Sociocrat proposes ‘Bit tax’ to Save Post Office

March 11th, 2013

Here on the left coast we refer to Berkeley as “Berzerkeley.” It’s both a University town, and one of the last bastions of the Haight/Ashburry nomadic fade ranger culture. It’s really a wild card in California’s left-of-Democrat political culture. So, sometimes Berkeley City Council makes amazing and radical proposals like declaring Berkeley a “Drone Free-Zone” even if it’s largely symbolic, and other times they propose asinine Nanny State laws that belong in the quiver of Michael Bloomburg, like last year’s plastic bag ban that’s now sweeping California like a plague.

The most recent proposal from City Councilmen, Gordon Wozniak definitely belongs in the Bloomberg-esque category. Wozniak has proposed taxing emails to “provide much-needed revenue to the ailing U.S. Postal Service” and reduce spam.

Lysander Spooner, thou art avenged!

Lysander Spooner was a nineteenth century American entrepreneur, abolitionist and anarchist. Although he predates the term, in many ways Spooner was America’s first Agorist, and it’s no accident that chose the Post Office to compete with. In Spooner’s view the State monopoly on mail services was an unjust intervention in the market, and lead to excessively high postal rates. So, Spooner started the American Letter Mail Company to illegally compete with it. He may not have won the legal argument, but he won the economic argument, providing faster deliveries at lower prices, until the State shut him down.

The Post Office doesn’t have a complete monopoly anymore, but it also doesn’t compete on a level playing field either. To stay open, other delivery services must remain profitable despite the innumerable taxes they are forced to pay, while the Post Office continues to lose money despite the exorbitant subsidies they collect. The Post Office still enjoys a legal monopoly on First Class Mail, and they lost more than $15 billion last year.

Spooner would say the problem is market intervention, that the Post Office fails because it lacks market signals and market competition. Wozniak on the other hand says the problem is email. A cheaper and faster service exists, and rather than improving the Post Office, he proposes turning the Post Office into a parasite on the superior service.

Wozniak told Berkeleyside, “Since many billions of e-mails are sent every day, an e-mail tax could raise substantial sums.” It’s a classic Statist fallacy. He imagines that market behavior will not change in response to State aggression. It’s funny really. There’s no functional difference between a fine and a fee, yet somehow Sociocrats imagine that fines create a disincentive that reduces a behavior, but fees they imagine have no economic impact whatsoever, except magically generating revenue.

Wozniak told CBS Berkeley, “The internet being free gives it an advantage which is impacting the post office negatively,” he added, “The bit tax is a pretty painless way to help even the playing field.”

Doesn’t it just make you want to puke? “Even the playing field” he says, even though the Post Office has every advantage over the private sector. By his logic FedEx and UPS should demand a tax from the Post Office because their monopoly on First Class Mail impacts them negatively, and isn’t an even playing field. Can you imagine if every private service provider demanded a tax from the free public service to even the playing field? Private schools should demand a tax from public schools, because being “free” gives it an advantage that impacts private schools negatively. Private security should demand a tax from the Police Department, because being “free” makes it not an even playing field.

Email is not free. It’s often free to the end user, but that’s only because the business model of most email providers is different. The Post Office has equal access to that business model. That’s why it’s an even playing field. Let the Post Office provide it’s own email service if it wants. Let them try to do it better.

Not only is the bit tax a terrible idea. It’s completely unworkable. It’s like Wozniak has no clue how the Internet works. First off, email like alternatives already exist. Facebook has a messaging service. Message boards exist. Text messaging exists. And if the email tax ever passed you’d instantly see a dozen more workarounds appear overnight. If the need appeared, it wouldn’t surprise me in the least if some entrepreneurial programmer devised some way to piggyback a free email service on the back of the Bitcoin network, or simply developed a similar network built on the same principles. BitMail anyone?

With just the slightest pinch of innovation the Post Office could provide truly unique market services to save themselves. For example, off the top of my head, imagine if the Post Office issued email addresses associated with mailing addresses so customers could send an Email to elderly people, and the Post Office would print it out, stuff it in an envelope, and send it to them in the First Class Mail format they are accustomed to.

Presto! It would generate revenue, create jobs, and provide the unique snail mail experience they’re trying to rescue. I just saved the Post Office!

So, why is it that it takes me about 30 seconds to come up with a superior idea that legions of tax sucking sociocrats can’t come up with after hundreds of hours of committee meetings? Because they don’t have the incentives. They aren’t economically punished by failure. They are subsidized by failure. In the post office, bad ideas lead to increased revenue, and you get what you incentivize. Is it any wonder the leading proposals to save the Post Office are cutting Saturday delivery, increasing junk mail, and launching a USPS clothing line. These people are out of touch.

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About the Author: Davi Barker

In grade school Davi refused to recite the pledge of allegiance because he didn't understand what it meant. He was ordered to do as he was told. In college he spent hours scouring through the congressional record trying to understand this strange machine. That's where he discovered Dr. Ron Paul. In 2007 he joined the End The Fed movement and found a political home with the libertarians. The Declaration of Independence claims that the government derives its power “from the consent of the governed." He does not consent.