Privatizing the Postal Service: Historical Precedent
Once again a lack of historical knowledge allows Statist propaganda to spread. It is up to the well-read and motivated to refute their authoritarian nonsense. I am reading today on several blogs and news sites, including here at TMF requesting that mail carrier service be opened up for competition. The Statist would like you to believe that such an essential service must remain in public control. After all, it's an essential public service, used widely by lower income households. Without the wonderful U.S. Postal Service, no capitalist would ever take up to help these poor souls out. The same ridiculous and illogical argument is put forward for every government service where a monopoly/cartel is allowed, be it firefighting or cable television, usually by the same people who decry monopolies as the scourge of the capitalist! Ha!
Nonsense! Enter Lysander Spooner, Libertarian activist, and general pain in the Establishment's ass.
"Born on a farm in Athol, MA, in 1808, young Spooner studied law, pamphleteered and crusaded for dozens of causes before hitting upon an adversary worthy of his mettle: The United States Post Office, and he almost put it out of business!
By 1844, the spiraling postal rtes had so irked Spooner that he began an extensive study of the situation. There was no question that rates were much too high. It cost 18 3/4 cents to send a letter from Boston to New York and 25 cents to send on all the way to Washington DC A letter sent from Boston to Albany, NY written on a 1/4-ounce sheet of paper and carried by the Western Railroad, cost 2/3 as much as the freight charge for carrying a barrel of flour the same distance. Spooner's summation of his study was succinct: high cost and no service.
People were trying numerous means to circumvent high postage rates and, for the most part, were failing. To those who tried to out-maneuver the Post Office, Spooner gave a loud "hurrah," but he could see that they were fighting a losing battle. With no other solution in sight, he decided to go into competition with the U.S. Government.
To begin with, Spooner couldn't understand why the Post Office should have a monopoly on mail delivery. He was schooled enough in law, however, to know that the Constitution ordered Congress to provide for mail delivery and it had done so with a postal department. But the wily Spooner found a loophole - the Constitution did not declare that a private citizen could not do likewise.
Spooner squared off for battle! With the loopholes his main ammunition, he organized his own postal service and audaciously named it "The American Letter Mail Company." The company offered to deliver letters, with no limit on weight at reduced rates. He even ran an ad on the front page of the "New York Daily Tribune" with the following information: "AMERICAN POST OFFICE - The American Letter Mail Company has established post offices in New York, Philadelphia, Baltimore and Boston, and will deliver letter daily from each city to the others - twice a day between New York and Philadelphia. Postage 6 1/4 cents per each half-ounce, payable in advance always. Stamps 20 for a dollar. Their purpose it to carry letters by the most rapid conveyances, and at the cheapest rates and to extend their operations (as fast as patronage will justify) over the principal routes of the country, so as to give the public the most extensive facilities for correspondence that can be afforded at a uniform rate.
"The Company design also (if sustained by the public) is to thoroughly agitates the questions, and test the Constitutional right of the competition in the business of carrying letters - the ground on which they assert this right are published and for sale at the post offices in pamphlet form."
The public enthusiastically approved the venture. Congress, however, was sputtering and the Postal Department was howling - all of Washington was enraged. How dare Spooner fo this?; How dare he so openly flout the Constitution? Government postal revenues took a nose dive while "The American Letter Mail Company" went merrily on its way picking up the postal business everywhere.
Washington lawmakers had no intention of sitting still for any "that Spooner's shenanigans." The midnight oil burned as attorneys pored over their books. Soon, the suits against Spooner and his cohorts began. Railroad heads were given full warning that government mails would be removed unless space and passage were refused to private letter carriers. It was "round one" for the government when an agent of Spooner's company was found guilty and fined for transporting letters in a railroad car over a postroad of the United States.
The "round two" went to Spooner when a U.S. District Judge advised a jury that owners of conveyances were not liable under law if, unknown to the owners, a letter carrier brought mail aboard a train of steamboat. The "not guilty" verdict was sustained by the U.S. Circuit Court which expressed doubt that the U.S. had the right to monopolize the transportation of mail. This was tantamount to a commendation of Spooner's theories.
For the postal officials it was a low blow and they sought further legal means to put an end to Spooner and his trouble-making company. More court reversals followed. Finally, the Postmaster General felt he had to bow to the issues and went before Congress to plead for the authority to lower postal rates.
In March, 1845, a reduction of postal rates was approved and put into effect that July. Letters weighing less than a half ounce could be sent any distance under 300 miles for five cents. Even the rates for newspapers were reevaluated and changed so they could be mailed without charge within a 30-mile radius.
Spooner, feeling that his efforts and his company were doing a great deal of good for the citizens of the land, wasn't through fighting. His counteraction caused even greater consternation to his opponents - he lowered his rates. So the battle of law and loopholes continued.
In 1851, Congress again lowered rates and simultaneously enacted a law to protect the government's monopoly on the distribution of mail. Whereas threats of jail had not fazed or dampened Spooner's zeal in the fight, the latter move by Congress forced him into defeat.
Later that year, Congress lowered the postal rate to three cents for delivery anywhere in the country. In 1958, it had climbed to four cents and has not stopped climbing since.
As for Spooner, his great battle had ended and his company was disbanded. He died in 1887, his death barely noticed by the public. No one seemed to remember the man who had been able to show everyone what old-fashioned courage and enterprise, plus competition, could do to change things. He had proven that a cheaper and more efficient postal service was possible."
The moral of the story: any service that the consumer demands will be filled by an enterprising entrepreneur if the government allows him/her to do so. Rather than arguing over which part of the economy should be stimulated and what actions the government should take, they should be questioning the rationale for its existence. After you do, please come and join us at the Libertarian Party.
David in Qatar