Freeman

ARTICLE

Leonard E. Read

JANUARY 01, 1967

Society during the past few decades has come more and more under the spell of what is sometimes known as the “new economics.”

This reversion to historic mercantilism tends to ignore or reject free market economics. It emphasizes government ownership and control of capital, production, prices, wages and exchange.

The only industry in the United States that is nationalized, that is, the one in which the new economics attains its fullest realization, is mail delivery.

Capital is acquired not by voluntary but by coercive and, thus, noncompetitive means: taxation.

Pricing of services if is arrived not by supply and demand but by bureaucratic determination. A sealed personal message is “first class”; the price by land is 5cents per ounce and by air is 8 cents. The rate is the same whether the delivery is across the street or across the nation. Competition for this potentially profitable business is outlawed.

Some classes of mail, “library materials,” for instance, will be delivered anywhere in the country for as little as 1/15 of a cent per ounce. Other classes call for other rates, but generally far below cost. Beyond this is the franked and other mail that goes "free." And the clamor of the mail-order houses and other beneficiaries, through powerful Washington lobbies, al­ways is for more service and big­ger subsidies. This, of course, pre­cludes effective competition in mail delivery.

The employees of this postal service — nearly 600,000 of them —are largely unionized, which means that wages and hours of work are fixed arbitrarily rather than by competition.

How is the new economics work­ing in practice? The postal deficit gets larger each year, currently running about $1 billion. The service gets worse, not better. On occasion, delivery is so long de­layed that it becomes expedient to destroy the out-dated parcels.

Why is the new economics ineffi­cient in practice? No one bureau­crat-in-charge knows any more how to deliver mail than any one person knows how to make a jet, an auto, a pencil.

The remedy? Let anyone deliver mail — without subsidy! Rely on the market as we do with the de­livery of groceries, or drugs, or the human voice, or people.

If the new economics as applied to mail delivery is disturbing, wait till medicare runs its full course. What are we going to do with the "third-class" patients who will be backed up in long queues awaiting medical attention? Destroy them?

The free market, willing ex­change, voluntary economy creates no such problems of artificial short­age or surplus. Supply and demand, manifested in thousands and thousands of daily choices and transactions, are always moving toward balance and equilibrium.

Monopolists — government or private — are self-serving. Com­petitors, on the other hand, are im­pelled by their own interest to serve consumers as they serve themselves. When one competitor can’t handle the business, others will. Why not let mail delivery be handled by the market, as is freight? We never hear of these carriers destroying jam-ups. They deliver, not destroy.

ASSOCIATED ISSUE

January 1967

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