Good Intentions

I find it funny that some people equate wish lists and good intentions with actual results. People will sit in their armchair and declare the things people ought to have and they seem convinced that simply by uttering these words, those things will become reality. These people must think they have god-like powers. A simple utterance will change all of society and in the process change law of economics as necessary.

It is very common to hear things like "People deserve a living wage, not minimum wage", "Companies should all provide top-quality health insurance to every employee", "A car is not a luxury, it's a necessity in our everyday lives", "Let's stop using fossil fuels and change to something green like solar panels."

These declarative statements are made in a vacuum, away from pesky reality. People who simply state that these desires cannot simply appear without other consequences are someone seen as bad people.

On the other hand, people who propose such measures without doing anything whatsoever to actually make them happen, are applauded as farsighted visionaries who really care about "society".

Sensible people on the other hand recognize that in the world there are rarely absolutes when it comes to economics. In reality, everyone makes decisions based on costs and benefits. It might be nice to have solar power, but if your electricity bill goes from $120 a month to $800 a month, you may think twice.

Another point is that the do-gooders who propose these utopian ideas never also advocate freedom of choice. They will only advocate some "advancement" of society if it affects everyone the same, and it doesn't personally cost them anything. Also, some believe in the fairy tale that the "government" will pay for it so they are off the hook. Ironically, they don't realize they themselves must fund the government in the first place.

One example of this is Obama is trying to force employers to buy health insurance for ALL employees who have a certain number of hours per week. The cut-off is now 30 hours. This even applies to the jobs with the lowest wages. The owner of Papa John's Pizza said he couldn't afford it, so he will instead reduce hours of employees to perhaps 28 hours per week so they are not considered full time.

At first, the owner of Papa John's may seem heartless, but there are many things which need to be considered. The pizza business, unlike government, does not operate in a fairy tale land of rainbows and butterflies where reality changes by simply uttering words. If Papa John had to provide health insurance to even the lowest level employees, it would effectively be a major increase in minimum wage. That would dramatically increase the price of pizza. A few things would happen. First of all, he would fire a bunch of employees because as price of pizza increases, demand decreases. Those most affected would be the lowest level employees with the fewest skills. While their productivity might justify a wage of $7.50 per hour, it may not be high enough to justify $11 per hour when one includes health insurance. So now, not only do these employees not have health insurance, they don't have a job.

Ultimately when it comes to wages, any additional benefits including health insurance, employment insurance, etc. will come together to give a number. Even at minimum wage here in Newfoundland, where it is $10 per hour, a company might end up paying $18 an hour once all the additional benefits are paid for. This is the number employers look at when deciding if they need more people. Mandating additional benefits to employees raises their real wage. As the real wage is artificially inflated, demand for lower skilled workers diminishes. Certain jobs may disappear altogether.

I went off on a long tangent about wages there, but it is simply to illustrate the point that there are no government actions on the economy which have purely beneficial consequences. Every benefit has a cost. One cannot simply look at the benefit and ignore the cost. And in almost every case I've yet come across, the cost far exceeds the benefit.

Why Only Lower Small Business Taxes?

In watching the presidential and vice presidential debates I notice whenever they talk about lowering taxes for businesses, they are quick to point out it is for small businesses. Same thing in Canada. During political debates, they tend to focus on small businesses, while big business is vilified. It's usually said that big businesses should be taxed more because of their profits. This position makes no economic sense to me. But maybe that's the point. It's probably just another political way of gaining support. People image small businesses as being run by ordinary folks just trying to eke out an existence. On the other hand, "big business" is run by shadowy Wall Street figures who we never see in real life who live in Bel Air Mansions and have several servants. A couple of generations ago, these guys were depicted in cartoons as very rotund men who always wore top hat and tails and smoked a cigar. There is a HUGE flaw in this reasoning though. Think about the ordinary everyday products we buy. For example: Kellogg's cereal, Ivory soap, Hanes underwear, Cottonelle Toilet Paper, Esso Gasoline. These products are all manufactured by big businesses. Taxing these companies will only increase the price of the most common goods we buy. This will especially affect poor people who buy most of their products from large companies. On the other hand, small businesses, especially in the United States and Canada, often produce goods which are specialty items, whether specialty clothing, unique leather bags, fancy cars, etc. Who buys these products? Rich people! So ironically, by taxing big businesses at a high rate but letting small business off the hook, you are only helping the rich and hurting the poor. Talk about unintended consequences. Large companies have many attractive features which should be encouraged. They are able to take advantage of economies of scale. By producing in huge quantities, they can lower the cost per unit. Processes are streamlined. Also, large companies can make huge investments in facilities which are able to produce things quicker and easier. Taxing away this money will take money away from increasing production. Many people have a negative feeling toward the high profits many large companies seem to make. This should not be a cause for concern, however, in a free market. High profits entice competitors to enter the market. In order to maintain a high profit level, companies must be that much more efficient than their competitor. Otherwise, they will be priced out of the market. Profits, numerically speaking, may seem high. But often profit expressed as a Return on Investment, is not so extreme. In fact, it is very often much higher for small businesses. A small business might earn a 15% ROI out of total revenue of $1 Million - in other words, $150,000. On the other hand, a large company might make only 8% ROI, but when it out of $1 Billion revenue, it comes out to be $80 Million profit. Numerically this is much bigger and seems much higher to people, but the rate of return is in fact lower. The bottom line is, higher taxes on big businesses will not help the common man, but will indeed hurt him more.

