Thursday, November 17, 2011

My 11-12-11 lecture at the Adam Smith Forum in Moscow, Russia:
Is The US Government Anti-Monopoly?

Tibor R. Machan

So you may have heard that the US Federal Government is opposed to monopolies and that is why the Department of Justice has its various rules against them. All those antitrust provisions are supposed to keep competition going and prevent any business from becoming the only one around to serve customers. Right, you have heard this -- I certainly have.

Only it isn’t true. The federal government is in fact dedicated to preventing competition one place where it could come in very handy. This is in the service of delivering first class mail! No one else is permitted by the government to do this apart from the United States Postal Service. So when one finds that this service doesn’t quite manage to suit one’s postal needs, there isn’t a thing to be done about it apart from hiring a helicopter and paying thousands of dollars to get some letter delivered. But, oops, even that is unavailable since if you were to start such a helicopter service, it would be illegal! The USPS simply forbids anyone else from providing first class mail service to us, period. No, Fed Ex or UPS isn’t allowed -- they may only serve us with parcel and not with first class deliveries.

And the USPS’s monopoly isn’t a very nice one either. (Of course, some of the personnel can be friendly but even the most generous of them follow the rules in ways a German soldier from the Third Reich could be proud of. For example, when I recently asked my postal clerks to please place my accumulated first class mail -- while I was on a week long trip -- into one of the boxes where they put parcels for customers to pick up, they said “No way! That is forbidden by the rules.” Why? Well, they had no idea why -- it’s just what the rules state, period, and you must live with it.

Yet what exactly is supposed to be the horror of monopolies? That they will refuse to allow for variety in the delivery of their services or products. Everyone must live with what the monopolists demand! That is why they must be broken up by the trust busters! Or so the story goes, never mind that the government’s most visible monopoly, the USPS, demands exactly that from us.

So the real story is that the US postal service, provided to us by the federal trust busters, is full of tedious unyielding rules no one may escape. Our post office, in particular, is open between 8AM and 4PM M-F and 10AM and 12AM on Saturday and if a resident who must pick up the mail there is unable to go to the office during these hours, that’s just too damned bad. No adjustment is allowed! This is exactly what we are told that monopolists would do if not broken up by the feds. But in the case of the USPS no other service is permitted by law to help with first class mail. The clerks at the local post office being such good soldiers will not go against their rules and will not place the mail into the boxes which normally contain only parcels so as to serve customers. Oh, but I forget -- government agencies do not have customers, only subjects! Like monarchs used to. They must all bend to the will of the rulers and the USPS is but an extension of the ruling government, certainly not ready to help out customers who might not be able to bend to its rules!

But you heard it everywhere -- the US government is opposed to nasty, dastardly monopolies. Just another lie the government tells us. But at least there is some justice in the world: the USPS is bust, bankrupt, unable to pay its bills. And given its unaccommodating service to some of us, this isn’t very surprising.

Wednesday, November 16, 2011

From Russia with Trepidations

Tibor R. Machan

The invitation was just too nice to turn down despite my increasing reluctance to do very long trips. (I did some such a while back, like twice to New Zealand and twice to Cape Town.) Back and knee troubles tend to impede such ventures these days. But my hosts in Moscow were very pleasant from the start and expressed very serious interest in what I might have to say (about social “contract” theories and Adam Smith and morality) and treated me like a VIP once I arrived. So despite the brevity of the visit, only five days there, I went and found it mostly rewarding. The visit was sweetened by superb accommodations for the trip itself and the stay.

The first thing that struck me -- and all I can report is that, since five days in not enough time to dig into a place -- is just how vast and busy Moscow is. People crowded every place, with the Metro and the immense avenues filled with them.

Much still reminded me of when the Soviets were occupying Budapest in the 1950s, including the “service” I received at the state owned hotel (where you are treated as you would be at the DMV here). Folks are often sullen, especially in service industries where they seem to feel like indentured servants instead of employees and where they show zero courtesy to customers. (This harks back to the good old days of Soviet Russia where the members of the working classes seemed to be the least happy bunch in society.)

The cultural offerings are a varied lot indeed, with everything from what recalls village life in Russia and elsewhere to cosmopolitan London or Milan. Do not expect people to speak even a word of English, not like everywhere else in Europe, outside of fashionable shops. But the signs around town do tend to be multilingual. Something that struck me is just how replete the place is with iPhones and iPads and electronic gadgets in general, even in the middle of the most dilapidated regions of the city.

The best thing about my hotel was the elevator (or lift). It worked great and came to your floor in seconds. But there were no amenities like a gym or pool or even a shop for trinkets. The one shop, selling designer clothing, was nearly always closed despite the signs that announced the hours it was to be open.

What was very welcome is just how intensely interested members of my audience -- students and faculty alike -- were in the topics I covered and how ready they were to explore arguments and take issue with them. Much better than at home, in my classes here at Chapman University (where it takes about two years for students to warm up to what they are supposedly there for). Of course, members of the audiences in Moscow came of their own accord, whereas students in many of my classes at Chapman are required to take the course they take from me and, sadly, do not connect their choice to major in business with the course they must then take from me. (A lot of them, no doubt, would just like to get the passing grade, never mind doing work in the subject. Only after a few terms in college do they begin to make the connection, probably because after having been forced into primary and secondary schools, they look upon college as a kind of liberation!)

From what I gathered in my discussion with my hosts and members of my audiences, Russia is understood by many people as in the grips of crony capitalism. There was little hope shown among those I met for changing this soon although most are aware of the bad end it will lead to.

Corruption is rife; the legal authorities are the farthest thing from upholding any sensible idea of the rule of law but tend, in the main, to be in the pockets of some special interest group. I know a lot of people who champion what they call anarchism and anarcho-capitalism, but what the anarchism in Moscow appears to many classical liberals and libertarians there has nothing at all with the political economy of capitalism, quite the contrary. Government is directly involved in calling winner and losers in the economic realm. Bribery appears to be routine. Arbitrary regulations of business as well.

All this was supplemented, sadly, with the grayest five days I have ever spent since I left Fredonia, NY, where I taught for some ten years and where we called the sun a purely theoretical entity.