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August
27
2020

Much Ado About the Postal Monopoly
Jacob G. Hornberger

It is so funny watching Republicans and Democrats fighting over the Postal Service. Their fight is over how to make the Postal Service finally work. Their differences revolve around how much tax money to hand over to the Postal Service to enable it to survive.

Neither Republicans nor Democrats get it. They will never make the Postal Service work. That’s because government enterprises don’t work. And the Postal Service, no matter how much you dress it up, is a government enterprise. 

That’s partly what socialism is all about — government-run enterprises. Talk to any citizen of the Soviet Union. Or to a current citizen of Venezuela. They will tell you about the massive inefficiencies that come with socialist or government-run enterprises.

But the situation is even worse with the Postal Service. That’s because Republicans and Democrats have given the Postal Service a monopoly on the delivery of first-class mail.

That means that the law prohibits any other company from competing against the Postal Service when it comes to the delivery of first-class mail. If a company tries to compete, a federal judge will issue an injunction commanding it to shut down. That’s how a monopoly works.

In other words, it would be possible to have the Postal Service operating in competition with other firms that would be free to enter the market in the delivery of first-class mail. But we all know what would happen if that were the case. The private firms would immediately put the Postal Service out of business. Who would do business with a government-run enterprise when they could do business with a privately run enterprise?

That’s why Republicans and Democrats have granted monopoly privilege to the Postal Service — so that it would not be pushed out of business by privately owned competing firms. With the grant of a monopoly, the Postal Service doesn’t have to be concerned with competition. It has a lock on first-class mail delivery no matter how poorly or inefficiently it operates.

Here is an enterprise that can set any price it wants for its services, and yet it still can’t make it. Imagine what would happen if its monopoly privilege was suddenly removed and privately owned firms were free to enter the market and compete in the delivery of first class mail. The Postal Service would be toast.

NOTE: Some years ago my then neighborhood Postal Worker and I had lunch up the road a bit and we got into a discussion about his ’employer’ and the economic issues being presented in this column. Gary told me that, the reason that the USPS is in such constant economic quagmire – was due to the massive Pension funds that are being paid out each month. ~ Ed.

And it should be toast. Monopolies have no place in American life. They are contrary to principles of economic liberty, free markets, free enterprise, and private property.

That’s one of the most amusing parts of this entire controversy, at least insofar as Republicans are concerned. They are the ones who are always preaching the virtues and benefits of “freedom, free enterprise, and private property” and exclaiming against socialism. Yet, when t comes to the Postal Service (and lots of other things), Republicans are as big of proponents of socialism as Democrats are.

But Republicans aren’t the only ones who suffer from a severe case of hypocrisy here. Don’t forget that it’s the Democrats who are known far and wide for their antipathy toward “big private companies,” which they consider to be “monopolies.” And yet, their devotion to the giant postal monopoly is as big as that of Republicans.

When it comes to the Postal Service, the American people should engage in a mercy killing. It’s time to bring an end to the longtime suffering of this socialist institution. Repealing the postal monopoly is not enough. Better to just end all government involvement in mail delivery.

 


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.

 

 

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