Who teaches our children?

Who, I ask, has the primary responsibility and duty to teach children? My answer is the parents. What's your answer? I'm willing to bet most people would not answer "a private organization with a particular agenda". Well, unfortunately for people in Canada, the latter is the case. This private organization is called a union and the vast majority of teachers, especially public school ones, belong to these.

There was a time when unions were just an economic idea for collective bargaining. It allowed groups of people to come together to get a better deal for themselves, and the theory is there is power in numbers. The workers vs. the owner is better than a single worker vs. management. That's the theory, although I do not agree with it.

Anyway, my point is that used to be the case. No longer. Unions now have official positions on countless issues. For example, they may be pro-Palestine and anti-Israel, they may be pro-gay marriage, they may be officially in favor of teaching children about all kinds of sexual perversion before the age of 10. And parents have no say. Every teacher in every public school MUST adhere to these ideologies, even if they have nothing to do with education. The union can determine who can or cannot be a member. Members dues are often used to fund many of these positions.

The idea for this article came about when I read that BC teachers are now officially opposed to the Northern Gateway Pipeline. This is the official union position. I have no idea why a teachers union would need to have a position on this in the first place, but that's how it is. They will then use this power to make sure every child is taught that the pipeline is a bad thing and they should be against it.

This does not sound like a free society to me. It sounds like a few people in charge of dictating what children will learn. Math and science typically don't have much debate. It's on these other issues which have legitimate disagreement. There should be freedom in this area. The only way to correct this problem is to allow school choice and end the enormous powerful teachers unions and their influence over children.

Romney

Of the two candidates for American president, I prefer Romney. However, I still have many issues with the Republican candidate. Part of the problem is inherent in our modern conception of politics. When the rubber hits the road, people vote for the candidate that will benefit them most personally. Promising benefits to a voter, even at the expense of others, will still get a vote.

So Romney, like Obama, has set about to give promise after promise about how he will make your life better. Romney will improve education, he will get you a job, he will spend more on military, etc. He claims to be all for smaller government, but this claim is hard to sustain when he is also promising everyone more from the government.

I applaud Romney for wanting to liberalize the economy, but it's really just skimming from the top. In theory, Romney is more in favor of the free market, but his advocacy of it is only as strong as the people will stomach. Obama on the other hand truly believes in socialism. He believes the government is always the solution and that if things don't work out, the government simply needs more money or better people.

This is why I am skeptical of the conservative-liberal paradigm. Both are fundamentally the same in believing they will use the coercive power of the government to "make things better". They both fundamentally believe the government just needs smarter bureaucrats, that departments just need more funding etc.

That's why I am a fan of Ron Paul. He wants to reduce government, not make it bigger. He is already skeptical of the gov. to make things better. He would rather let people be as free as possible. Meanwhile, the two dominant presidential candidates disagree with this. They want the power of government to fix the economy, something I think is impossible.

IT DOESN'T MATTER WHAT YOU THINK!

Democracy can be quite annoying! Canada has always striven to be free, at least historically. Freedom and democracy are often incompatible. Unfortunately, rather than individual liberty, Canadians now seem to embrace the idea of collectivism and socialism. We have drunk deeply from the cup of democracy to the point where we think we can and should vote on everything. Instead of freedom, we believe in imposing our will on everyone else and controlling their lives for their own good!

