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Abolish the Postal Monopoly

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Since the 1840s, it has been a federal crime to provide better mail service than Uncle Sam chooses to provide. The Postal Service has a monopoly on first-class mail delivery (with a limited exemption for urgent, courier-delivered letters costing more than $3). The monopoly has become more indefensible with each passing decade — especially since the government has been intentionally slowing down mail for almost half a century. That tactic reached a climax in December when the Postal Service announced plans to abolish next-day mail delivery.

Throughout American history, politicians and government officials have treated mail users as captives who could justifiably be abused — or at least scorned. In 1789 the Constitution granted the federal government the right to set up a post office, but it did not prohibit competition from private services. However, the first postal act, in 1792, did effectively outlaw private competition.

The first postage rates were extremely high, as Congress tried to force Easterners to subsidize the more expensive service to outlying settlements on the western frontier. As the Postal Service’s official history notes, “Until 1851, the cost of sending a single sheet letter 40 miles was either 6 cents or 8 cents. When the letter traveled over 400 miles, it cost 25 cents. These prices doubled, tripled, or quadrupled with each additional sheet.” Henry Wells (later of Wells-Fargo fame) entered the market, charged 6 cents a letter, and delivered faster. In the Boston area alone, more than a hundred private express companies carried the mail. Private companies delivered letters directly to addressees’ homes, while the government still required people to pick up their mail at the nearest post office.

As private business flourished, government postal revenues declined. The postmaster general admitted in 1843 that many people thought the government’s monopoly was “odious” but insisted that it had to be preserved for the good of the country. In 1845, Congress tightened the laws prohibiting competition and increased the penalties for violators. In 1851, it lowered postal rates and began providing a direct subsidy for postal operations.

Even though the Post Office received high subsidies from the Treasury to provide mail service to outlying regions, service was still slow, doubtful, and limited. In 1860, William H. Russell and two partners formed the Central Overland California and Pike’s Peak Express Company. Russell had repeatedly tried to gain government backing to set up a 2,000-mile express mail route from St. Joseph, Missouri, to Sacramento, California, but Congress was not interested. Russell and partners set up relay stations, hired “young, skinny, wiry fellows not over 18 … willing to risk death daily” (as the newspaper help-wanted ad declared), and quickly narrowed the communication gap between East and West. The first Pony Express route delivered the mail between St. Joseph and Sacramento in 10½ days — less than half the time of the Post Office’s route.

In recent years, the Postal Service has faced repeated challenges from more competent private companies and has responded with one legal counterattack after another. In 1971, a federal district court prohibited a private firm from carrying Christmas cards in Oklahoma on the basis that the plaintiffs, a postal employees’ union, suffered “significant loss of work time, overtime, employment benefits and morale.” The court concluded that private delivery of Christmas cards would be a “widespread public nuisance.” The result was that the public suffered slower service and higher costs to support postal workers’ “morale.”

In 1976 in New York, a pack of Cub Scouts tried to raise money by delivering Christmas cards. Postal Service lawyers ordered them to stop, and threatened the ten-year-olds with a $76,500 fine. A New York Times editorial regretted that the Postal Service’s carriers were not as fast as its lawyers.

Service reduction

At the same time the Postal Service was cracking down on competition, it was curtailing its own customer-service goals. Official standards for overnight delivery were lowered in the 1960s, trimming the target zone from statewide to areas conveniently covered by mail-sorting centers. At a 1969 high-level meeting, postal management decided “to no longer strive for overnight mail delivery and to keep this a secret from Congress and the public,” the Washington Post reported in 1974. Postal management also considered cutting costs by educating Americans not to expect “prompt” service, according to the Post.

Back in 1764, colonial Postmaster General Benjamin Franklin proclaimed a goal of two-day mail delivery between New York and Philadelphia. In 1989, the Postal Service curbed its ambitions and set a goal of two-day mail delivery from New York City to next-door Westchester County, N.Y. Under the new standards, the target for next-day first-class mail delivery was reduced from a 100-to-150-mile radius to one often less than 50 miles. The Postal Service estimated that the new standards could add 10 percent to the average delivery time for first-class mail — which was already 22 percent slower than it had been in 1969.

Postmaster General Anthony Frank claimed that the 1989 standards would “improve our ability to deliver local mail on time.” But that was simply because the Postal Service lowered the definition of “on time.” Frank also defended the reduced standards by noting that Mexico’s mail service did not have an official overnight delivery goal for any of its mail. The Postal Inspection Service concluded that post offices “generally have a negative attitude towards service improvement, even when the capability is there at no additional cost.”

