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Free Market Anarchist Entrepreneur Forces USPS to Fail

roman_mir (125474) writes | more than 2 years ago

User Journal 4

Ok, so it is not a news story, it is not a new story either, but it is something to consider given all of the claims that USPS is so efficient and provides the cheapest service that free market cannot provide.

Ok, so it is not a news story, it is not a new story either, but it is something to consider given all of the claims that USPS is so efficient and provides the cheapest service that free market cannot provide.

USPS did have that challenge and USPS failed in it and it turned to government in order to drive the challenger out of the market with lawsuits and pro-government monopoly laws. The challenge came in a form of an Anarchist, Lysander Spooner, who started his own post mailing business back in January 11, 1844. The name of the business was Lysander Spooner's American Letter Mail Company.

The USPS in fact engaged in behaviour, that many anti-free marketers assign to private businesses.

Hoping to drive Spooner out of business without raising any constitutional questions, the Postmaster General resorted to some extra-legal measures. Transport companies were told that they would lose their government contracts unless they stopped carrying American Letter Mail Company mail.

What is interesting is that the USPS postage prices were set by the Congress, not by market forces, and so it took Congress to cut USPS prices in near half, from 25 cents for a single sheet of paper as one of the responses to Lysander Spooner entering that market and providing the same service at lower prices. By cutting the USPS prices in half, Congress forced Spooner out of the business.

As a consequence of lower prices, USPS business rose significantly and rates were reduced again in 1851, which shows by the way, that an economy of scale makes more profit from higher volume even if this volume increase comes as a consequence of lowering prices.

This is another example of how it is the government, that creates monopolies and private sector that produces better products at cheaper rates. Of-course the government monopolies eventually fail as the entire underlying system becomes corrupt and can no longer sustain the costs associated with running subsidised monopolies.

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4 comments

Misleading title (0)

Anonymous Coward | more than 2 years ago | (#39819671)

Spooner lost in the end. The headline should be "Free Market Anarchist Entrepreneur Challenges USPS, LOSES"

If you want to be sensational, you can reword it to be "Free Market Fails against Government" or "Government triumphs over Free Market", that way it is provoking without deviating too far from the truth

But thank you for bringing up another example of government winning over free individuals in the end.

Mr Spooner spent much of his life fighting for his ideals of liberty and free market, but in the end, we have what we have today.

Or rather, maybe 19th century US wasn't that free after all, the system today is working no better or worse than before, and the libertarian "things could be better if only..." fantasies are just that: fantasies that look into the past with rose tinted goggles and cherry picked facts.

Humanity has not advanced much if at all since the stone age. He who has the bigger club wins.

Re:Misleading title (1)

roman_mir (125474) | more than 2 years ago | (#39827675)

I'd say forcing the federal government to cut prices by half and then again and again is a huge win for the free market, though government did everything to ensure that its monopoly power cannot be challenged there (and in many other cases).

Re:Misleading title (0)

Anonymous Coward | more than 2 years ago | (#39844329)

I'd say forcing the federal government to cut prices by half and then again and again is a huge win for the free market

Except government did not cut prices because they were somehow able to make the whole process more efficient or produce more. The government had to subsidize the USPS (they were receiving taxpayer money until the 1980s). Postage rates, just like everything else, have been increasing thanks to inflation and destruction of currency

The fact they could cut multiple times just shows how much they were screwing the public in the first place

Calling it a win is like saying beating your wife a little less is a win.

though government did everything to ensure that its monopoly power cannot be challenged there (and in many other cases).

In which government succeeded, and that's what matters. For beating their wife a little less, they have secured a lot more.

Few comments to remember (confiscation, economy) (1)

roman_mir (125474) | more than 2 years ago | (#39843093)

How Apple Sidesteps Billions In Global Taxes [slashdot.org] - thread on the theft of income, slavery of forced labour.

How Apple Sidesteps Billions In Global Taxes [slashdot.org] - on the stupidity of a belief that taxing and subsidising non-production increases economic activity.

Bill Banning Employer Facebook Snooping Introduced In Congress [slashdot.org] - on snooping and hypocrisy by the government.

The Greatest Machine Never Built [slashdot.org] - on idiotic idea that gov't should be taxing and subsidising more gov't projects to 'promote' innovation.

Not Just Apple, How Microsoft Sidestepped Billions In State Taxes [slashdot.org] - on eventual confiscation of private property, businesses by gov't.

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