People must be free to make their own decisions, even if everyone else thinks they are wrong. Unfortunately no one thinks like this anymore. People will say something should be banned simply because they disagree with it. They think certain religious practices should be outlawed because they don't personally like them. They want certain foods to be banned because they are unhealthy. They think to take away someone else's freedom is totally acceptable as long as it is the "right" thing to do.

This is a total perversion of freedom. We have to ask the government permission every time we want to be free, and a handful of "experts" will inform us if we can make that free choice. Does no one else see the irony in this?

It's like freedom of speech. You cannot dictate that freedom of speech only exists if we are sure those using it will use it for some good purpose. The whole idea behind free speech in the first place is that some people will abuse it, but this is part of the risk we must take.

The point is, you cannot limit freedom because you think you are somehow doing someone a favor. How is this different from communism? So when you are in a discussion about a particular subject, the pertinent thing is not whether or not you "like" something, but rather whether or not you want freedom for yourself or others.

Does the GOV own everything?

There are two rival ideologies. According to the first, people are the masters of their own domains. If you go into the forest with the permission of the land owner, use an axe you bought to chop down a tree, and sell the wood, then you are entitled to the proceeds from that sale. This is not because anyone authorized you to have those proceeds, but it is a human right that you own what you produce.

This ideology is countered by one which is becoming very popular which says the government owns everything. It owns your forest, it owns your saw, and it owns your labor. It essentially owns you. At the end of the day, it is up to the government to decide how much of what you produced you can keep. People who espouse this point of view do not see any level of taxation as inherently wrong. They only consider what they believe to be most effective.

According to those who espouse the second point of view, if a planned socialist economy worked "best", then the government has the full ethical right to establish it. People are simply cogs in a giant wheel. You do not own anything, you are simply a government employee.

Few people nowadays seem to make arguments about this from a moral perspective, rather they focus on a practical perspective. Increasing taxation is only bad if it has negative consequences, which are defined by those who advocate this point of view. I believe a strong case can be made from a moral standpoint. We can start by someone explaining to me how taxation is not a form of theft. First, define theft and then explain how that is not what the government is doing.

California wants to ban gay-to-straight therapy

In another example of government overstep, California wants to ban any group which has as its goal to change people from gay to straight. Think what you like about this endeavor, the bottom line is the government is using its police and military to stop people from voluntarily associating and transacting business. The government is not meant to be thought-police and the types of therapy you receive should not be banned simply because some government officials have a different point of view.

Government Investments

Newfoundland set up a fund to attract new business to the province. Earlier this year it was revealed that 98.5% of this fund went unused. Companies did not come here to do business despite this bribe. Despite this, I'm sure there were many people hired in the "business department" to attract new business.

Just more government spending gone down the drain as usual. You see, the government should not be "investing in anything.". If someone in the province wants to make money, let them invest their own money. It should be a free choice, not money stolen from me to invest in some rinky dink company from around the bay.

Besides the theft, how does the government even know how to invest the money? Where do they get the handful of "experts" who will know which businesses to invest in? Two things can be said about this:

1) Gov. officials probably don't know much about business investment. If they did, they would not work for the government.
2) Any money that is invested is probably not done so on the basis of profitability, but rather done on the basis of some vague notion of regional development. Maybe an MHA wants to bolster his reputation in a particular area so he will invest there. Or maybe some industry is highly visible to the public and will make the gov. look good. These are the most likely reason politicians invest.

The bottom line is, I don't want a bunch of bureaucrats who can't make it in the real world to invest my hard-earned money in order to get more votes.

Right to bear arms

Okay, so in the states people have the right to bear arms. In Canada, we do too, but it's not as publicized and I think there are more restrictions.

One things I've never understood though is the distinction between different types of guns. Sometimes semi-automatic and automatic. So people will say "who needs an assault rifle anyway?" So they will propose banning the more powerful guns.

But I don't get this logic. I mean a small gun can kill people, perhaps many people. A semiautomatic weapon could kill many people no problem. Yes, an automatic weapon could probably kill even more people, so that would mean the logic is this:

1) killing a handful of people is bad but not that bad. people have the right to do this.
2) killing a bunch of people is really bad and the government should ban weapons which can do this

So what I don't get is the logic. "Who needs automatic weapon?" Well, maybe you need to kill a bunch of people, or you want a powerful weapon to kill an individual and that will allow you to do it more easily. I mean the point of having the right to carry a firearm is not just for hunting, it's for killing people if necessary.

So if the intent is to kill someone who is threatening your life, what difference does it make if you kill him with a handgun or an AK-47. He's still dead. An AK-47 doesn't kill him "more".

