commercial government enterprise. But the only real option is to privatize the Postal Service.

Over the past decade the German government has restructured and streamlined its Deutsche Post as a joint stock company and sold public shares in the company. It the future the remaining shares of the company will be sold to private owners and the mail monopoly in Germany eliminated. Deutsche Post has become a major company offering integrated service and international logistics. The U.S, Postal Service should follow the same path. Only then can Americans be offered the best cutting edge services for the twenty-first century.

The Objectivist Center is a national non-profit think tank promoting the values of reason, individualism, freedom and achievement in America. For more information about the Objectivist Center, please visit www.ObjectivistCenter.org.

NOTE TO EDITORS: Dr. Hudgins is available for interviews. Photo available.

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