In 1996, partly to counter its widespread “slacker” image, the Postal Service began bankrolling a Tour de France bicycle-racing team. But that did not deter the service from again hitting the brakes on the mail.

Beginning in 2000, the Postal Service quietly slashed delivery targets for first-class mail going beyond local areas in much of the country. A 2006 Postal Regulatory Commission report found that the Postal Service scorned federal law requiring the “highest consideration” to speedy mail delivery. Instead, “administrative convenience resulted in mapping coverage of the 2-day standard exclusively in terms of surface transportation.” The Commission found that “postal patrons in several western states, including California, experienced far more service downgrades than those in other parts of the country.”

The Postal Service has often acted as if mail delivery was a mere nuisance distracting from the gainful pursuit of pensions. The Government Accountability Office reported in 2006 that the Postal Service fails to “measure and report its delivery performance for most types of mail.” The GAO also found that the Service’s “outdated standards are unsuitable as benchmarks for setting realistic expectations for timely mail delivery, measuring delivery performance, or improving service, oversight, and accountability.”

What need?

The Postal Service claims to need the entire current mail volume to maintain service. But a 1977 Justice Department study found “little, if any evidence … that [Postal Service] operations demonstrate pervasive declining average costs per units of production to scale.” It is not inherently cheaper to have one organization carry more than 100 billion pieces of mail than to have many organ-izations carry portions of that 100 billion. If the USPS were right in its claim that carrying more mail increases postal efficiency, then service would be best in big cities and worst in small towns — but the reverse tends to be true. The USPS studies show that worker productivity in big-city post offices is nearly 50 percent less than productivity in small post offices.

Postal officials claim that private carriers cannot ensure the inviolability of the mail. But neither can the USPS. During the 1970s, the CIA routinely opened Americans’ letters to catch up on Aunt Martha’s doings. The Postal Service recently gave the Pentagon permission to open servicemen’s mail to search for drugs. It was only a few decades ago that the Post Office refused to deliver Henry Miller’s novels, claiming they were indecent. In 1982, the Postal Service banned from the mails a booklet called “Stale Food vs. Fresh Food,” by the National Health Federation, claiming that its conclusions conflicted with the weight of scientific opinion. But allowing the USPS to be a judge of scientific opinion is like appointing the Marx Brothers judges of national culture. In 1983, the Postal Service tried to prohibit a condom manufacturer from advertising by mail, but it was overruled by the Supreme Court.

There is no excuse for nationalizing the transport of small envelopes. In more than 200 years, the government has yet to reveal a genius for the task. As long as the mail is carried by a tenured bureaucracy with no incentive to move quickly, service will continue to be slow, expensive, and doubtful.

Is it wiser to rely on a government entity to provide mail service out of good will (or pity) or to rely on private companies to provide good service out of sheer necessity? When people bought “Forever” stamps, they didn’t realize that the name referred to the delivery time, not to stamp prices. The American people can no longer afford a monopoly more interested in storing letters than in delivering them.

This article originally appeared in the March 2012 edition of Future of Freedom. Subscribe to the print or email version of The Future of Freedom Foundation’s monthly journal, Future of Freedom (previously called Freedom Daily).

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    James Bovard serves as policy advisor to The Future of Freedom Foundation. He has written for the New York Times, The Wall Street Journal, The Washington Post, New Republic, Reader's Digest, Playboy, American Spectator, Investors Business Daily, and many other publications. He is the author of a new e-book memoir, Public Policy Hooligan. His other books include: Attention Deficit Democracy (2006); The Bush Betrayal (2004); Terrorism and Tyranny (2003); Feeling Your Pain (2000); Freedom in Chains (1999); Shakedown (1995); Lost Rights (1994); The Fair Trade Fraud (1991); and The Farm Fiasco (1989). He was the 1995 co-recipient of the Thomas Szasz Award for Civil Liberties work, awarded by the Center for Independent Thought, and the recipient of the 1996 Freedom Fund Award from the Firearms Civil Rights Defense Fund of the National Rifle Association. His book Lost Rights received the Mencken Award as Book of the Year from the Free Press Association. His Terrorism and Tyranny won Laissez Faire Book's Lysander Spooner award for the Best Book on Liberty in 2003. Read his blog. Send him email.