Monopoly Blues

Tibor R. Machan

In my little community in Silverado, CA, there is a tiny post office where we pick up our mail each weekday. There is no delivery—and, of course, no alternative for first class mail. The two or three people who work there are, unfortunately, quite often absent. I have no idea whether illness or something else keeps reducing their number but more often than not, recently the mail doesn’t get distributed until late in the afternoon. The USPS tells me they have to have the mail out at least by 5 PM but until about six months ago it used to be in our boxes by 10:30 AM or even earlier.

OK, so there is more mail these days, especially during Xmas, but here is how that should play out. The post office should either hire more people so the mail gets out earlier or an alternative mail service should move into the region, offering competing first class delivery service.

But, of course, this is illegal. Competition in first class mail delivery is against the law, never mind demand. And in consequence the post office can keep being later and later with its mail distribution and does not have to hire any extra postal help since no one’s about to come in and take the business from them whatever the economic circumstances.

Perhaps you think this is nothing to fret about. One should be glad just to have postal service, never mind efficiency. But, of course, for some folks the way things are is a burden because of the monopoly of the USPS. I live reasonably close to the little post office but some folks have to drive many miles, including from neighboring canyons, just to check whether their mail is out. Many residents here try to coordinate their trips out of the canyon so they wouldn’t need to waste gas and time driving around all day. The mail often brings us checks we want to deposit and most of us would like to coordinate this with other errands outside the canyon, like shopping. (The closest grocery store is 10 miles away and while many people find this agreeable, they would find it even more agreeable if their mail arrived earlier.)

This is but one of the relatively innocuous results of the postal first class mail monopoly. Other monopolies are far more insidious. Take the New York Metropolitan Transit Authority which was recently struck by the public service union to which all who work for it belong. When in a free market place a strike occurs, people often have other vendors from whom they can receive service. There is usually competition, so that if Chrysler’s autoworkers go on strike, there is Ford, Toyota, Chevrolet and other car makers who are still in business. Of course, sometimes the unions combine and call a strike against all the car or steel makers, although in a free market this could be resisted by the combination of the auto firms in various ways which today is against the law. (In other words, while labor unions may collude, private companies are forbidden to do so! That’s how the anti-trust laws work.)

There are many other instances of economic inefficiency and other maladies caused by government supported monopolies—just think of how elementary and high schools, as well as a great many colleges and universities, are monopolistic by coercing support from taxpayers for themselves, thus restricting other educational options for their clients. (Private schools aren’t allowed to expropriate their operating expenses!)

All in all, these unnatural monopolies—as distinct form the natural ones that exist simply because they have managed to outdo competitors in their line of business—impose serious burdens on many of us. But they are now so entrenched that hardly anyone even discusses breaking them up. The last time a serious change was made was when Ma Bell was broken up and even then the result wasn’t quite what a free market would produce.

Just why the American public is mostly passive about the numerous government protected or operated monopolies is a mystery to me—one reason might be is that the government schools do not explain in their economics classes just how unnecessary and unjust such monopolies are, seeing that the schools themselves are a case in point. But perhaps with some voices making a bit of noise about the situation others will catch on and in time we can get a system in which my little post office would either shape up or find itself competing with an alternative first class mail delivery agency.