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You’ve Got Mail?

Mar 3, 2012 • Behavioral Economics, Businesses, Demand, Supply, and Markets, Economic Debates, Economic History, Government, Households, Innovation, Labor, Macroeconomic Measurement, Thinking Economically, Uncategorized • 213 Views    No Comments

While the U.S. had postal services since the 1600s, Ben Franklin transformed the system. Appointed Deputy Postmaster for the Colonies by the British, he established our first home mail delivery system, diminished to a single day the letter delivery time between New York and Philadelphia, and to 6 days between Philadelphia and Boston. When the British fired Franklin for his rebellious political activity, the postal system was making a profit.

Is it possible to bring Ben Franklin’s spirit to today’s USPS?

More than 2 years ago, the Washington Post expressed an answer. Comparing creative innovation from a privatized Swiss system to tired thinking from the USPS, they said we are dealing with a hybrid entity “hamstrung by a large and heavily unionized workforce, congressional management, and an antiquated business model.” We could add that George Mason economist Tyler Cowen tells us that we have been sacrificing new ideas and cost efficiencies because our Postal Service is a “privileged quasi-monopoly.”

A Postal Fact: 12345  is GE’s zip code in Schenectady, NY

The Economic Lesson

A controversial idea: Defined on Planet Money, a public good is “something that we all need that will make our lives better, but the market will not and cannot provide.”  One podcast example of a public good was the benefit provided by a lighthouse. Maybe the US Post Office is very different from a lighthouse.

An Economic Question: Should mail delivery be a public good?

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