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Prosecute the Postal Service, not Microsoft

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The U.S. Justice Department has hauled Microsoft into court with the ostensible purpose of protecting American consumers from another big, bad monopoly. As with other antitrust suits, it’s all a waste of time, energy, and resources.

The only monopolies that should be ended are the legal ones – that is, those in which government itself prevents free and open competition in the marketplace against the sole provider of a good or service. For example, consider the U.S. Postal Service (USPS). It’s a perfect example of a monopoly: it has been accorded the legal privilege of delivering first-class mail in the United States and the government prohibits everyone from competing with it in the delivery of first-class mail.

What happens if a private company disregards the monopoly law and begins competing against the USPS? Justice Department attorneys rush into court and secure an emergency injunction from a federal judge that orders the private company to cease and desist its competitive behavior. The Justice Department’s legal argument is always the same: that the USPS has a legal monopoly to deliver first-class mail and that it is in the interests of the government that this monopoly remain in full force and effect.

What happens if a private individual, believing that monopolies are wrongful and harmful, chooses to disregard the federal judge’s order and proceeds to compete against the USPS? The recalcitrant competitor is cited for contempt, arrested by U.S. marshals, imprisoned, and fined until he agrees to stop his competitive conduct.

Thus, it is government power – marshals, guns, prisons, and fines – and the threat of such power — that have always been the necessary and essential ingredients of monopolies.

It is not surprising that the USPS provides a shoddy service and mistreats its customers. That’s the way monopolists – that is, those who are legally protected from competition – have always behaved. They know that if a customer is unhappy, all he can do is go to another branch office of the monopolist. The monopolist knows that the customer cannot go to a competitor because, again, the government has prohibited such competition.

If Justice Department attorneys really hate monopolies and monopolistic practices as much as they say they do, why don’t they prosecute one of the worst monopolies in American history – the U.S. Postal Service? Why have they always opposed free and open competition in the delivery of first-class mail?

Microsoft, of course, is in a completely different position from the USPS. Everyone is free to enter the marketplace and begin competing against Microsoft. And if someone does, Microsoft cannot summon marshals to effect the arrest and imprisonment of the competitor. Microsoft has one and only one option available to it: do everything it can to continue pleasing its customers. Consumers are fickle. Treat them poorly, and they’ll go elsewhere.

Microsoft knows that in the marketplace, the consumer, not the government, is sovereign.

Look at all those big, bad monopolies that the Justice Department has warned us about in the past. What happened to U.S. Steel? General Motors, Ford, and the automobile “oligopolists”? IBM? What about the Japanese monopolists who were supposedly going to take over America? If those so-called monopolists had the power the government said they had, why aren’t they using it now? One would think that a real monopolist would act like one.

For that matter, examine a list of the 500 largest and most successful companies in 1978. I suspect that a good many of them are not found on today’s list of the top 500. Why not? After all, if a large, successful company is a monopolist, then doesn’t it stand to reason that today, it would be even larger and more powerful than it was 20 years ago? The reason those companies are not on the list today is a simple one. It’s not because government lawyers gave us their paternalistic care but rather because consumers chose to take their business elsewhere.

A free and open marketplace in which companies are vying to provide people with the best goods and services is the consumer’s best friend. The next time people start talking about shutting down the nonessential functions of government, a good place to start would be the antitrust division of the U.S. Justice Department.

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    Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.