An Untouchable Monopoly:
The United States Postal Service
by Sean Turner
A New Visions Commentary
paper published October 2003 by The National Center for Public
Policy Research. Reprints permitted provided source is credited.
In 1998, the U.S. Justice Department
filed an antitrust lawsuit against Microsoft, maintaining that
the world's largest maker of software held an illegal monopoly
and stifled competition. Microsoft was found to use its monopoly
power to harm competitors.
This leads me to the question, "Couldn't
the Justice Department then file a lawsuit against the United
States Government for its blatant monopoly status in postal delivery?"
The first official notice of a postal
service appeared in the Colonies in 1639 to handle the correspondence
between the colonists and England, and between the colonies.
The establishment of a central postal organization in the Colonies
came after 1691 when Thomas Neale received a 21-year grant from
the British Crown for a North American postal service. In 1789,
following the adoption of the U.S. Constitution, the office of
the Postmaster General was created. At the time, there were only
75 post offices and a post office staff totaling just over 30
people - including the Postmaster General.
Today, the United States Postal Service
employs nearly 800,000 workers (mostly unionized) in roughly
38,000 post offices. They deliver 200 billion pieces of mail
annually. Its annual revenues of more than $65 billion would
rank it number 11 among the Fortune 500 companies. Nevertheless,
it is not its sheer size, volume or revenues through which it
earns its monopoly status. Rather, it is the unfair advantages
it enjoys that private companies do not.
For instance, the U.S. Postal Service
pays no corporate income tax, no state or local property tax,
no business or profess-ional licensing tax and no business franchise
fees. It can borrow from the U.S. Treasury at below-market rates
and it pays no dividends to shareholders. It is exempt from zoning,
customs and tax laws by which its private-sector competitors
must abide. By law, it maintains exclusive rights to deliver
first-class mail, and - through laws known as Private Express
Statutes - no private entity is allowed to deliver a package
or envelope for less than $3 or twice the cost of a first-class
This taxpayer-funded, legally protected
enterprise exemplifies the very definition of a monopoly, and
yet it has somehow survived numerous attempts to dismantle it.
It has become so brazenly abusive in its monopolistic status
that, in 1997, it attempted to extend its reach to achieve legislation
that would have granted it authority to purchase '' such other
obligations or securities as it deems appropriate, if such investment
is closely related to Postal Service operations as determined
by... [its] Board of Governors.''
The rise of technology - from faxes to
email to e-commerce - and the success of competitors such as
UPS and FedEx have relegated the constitutional provision of
post offices by the federal government to antiquity.
To allow the existence of the United
States Postal Service in its current form is inimical to the
principles upon which this nation was founded. The time for eliminating
this monopoly is long overdue. The laws that protect the U.S.
Postal Service must be repealed, letting free market forces and
the will of the people determine its fate.
(Sean Turner is a member of
the Project 21 National Advisory Council. Comments may be sent
Note: New Visions Commentaries reflect the views of their author,
and not necessarily those of Project 21.
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