The U.S. Postal Service has announced that another in its endless series of rate increases will take effect in May. The announcement raises a question that unfortunately too few Americans ever ask themselves: Why not simply abolish the Postal Service or at least repeal its monopoly on first-class mail delivery?
The U.S. Postal Service is, pure and simple, a monopoly. A monopoly means that the government has granted a legal privilege to an entity to be the exclusive provider of a particular service. Everyone else is prohibited by law from competing against that entity to provide that particular good or service.
Whenever anyone tries to enter the market in competition against the Postal Service in the delivery of first-class mail, Justice Department lawyers immediately rush to federal court to enforce the Postal Service’s monopoly privilege. A federal judge immediately issues an injunction prohibiting the would-be competitor from continuing to violate the monopoly law. If the would-be competitor refuses to comply with the judge’s order, the judge orders his arrest and incarceration, which will last indefinitely until the would-be competitor finally declares that he will no longer violate the Postal Service’s monopoly.
Throughout American history and, for that matter, British history, there has been a revulsion against monopolies. Here’s how Justice Bradley put it in his dissenting opinion in the Slaughterhouse Cases (1873):
The granting of monopolies, or exclusive privileges to individuals or corporations is an invasion of the right of others to choose a lawful calling, and an infringement of personal liberty. It was so felt by the English nation as far back as the reigns of Elizabeth and James. A fierce struggle for the suppression of such monopolies, and for abolishing the prerogative of creating them, was made, and was successful. The statute of 21st James abolishing monopolies was one of those constitutional landmarks of English liberty which the English nation so highly prizes and so jealously preserves. It was a part of that inheritance which our fathers brought with them.
Monopolies provide shoddy products and services because they know that they’re not threatened by competition. The people who work in monopolies often behave rudely or obnoxiously to customers for the same reason — they’re not worried about the customer going elsewhere. If someone doesn’t like the way he’s treated at his neighborhood postal station, all he can do is transfer his business to another branch of the same enterprise. He can’t take his business to a competing firm because, again, competing firms are not permitted to operate.
Ironically, even while supporting the postal monopoly many Americans rail against big, successful businesses by labeling them as “monopolies.” Consider IBM, GM, and Microsoft, for example. As each of those businesses achieved success in the marketplace, there were cries over the “monopoly” status they enjoyed.
But those big, successful companies have never been monopolies. Why? Again, monopolies are enterprises where the coercive power of the law prohibits the entry of competitors. IBM, GM, and Microsoft grew big by virtue of satisfying consumers through the production of products that people wanted to buy. But these companies have always been subject to potential competition from other companies. If other companies began producing computers, automobiles, or software, attorneys for IBM, GM, and Microsoft could not run to a federal judge to secure an injunction that would shut down the competitors. All that IBM, GM, and Microsoft could do is try to continue producing a product that consumers wanted to buy.
In the competitive process, then, the tendency is a constant improvement in goods and services for consumers. No matter how successful a company has been in the past satisfying consumers, if it fails to continue satisfying consumers it loses market share and possibly even goes out of business. In the unhampered market economy, the consumer ultimately is sovereign.
The Postal Service says that its monopoly is necessary because without it, it claims, people in the mountains would be unable to get their mail. The rationale is spurious, however. After all, people in the mountains get their milk, bread, and other essential items without monopoly privileges being granted in those enterprises. Similarly, people in the mountains would figure out how to get their mail delivered as well.
The U.S. Postal Service’s monopoly is an anachronism, one that not only provides a shoddy, expensive product but also one that violates America’s heritage of economic liberty. America’s postal monopoly deserves immediate repeal.
