At the Guardian David Ferguson criticizes calls by Cato’s Chris Edwards and others to privatize the U.S. Postal Service. The headline of the article tugs at the heartstrings:

The US Postal Service lifted my family out of poverty. We can’t let it die

And Ferguson writes:

The postal service hired my grandfather when he returned from fighting in Europe during the second world war. He was the son of a farmer with little education beyond the ninth grade. He grew up in grinding poverty during the Great Depression, but his job carrying the mail allowed him to ascend into the US’s then‐​burgeoning middle class, to save money for my mother’s college education, and to escape the legacy of poverty that had dogged his family for generations.

That’s great for the Ferguson family, but there are two obvious problems with Ferguson’s argument.

First, privatizing the Postal Service doesn’t mean Americans would cease to communicate with one another. If there’s still a demand to send letters, catalogs, bills, and packages to homes, then companies will seek to satisfy that demand. Already, with minimal competition allowed, companies such as FedEx and UPS have recently been joined by Amazon, Peapod, and other delivery services. Private companies could also deliver first‐​class mail if they were allowed to, as happens now in Great Britain and Germany. Of course, consumer demand changes. First‐​class mail volume has fallen 47 percent since 2001. With greater use of email, the volume is like to fall further. So especially in a competitive market, there might well be fewer jobs for mail deliverers. But delivery services are thriving; during the pandemic, delivery jobs have been growing faster than any other job category.

Second, “the Postal Service lifted my family out of poverty” could be said about any company, as well as any church, school, nonprofit, or other employer. Companies such as Woolworth’s, PanAm, and Enron provided jobs to millions of people over the years, as do companies from bodegas to Walmart and IBM today. It would not have been a good idea to keep Woolworth’s in business to save the jobs. Other companies proved they could serve consumers better, and competition is a key part of the economic growth that keeps jobs and incomes rising.

Economic growth involves change. Some call it “creative destruction.” Plenty of companies go out of business, which is a hardship for their employees. But new businesses are created, with more jobs and higher incomes on net. And more goods and services for consumers.

We can mourn for the old‐​fashioned small‐​town post office, as we may lament the demise of our favorite department stores or restaurants. But it does no good to protect any business from change and competition.

Commentary by David Boaz. Originally published at Cato At Liberty. https://www.cato.org/blog/open-postal-service-competition

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