Maybe what these people are really saying is that no one should ever have a weapon to possibly kill someone else. That's another debate. If that's what they are saying, they should advocate a total gun ban, not just the more powerful ones.

Anyway, I don't think guns should be banned at all.

Green movement has it wrong

I hate to be the garden at your skunk party, but I think the green movement has it wrong. The whole idea now is to "reduce" what we use. I know reuse and recycle are there as well, but it's really all about reduction. Reusing and recycling generally come with some reduction in quality. I'll just address those two briefly first. We are told to use crappy paper products or cheap items in general because they use "recycled" material, sometimes as little as 5%. We are expected to make this sacrifice for the good of "Mother Earth".

Reusing is a similar concept. "Sure a new product would be better and you would prefer that, but just reuse the old one to help the environment".

But most of all, it's about reduction. It's such a simple answer. Use less electricity. Get shorter showers, maybe in cold water. Wash your clothes in cold water - it will reduce the quality of cleanliness, but hey you're helping the environment. Buy a smaller car, even though it's more dangerous to drive and not as comfortable. Don't drive as much in general, instead walk or bike even though you don't want to and it takes much longer. Use public transit even though it takes much longer to get where you're going and they are probably worse on the environment anyway. Don't eat meat or eat very very little, that way you can eat all vegetables and that's better for the environment.

For the first time in hundreds of years, people are supposed to be lowering their quality of life rather than improving it. According to some environazis, we haven't gone far enough until we live naked in the wild.

My contention is, we are barking up the wrong tree. Instead of demanding that everyone lower their quality of life, we should be finding new innovative ways to increase our quality of life and levels of consumption. In fact, the free market is the best way to do this anyway. The price system guides people from rare products to abundant ones. The free market always seeks efficiency. Whenever energy or products are lost, this is lost profit. Increasing efficiency saves money.

I like the new innovations in cars, but let the market work. You don't need to use peer pressure to force people to drive hybrid cars. Once the technology improves enough and it becomes a cost-saver, people will automatically buy into it.

The ironic part is that the solution most people propose is to extract money from successful companies and just pay people through the government to operate a certain way. If a company is charged millions of dollars in taxes, that's millions they can't spend on R&D and responding to the demand for more fuel-efficient cars. The government does not innovate. It simply steals money from one group and gives it to another. If the government steals $10 million from a car company and then gives a rebate of $10,000 to 1000 drivers to buy a hybrid car, this does not provide innovation. The car company could have used that $10,000,000 to research new and better ways to produce fuel efficient cars.

Anyway, my point is that people will buy into things once they make sense economically and meet their needs better. Redistributing wealth does not create innovation. The free market loves to innovate. There is already a market demand for environmentally friendly products. It's pointless for the government to take money from the economy that could be productive and effectively kill its productivity.

Also, making cheap products artificially more expensive mostly hurts poor people. It's all fine and dandy for celebrities to talk about the benefits of hybrid cars, but poor people need cheap vehicles and once they establish themselves, they can move on to more fuel efficient models.

Let's work to increase quality of life instead of decreasing it while also pursuing our interests in the environment.

More propaganda than the USSR

The USSR had propaganda, but everyone knew it both inside and out of the country. Eventually the overlords were ousted and people reclaimed their country. But we in Canada have been indoctrinated so well that we don't even realize we are being ruled over. We've been brainwashed into believing that we are as free as the birds because of "democracy".

The government takes our money to pay for schools, and makes other schools illegal. In these schools, students are taught how the government makes everything good and that we all owe the government a lot. We are told this is "our" government and that we all have democracy which makes us free.

So we all fall for this propaganda. It's much smarter than Soviet propaganda because we feel like this is what we've chosen, it's democratic. If we don't like it, we can simply change it!

In reality though, it's only the dictatorship of the majority. 51% of people can vote against my freedom and because we're a democracy they win.

Do I get freedom of speech? Depends - does the democracy approve?
Do I get freedom of religion? Again, it depends on what everyone else decides.

But none of us is really free. Who likes paying double for their milk? Nobody. So why do we have a government-enforced monopoly on milk which keeps the prices high? Not because everyone wanted it. It's because we are forcibly taxed for thousands of things. We do not have the time, energy, or resources to fight every individual expenditure or law. But the milk producers have a huge interest in making their voices heard and having legislation passed in their favor. They then pay for advertising to convince us. They also pay off politicians to run on their platform. Everyone else barely notices.

