Society and the Postal Service: Why Should It Have to Be Profitable?

The United States Postal Service (USPS) is on the brink of defaulting on its legally imposed financial obligations. Since 1970, USPS has been expected to act like a business and meet its obligations out of its income from delivering the mail. Unlike a business, its operations and prices are mainly controlled by Congress. The decline in mail volume is driving it into the red. It has a plan to cut its operating deficit by eliminating staff and post offices, by ending Saturday delivery of mail, and by raising prices. Thus far it has not been allowed to do any of the above. While the USPS is losing money, it is still providing a necessary function. Any cutbacks in service become politically unpopular and legislators hesitate to anger their constituencies.

Given this situation, if it is performing a necessary service, why does it matter if it is breaking even financially? Police and fire departments provide necessary services, but no one demands that they cover their own expenses. Passenger rail falls into the same category. It never quite generates enough revenue to cover expenses—but should it have to?

There are two ways to approach an answer. One is to respond with a business argument. The USPS gets no credit for the economic upheaval that would occur if they were to stop delivering the mail. There are still many businesses that still depend on mail delivery and they derive economic benefit from the constraints placed on postal rates. Think about how much it would cost legislators to send out their mailings at full price. Basically, it is not possible to convert the benefits from a social service into dollars and cents.

A more appropriate approach might be to view the issue from a broader perspective. Margaret Thatcher is famously quoted as having said “There is no such thing as society. There are only individual men and women and families.” Senator Jim Webb, in Born Fighting, his paean to his Scots-Irish cohort and ancestors, decries the influx of “Catholics, members of the Orthodox churches and Jews—all professing....communitarian social values at odds with the individualism of the traditional Anglo-Saxon and Anglo-Celtic culture.” One can define communitarian values as those driven by a sense of group solidarity, and Webb seems to be saying that those who believe in such values are foreign intruders in his Tea Party Nation.

The difference between communitarian and individualist philosophies might provide a convenient way to differentiate the current philosophies avowed by the Democratic and Republican parties.

Tony Judt penned a most fascinating discussion of the issues facing society today in an article in the New York Review of Books: What is Living and What is Dead in Social Democracy? He claims that we have lost the ability to talk coherently about issues related to society.

“For the last thirty years, in much of the English-speaking world (though less so in continental Europe and elsewhere), when asking ourselves whether we support a proposal or initiative, we have not asked, is it good or bad? Instead we inquire: Is it efficient? Is it productive? Would it benefit gross domestic product? Will it contribute to growth? This propensity to avoid moral considerations, to restrict ourselves to issues of profit and loss—economic questions in the narrowest sense—is not an instinctive human condition. It is an acquired taste.”

This “propensity to avoid moral considerations” was never more evident than in the arguments over healthcare legislation. The administration claimed that the new law would help millions of people. No one cared, perhaps not even the millions of people involved. The only arguments that carried any weight were those focused on “what will it do for me?”

Getting back to the Postal Service, there will be calls to privatize it, claiming business will know how to run it properly. But those will be false arguments. The USPS cannot turn a profit because it cannot escape from its social responsibilities in terms of service; a private company will face the same dilemma. As always, we would end up subsidizing the private company, either directly or indirectly, and we would have the added burden of making sure the owners become wealthy.

Judt fears a reversal of all that made Europe and the US strong after World War II.

“If we deal uniquely or overwhelmingly with private agencies, then over time we dilute our relationship with a public sector for which we have no apparent use. It doesn’t much matter whether the private sector does the same things better or worse, at higher or lower cost. In either event, we have diminished our allegiance to the state and lost something vital that we ought to share—and in many cases used to share—with our fellow citizens....Between state and individuals there would then be no intermediate institutions or allegiances: nothing would remain of the spider’s web of reciprocal services and obligations that bind citizens to one another via the public space they collectively occupy. All that would be left is private persons and corporations seeking competitively to hijack the state for their own advantage.”

The Great Depression and World War II were horrific events that taught people "communitarianism" (social democracy if you prefer) was necessary for survival. Easy living has allowed their children and grandchildren to forget that lesson. Many would conclude that persons and corporations have already hijacked the state.

So let us demand efficiency, but keep the Postal Service as “our” institution. Let’s cherish and nourish our public schools. If the trains don’t make money, then we should shrug and at least demand that they run on time. Perhaps if we think in terms of caring for each other now, we can avoid a calamitous need to care for each other in the future. Given the state of the world economy, “hard times” could return.