1) If privatization is so great, why does no one anywhere think Defense should be privatized. Should we have thousands of competing mercenary militias?
I'm not anti-goverment. Defense should be one of the only things that government does. Government's role should be to protect us from each other and from foreign invaders but not from ourselves. However, here are some good arguments that show that armies couldn't exist without government. http://www.youtube.com/watch?v=edtWe759KIw
2) I get that competition has its good side (as well as its bad side), but who really believes that capitalism unchecked would end up with any competition?
The government is a powerful weapon in a large corporation's arsenal. It's an expensive weapon but with a tremendous return on investment. Much too expensive for small business however. A large corporation will lobby for laws that eliminate competition, like patents. Large corporations are the greatest benefactors of such laws and they don't even need to enforce them. They let the government do the dirty work for them. All of this at the expense of tax payers. A free market allows everyone to compete equally without government help. It is extremely difficult for a monopoly to form and keep it's position in a free market without government.
The USPS was centrally run and had no competition and performed superbly for some 200 years.
How do you know? Maybe they were terribly inefficient or perhaps very efficient but no one knows because there was no competition and therefore nothing to compare them to. I doubt they were as efficient as they could be though because without without the incentive, innovation is rare. I would go as far as saying that laziness often ensues without competition.
Planned economies are subject to corruption, and so are capitalist enterprises. In a democracy, at least
Corruption is everywhere regardless of the system that we are in.
Here, checkout the salaries of public 'servants' in Canada.
The problem with these salaries is that no one really knows what they should be because government employees don't normally compete with other governments and so they just come up with their own arbitrary numbers. Any other business that would attempt such a thing would go bankrupt in short time.