This happens in a thousand ways. All political parties are beholden to the interests of companies and unions, not the people.

The USSR was obvious. People felt oppressed and eventually it backfired. What Canada did was much smarter. Satisfy people with the illusion of freedom then take power.

Anti-discrimination laws

I'm opposed to all anti-discrimination laws. I believe in personal freedom. It's easy to advocate laws which you happen to agree with, to give the government the power to enforce them. But what happens when the government turns against you and violates your rights?

No one should be forced to serve anyone of any particular characteristic if they choose not to. It is their money and they can spend it however they like. Should I also be forced to be friends with people I don't want to associate with?

What gives you the right to force me to act or associate with anyone? Who are you? Are you my overlord? Must I bow down before you?

Having said that, I think a business would probably make a bad decision by discriminating against any particular group. They would probably lose a lot of business. But that's their choice to make.

People should be free to live how they see fit, without another group of people trying to reign over them.

Also, what one person calls unjust discrimination to another person is just discrimination. Catholics only want male priests. To an atheist, this may appear nonsensical, but Catholics have the right to do as they please. What right does an atheist have to dictate to the Catholic Church who it can or cannot hire. This is an example of something which may seem just to one group but unjust to another.

You see, when we try to be dictators, everything seems fine and dandy until the laws stop working in our favor. When we become dictated to, it's less pleasant.

Should education be free?

Some people nowadays say that education is a right and that it should be free. But I disagree with this point of view. First of all, statements like "education is extremely important" is too general and is effectively meaningless. A more meaningful statement would be something like "everyone should have free access to education up to grade 10" or whatever.

The next problem is: who pays. The primary beneficiary from an education is the educated person. So they should pay the bulk or all of the cost. This is only logical. Yes, interacting with someone with a certain level of education may also indirectly benefit me or society at large, but primarly education benefits the recipient of it.

Just because something is beneficial doesn't give "society" a carte-blanche to steal money and redistribute it for this cause. Many things have indirect benefit to society such as better nutrition or mobility. Does that mean the government should also take money to pay for cars and food for everyone?

The fact of the matter is that education has a cost. There is NO SUCH THING as free education. But when something is offered free, there is often misuse of it. If I could have any car and government would subsidize it by 80 or 90%, obviously I would pick a very expensive one because I am only paying for 10 or 20% of it. Underpricing any product or service causes exaggerated demand. I know so many people who have gone parts of degrees or done completely useless ones which they will not use. Is it even possible that instead of stealing money from citizens to pay for these misused classes, the citizens themselves could have used their own money to improve their lives? Perhaps buy better clothing, or better quality food.

There are always tradeoffs and as Milton Friedman says, no free lunch.

When it comes to accessibility, this is another interesting subject. Apparently 50% of students come from the top 25% wealthiest families while only 5% come from the bottom quarter. In provinces where tuition is higher, attendances, relative to population, is actually HIGHER than in places where tuition is lower.

The main proponents and backers of free education are people in the education system, and the unions. They are the ones who do all the promotion of low or no tuition. But the government is not Santa Claus that can grant every wish.

Let's stop making everyone else poorer to pay for people to either earn more themselves or to just fool around.

http://www.cbc.ca/news/canada/story/2012/03/27/federal-budget-anxiety.html

A Good start...

The NL Fishery

I can't say I'm an expert in the fishery, but I see a lot of problems. Most are based on economic fallacies. First of all, there are all kinds of government regulation. One regulation ensures that the only people catching fish are so-called owner-operators. The logic is that this allows everyone to have a piece of the action and doesn't allow a large corporation to come in and get a "bigger piece of the pie". Problem is individual fishermen may not be as efficient as a large organization. Everyone pays for inefficiency, as prices go way up because of it. In a free market, what should happen is the more efficient processes ought to be used. This will increase profit, which will attract new investment. The new investment will attempt to undercut the price to share in the profit. This battle to offer the lowest price in order to gain more market share results in lower prices to consumers.

One of the big fallacies is to believe that if someone loses a job, they are permanently unemployed. But what ought to happen is that some people are laid off, but they move into other areas of the economy. So before it might have taken 1000 fisherman to meet the quotas, but now it takes only 500. Instead of seeing this as 500 people becoming unemployed, it's better to see them as transitioning into other areas of the economy. But where will they go?

