WASHINGTON — Faced with billions of dollars in losses, the Postal Service announced on Wednesday (Feb. 06 2013) that it would seek to stop Saturday delivery of letters, a sweeping change in mail delivery that immediately drew criticism from postal unions, some businesses and lawmakers.
What went wrong I wonder? Would it had been better if George Washington had never passed the Postal Service Act of 1792? How many billions would taxpayers have saved since then? Would private companies like the American Letter Mail Company of Lysander Spooner have served better the market? Or would the system have collapsed without government intervention?
In February 20, 1792 the Postal Service Act, establishing the United States Post Office Department was signed by President George Washington. An interesting date to remember in these days in which the Postal Service made it to the news with their Losses and their controversial solution by ending Saturday Letter Delivery.
We know for certain that in a free market no company would survive if they had kept losses as huge as the one USPS has had over all these years. They had losses of $15.9 billion only last year. A principle of free market transactions is that in competing there appears a beneficial rivalry among sellers trying to achieve goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion. Thus, enabling for those companies which succeed in growing larger and for those companies which fail to disappear. With the existence of monopolistic services (like the Postal Service in the US) industries and business sponsored by government disrupted market transactions (bureaucratically made) and thus enabled for failing companies to continue existing even though they were not beneficial for society in the long-term.
This reminds me to the company founded Lysander Spooner whom “being an advocate of self-employment and opponent of government regulation of business, Spooner started his own business called American Letter Mail Company which competed with the U.S. Post Office. Postal rates were notoriously high in the 1840s, and in 1844, Spooner founded the American Letter Mail Company, which had offices in various cities, including Baltimore, Philadelphia, and New York. Stamps could be purchased and then attached to letters which could be sent to any of its offices. From here agents were dispatched who traveled on railroads and steamboats, and carried the letters in hand bags. Letters were transferred to messengers in the cities along the routes who then delivered the letters to the addressees. This was a challenge to the United States Post Office’s monopoly. As he had done when challenging the rules of the Massachusetts bar, he published a pamphlet titled “The Unconstitutionality of the Laws of Congress Prohibiting Private Mails.” Although Spooner had finally found commercial success with his mail company, legal challenges by the government eventually exhausted his financial resources. He closed up shop without ever having had the opportunity to fully litigate his constitutional claims. The lasting legacy of Spooner’s challenge to the postal service was the 3-cent stamp, adopted in response to the competition his company provided.“
Lets have this as food for thought…