7 Nov 2011

A tale of two extremes

Alex says:
What has the government done for me lately?

Roads, highways, bridges, railroads, air travel, schools, police, firefighters, teachers, doctors, nurses, UC education, civil defense, national defense, freedom to worship, freedom of expression, speed limits, drunk driving limits, food quality regulations, biotechnology, solar panels, nuclear power, natural gas, semiconductors, microchips, jet engines, personal computers, GPS, the accelerometer, cell phones, and the Internet.
Some people will disagree, e.g., Julie Webster (via RM) told the biologists that
“Most of us here don’t give a big hoot for your salmon.”

Webster went on to say that she felt environmental regulation is the cause of many social problems in the county, including unemployment, divorce, child abuse, alcoholism and drug abuse.
 I reckon the truth is more in the middle. My reply to Alex was:
The Federal government is NOT a person that gives us stuff like Santa. It's a machine that takes taxes in and produces output.
  • Some of the output is worth less than the cost (name a few dams)
  • Other output is less than worthless (ethanol program), 
  • Other output could be done, better, by private enterprise (Amtrak, postal service), and 
  • There's some stuff that government has done well and can't be done better (law and order).
Bottom Line: Government can produce good and bad results in programs that it must or need not pursue.


Umlud said...

Re better postal service via private companies:

Looking at the postal service changes that took place in Japan after it became privatized, while the transportation of mail may have been increased, the service in the countryside dropped to almost nil.

Analogously, if I want to pick up a UPS package that wasn't actually delivered to where I live (they put up notices that were removed by others), then I have to drive to the next city -- where they have their service station -- to pick up my package within a specified 30-minute window, pay $4 to have it sent to a more local UPS store, pay $4 to have it sent to another address, or have the package sent back to the sender.

Bottom line: if the only metric of "better" is that of time taken, then private might well be better. However, if the metric of "better" is service to all of the public (not just city dwellers or businesses), then private delivery services (in Japan and in the US) are anything but.

Jay said...

The issue of the Postal Service is interesting. Article 1, Section 8 of the US Constitution provides the Congress with the power: To establish Post Offices and post roads; among a number of other things.

I do not see in the Constitution the right of monopoly for the federal government to deliver letters and packages.

Communication is clearly a vital element of uniting a society, but today's communication devices are much different from those in 1789.

How would the country be changed if the federal delivery of mail was a service of last resort for areas where market service may not be efficient or profitable? Would a regulated utility model be better for Fed Ex and UPS, or should more open competition be the general rule?

I think that in many urban areas competition would work well. Mail delivery does not necessarily suffer from the high fixed cost that utilities suffer from, except in areas with low population density.

As the USPS reorganizes due to rapidly dropping revenues innovation should be welcome.

Alex Trembath said...


Thanks for publishing my comments. You bottom line is perfect -- government can/should/must do some things and our job as citizens is to optimize the institutions and processes by which these tasks are accomplished. Likewise, government can't/shouldn't/mustn't do other things, and our job as citizens is to prevent our government officials (politicians and bureaucrats) from doing so, or democratically facilitate the transfer of services to private industry.

This is intentionally vague on your part, I think, because the debate it presupposes is a matter of degree, not category. You and I will disagree on where government action/intervention is appropriate, to be sure. But on the fundamental premise we agree: government is necessary. With that conceded, we can argue about how and why.

Thanks again!

Umlud said...
This comment has been removed by the author.
Umlud said...

Jay, while you are right about the Constitution not providing the gov't with a monopoly on the mail, and you are right about the use of alternative methods of communication other than USPS (and it would be an interesting discussion to see what the US would look like if SCOTUS had ruled that "post office" and "post roads" were analogized to fit a modern context -- like "a free press" and "right to bear arms" have not been restricted to absolute terms of the 1790s form of these things), I believe that the purpose of government is for public service, and not necessarily for profit-making nor for profitability. (Of course, if everything that were important for a safe, prosperous, equitable nation could be a profit generator, then great, but it cannot.) If we are all supposed to be equal citizens, free to choose where we live, then government services ought to have the same minimal access to all equal citizens, which includes those who choose to live in places that are far from population areas.

Of course, this could well mean that the USPS remains a primary source of mail and parcel delivery in less-serviceable areas, with USPS and private couriers exchanging and carrying each others parcels, as necessitated by local markets and company coverage.

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