Back to the consumer. Because the price of fish has dropped, consumers are saving money. Imagine it used to cost $9 a pound for fish, but now it costs $5 per pound and imagine the average Newfoundlander buys 20 pounds a year. That's a savings of $80 per year per Newfoundlander. They can now spend this money on other things. Maybe more visits to the restaurant, or on hockey games, or downtown, etc. The unemployed people will move in to fill those roles.

Why is this better? Quite simply, in the first example, with government regulation, there are 1000 people working in the fishery, and the average Newfoundlander's money has a certain value. By increasing the efficiency of the fishery, the average Newfoundlander's life improves because he can afford things he couldn't before, with the money he saves on buying fish. If nothing changes, the Newfoundlander remains the same, but if the free market is allowed to operate, the average Newfoundlander has more money in his pocket to spend and his quality of life increases.

The free market would work like this for every area. So many things we commonly buy are subject to tariffs, taxes, subsidies, price control, and quotas. This makes everyone poorer while helping out a few people here or there. Some countries dropped their heavy regulation of milk output. This resulted in milk that cost half as much for the same quality. If a person buys a carton of milk each week and the price goes from $4 to $2, that person will save $100 per year. I'm just giving individual products, but if this happened for all products and services, prices would continue to drop and people could use their productive output for better purposes.

$10,000 for a comedy dvd?

I just found out the NL Gov gave wonderful grand band $10,000 to compile a DVD of their work. Who authorized this? If I want a DVD, I'll buy it, and WGB can make their money like everyone else. I didn't authorize my money to be spent this way!

Tories poised to slash regulatory red tape

We need to see more of this type of thing in Newfoundland.

Tories poised to slash regulatory red tape:

'via Blog this'

OCI denied permanent exemptions by province - Nfld. & Labrador - CBC News

Hmm, so the government is meddling again. Well, they have been from the start. I don't think the government should be trying to make business decisions for a private company. If they allow a company to fish, the province shouldn't then try to step in and control everything. They should let a private company with private investments make its own decisions. OCI has lost $10 million over three years. Soon they'll probably just quit altogether. Then where will the fish processing sector be? I'd say it's about time the government step aside and let business take over.

OCI denied permanent exemptions by province - Nfld. & Labrador - CBC News:

Canada Post Monopoly must End

The Canada Post Union is afraid that the corporation's decision to set up large community mail boxes with 20 or 30 addresses is just the beginning of cuts which will eventually affect employees. The Union does not want these large boxes, but would rather Canada Post pay more in overtime, wages, and any compensation because of injuries due to weather. Canada Post claims these large mail boxes are being set up for the safety of mail carriers.

The best solution to this problem is to end Canada Post's monopoly on mail delivery. Right now, it is illegal for someone other than Canada Post to deliver mail. They even challenged a court decision which would have allowed other organizations to handle international mail delivery.

The idea that no one could ever successfully compete against such a large organization cannot be sustained. First of all, a company would not have to start nation-wide. They could start locally in large areas. Small airlines for example, compete with Air Canada, even if these small ones don't offer nationwide service. Eventually they would grow. Other organizations should be allowed to provide mail delivery service, such as Fedex. There could be Fedex mailboxes, etc.

Competition improves everything. Imagine if there was only one grocery store. You'd get the same nonsense as you currently do with Canada Post.

Added:
There is a great article on this topic on Canada Business's website. It gives a good list of reasons why Canada Post should be privatized.

Here are some:

Germany, Netherlands, Sweden, and Austria have privatized their post offices or opened their postal systems to competition—and studies say the changes led to lower costs, higher productivity and better service.

A recent study by the Montreal Economics Institute found that stamp prices declined in countries after de-regulating or privatizing mail delivery.

A 2007 study by professor Edward Iacobucci and colleagues concluded that monopoly status and the interests of unions prevented Canada Post from responding adequately to the: i) rise of new communication technologies such as electronic mail and ii) need to upgrade process technology in the areas of sorting, logistics, and information systems (and privatization was needed).

Thanks to the enhanced bargaining position enjoyed by a union in a monopoly industry, Canada Post’s unions has been able to marshal considerable resources for lobbying campaigns and other actions that disproportionately influence public debate and policy makers.

Government calls for public comments on postal service, as occurred during the federal government’s review of Canada Post in 2009, are likely to show lopsided support for public monopoly status given the unions’ ability to organize and orchestrate a response.

The benefits of privatization are well established in the academic, peer-reviewed literature; a 2001 review in the Journal of Economic Literature concluded that taxpayers gained through revenues from the sale of government assets and longer-term, privatization improved firm performance and increased economic growth.