Re: [NTLK] [OT] USPS

On 22/7/09, James Fraser wrote:
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>the more mail I move, the less I can charge for it.
Indeed. Or better said, the less one needs to charge per item to
cover ones costs, due to simple economy of scale, especially labor
costs. That's what I've been pointing out.

Regarding UPS vs. USPS and manilla envelope, the size of the envelope
makes little difference to USPS rates, especially in comparison to
UPS' rates. It's clear UPS can't charge so little for first class
because they don't have bulk mail to spread costs onto.

>I was led to understand DMA has lobbied so First Class picking up
>the tab for them

I wouldn't be surprised DMA has pressured bulk mail prices lower than
they would be without their efforts, and first class may perhaps be a
bit higher as a result. But the simple fact is bulk mail covers the
bulk of USPS costs. I don't know the relative proportions whether
it's cheaper overall to send bulk mail than first class in proportion
to their percentages of total mail, but given the different prices
it's highly likely if not obvious first class users pay
proportionately higher. But first class users use way more clerk time
buying a few stamps at a time and sending just one item at a time
compared to bulk shippers, etc.

We agree the cost of distributing first class would be much higher
per item without bulk items.

The main point is without the bulk mail monopoly first class would
cost many, many times more, maybe even 20 to 50 times more.

It seems highly unlikely if not impossible that eliminating the USPS
monopoly would result in lower First Class costs, since bulk mail
would be split across multiple private sector providers.

>I would like to see people bear the costs they actually incur, as
>opposed to being forced to subsidize the costs that *other* people
>incur.

Regarding bulk mailers, if in fact it costs them anything, they
undoubtedly pay at most a very small percentage more to subsidize
first class. While many might resent any such cost, I'm pretty sure
the benefits to society overall make any such marginal cost to bulk
mailers well worth it for them as well. For instance, one first class
note recommending a product is worth many times more commercial
flyers and ads.

You may know cost accounting is by far the hardest type of
accounting, requiring way more research than any other, and
ultimately it's futile because one has to draw virtually infinite
lines between costs one considers relevant and not.

Many nowadays like to believe economics is totally cut and dry and
everything financial and economic can be reduced to straightforward
numbers. But there are endless human costs involved one can't
quantify. For example, borrowing and advances (e.g, venture capital)
have always been integral to economic activity, but include factors
like risk that one can attempt to calculate but ultimately cannot be
defined with mathematical precision.

If most of us had to bear our fair share of the capital costs of
technological society, very few people would be able to afford it,
especially if one includes the largely intangible human costs.

Fact is humanity is the great beneficiary of every real technical and
economic innovation. The Wright Brothers made an incalculable
contribution to human life. In return they received an almost
infinitesimal proportion of the value they created. The proportion is
many times smaller for Gutenberg.

One can demand others pay their fair share, whatever that is, once
one has started doing so oneself. All my hats off to you if you can
figure out how much that would be.

B

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Received on Wed Jul 22 14:11:43 2009