Commentary by Robert Tracinski, TIA Daily (via email)
The US Postal Service is a bit different from most of the apparatus of big government, in that its existence is actually authorized in the Constitution. What was not explicitly mandated, however, was giving the United States Postal Service a government-enforced monopoly on mail delivery.
We have long seen the effects of that monopoly. In the mid-19th century, for example, Lysander Spooner showed that a private mail carrier could drive down postage prices far below the government rates—until they took him to court and put him out of business. Since then, the US Postal Service has become a watchword for inefficiency.
In the 1970s, however, the controls were relaxed for "extremely urgent" mail, allowing companies like Federal Express to take away an important portion of the US Postal Service's business. In recent years, the growth of the Internet has been taking away the rest. E-mail has replaced the first-class letter, "paperless" billing is replacing traditional mailed bills, "spam" is replacing junk mail, and online magazines and newsletters (like this one) are slowly turning printed and mailed periodicals into an optional luxury good.
As the Postal Service starts bleeding money, there are various attempts to save it, but they mostly consist of closing down post offices, cutting staff, and reducing services. This is a plan to manage the decline of a dying business, not to revive it.
There is a kind of poetic justice to this, because a recent New York Times article explained how it is precisely the Postal Service's monopoly status that has prevented it from adding services or branching into new lines of business that might actually be profitable.
Well before online bill paying was popular, the Postal Service in 2000 began operating a secure system that would have allowed it to remain the primary conduit for most Americans' monthly payments.
But the Internet industry objected, and Congress successfully pressured the Postal Service to abandon it.
The same pattern has repeated several times over the last decade, with the Postal Service identifying a way to cope with the decline of traditional mail, only to have companies—and ultimately Congress—object....
In other countries, post offices double as banks or sell insurance or cellphones. In the United States, Congress has barred the Postal Service from entering many of these areas. In the 1990s, forecasting a decline in first-class mail, the Postal Service tried several nonmail products, like phone cards, money transfers, and e-mail accounts. But Congress said the ventures created unfair competition for the private sector and did not seem to make much money.
Companies like UPS also objected. According to a 2000 report on the Postal Service's e-commerce activities by the Government Accountability Office, UPS's position was that "a government monopoly should not be allowed to use the benefits of its government standing to attack the private sector." In 2006, Congress restricted nonpostal activities and told the agency to stick with delivering the mail.
This is one of the few cases of Congress doing something right. When the antitrust laws can be used to attack Apple for attempting a different pricing scheme for e-books to compete with Amazon, it would be the height of hypocrisy to allow an actual government-backed monopoly to use its unfair advantage against other businesses.
Of course, I'm not sure how much advantage the USPS would actually have. The business habits learned from being a monopolist in mail delivery are not likely to make you a good banker or insurer. And how's that USPS e-mail account working out for you? Given the government's record as a venture capitalist, they're more likely to put all of their effort into cornering the market on phone cards—a product we haven't used since a cell phone was the size of a brick.
Conversely, I suspect that even traditional mail delivery could be done profitably (and much more reliably) if it were done as a private, for-profit business. We may even have a chance to prove this hypothesis. The Daily Telegraph reports that a private mail carrier is gearing up to compete with the Royal Mail in London and several other British cities.
This is more evidence that capitalism is the real "trust-buster." The supposed anti-monopolists at the Department of Justice have ended up acting as the enforcers for Amazon's dominance in e-books by chasing off competition from Apple. Meanwhile, the private market devises myriad ways to undermine or bypass a monopoly, even when it is backed by a government ban on competition.