Subject: Why the USPS Does Not Turn a Profit
Date: Sun, 9 Oct 2011 16:03:21 -0400
May I make a minor, but important, correction to Mr. Robert Vergruggen's otherwise excellent essay on the USPS titled "Dead Letter". The Post Office does not negotiate sustainable labor contracts with its unions and its unions have no concern over the terms that they demand not because the Post Office is a monopoly, as Mr. Vergruggen states, but rather because the Post Office is not a private company with private property to protect. If the Post Office were a private company with a government-enforced monopoly over first class mail delivery, it still would have to turn a profit or go out of business. Its shareholders would demand that the company turn a profit or, if that appeared to be impossible due to government interference in the labor market or union intransigence, they would demand that it cease operations and liquidate in order to preserve at least some capital. This is why private companies do a better job of negotiating labor agreements than public ones, and it is the same reason that capitalism is sustainable; i.e., those entrepreneurs who do a better job are rewarded with more capital to manage at the expense of those who do a poor job. So private firms go from strength to strength while public firms' deficits grow larger and larger.