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What was that power? It was, as has been shown, merely a power concurrent with that of the states and people, .. to establish post offices and post roads.” Only a concurrent power, then, having been delegated, and a like power not having been prohibited to the states or people, it necessarily follows, from the terms of the amendment itself, that a concurrent power to establish them is .. reserved” to the states respectively, or to the people-or to both.

Lysander Spooner (P.21 The Unconstitutionality of the Laws of Congress, prohibiting Private Mails. 1844)

Before the founding of private parcel carriers, such as UPS or FedEx, the United States Postal Service had a monopoly on the delivery of small packages. Until one man, Lysander Spooner decided to openly challenge the government’s industry dominance. Ultimately, the U.S. government won the battle. Spooner arguably won the war. His victory immortalized in the fact that he forced the hand of the U.S. Mail service to lower the costs of stamps through his valiant entrepreneurial efforts. Effectively driving the cost of stamps down to actual market rates. Earning the bold political philosopher the moniker “Father of the Three Cent Stamp”. Spooner observing the illegitimate manner in which the government monopolized this service, braving the risk of legal action, decided to create his private mail service. Servicing parcel and letter delivery from Boston through the mid-Atlantic. All the while undercutting the grossly inflated shipping rates set by the government.

Lysander Spooner was born on a rural farmhouse in Athol, Massachusetts on January 19th, 1809. He was one of nine children. It was speculated that Spooner’s fervently religious upbring influenced his later turn towards deism. Along with a commitment to religion, his family also were staunch supporters of the abolition movement. At the age of sixteen, he entered an agreement with his father to work on the farm until he was twenty-five. In exchange, Spooner was provided with food, room and board, and “educational advantages”. After fulfilling his obligation to his father, Spooner worked as a clerk for the Register of Deeds in Worcester, Massachusetts. In 1833, studied law under John Davis while working in his office. Spooner eventually went on to start his legal practice. Acting in defiance of the Massachusetts mandate that lawyers either have a college degree or study five years under a practicing lawyer. Spooner perceived this law as being discriminatory towards the “well-educated poor”. Drawing parallels to the artificial barriers to entry created through state occupational licensing requirements. Spooner even petitioned the Massachusetts General Court to challenge the veracity of this requirement in 1835.

In 1844, Spooner founded the American Letter Mail company. Audaciously announcing the incorporation of his enterprise to the U.S. Postmaster General. Reacting to the skyrocketing costs of postage in the 1840s. The cost of sending a letter from Maryland to Massachusetts was 18.75 cents. Approximately twenty-five percent of workers’ daily wages at the time. Two weeks after his grand announcement Spooner was delivering letters between Boston, New York, and Baltimore. Offering patrons this service for a mere 5 cents per stamp rate. A drastically more economical option than the exorbitantly priced stamps required to be delivered by the USPS. Doing something the Postal Service of the nineteenth century could not accomplish. Deliver mail quickly, efficiently, and all at a fair price. All benefits could not be achieved by the U.S. Mail due to the organization be rife with corruption and bureaucratic red tape. The U.S. Postal Service possessing a monopoly position in the market afforded the organization the ability to set prices.

Naturally, Spooner soon came under fire from the U.S. Post Office. Less than a week of being in business “… Congress introduced a resolution to investigate the establishment of private post offices..”. After only being in business for several months Spooner and a few of his employees were detained for transporting letters by train to Baltimore. After being incarcerated for nearly three months and grappling with other legal troubles Spooner was released from prison. The American public became accustomed to lower postage rates, meaning the U.S. post office had to lower the cost of their stamps. This resulted in many of the customers using private carriers returning to using USPS. This combined with the legal fees incurred through Spooner’s legal battles with the U.S. Government contributed to the bankruptcy of his business. After the failure of his business venture, Spooner went on to be an influential figure in the abolitionist movement.

Spooner was able to give the inefficient appendage of the federal government dedicated to delivering mail a run for its money. Through this market distribution despite the failure of Spooner’s business, he succeeded in lowering the price of postage in the United States. He did so through market forces. Directing the U.S Post Office to follow suit with providing comparable pricing to the public. This was achieved in the absence of legislation or other typical forms of political action. Truly living up to his reputation as an anarchist. Regulation suffers from the lethargy of political processes. Changes made to adjust to market conditions are much more instantaneous. Demonstrated how quickly postage rates dropped after Spooner started delivering letters.

In the spirit of Spooner and his contributions to anarchist political theory, it is interesting how there is a discrepancy between when the government engages in questionable conduct and when a private citizen does. Few questioned the government monopoly on mail delivery, but when a private citizen attempts to bring competition into the market he is ligated out of business. However, when private companies start to dominate specific industries at the end of the 19th century, there was then a moral imperative to break up this concentration of market power. The christening of this crusade was punctuated by the passage of the Sherman Antitrust Act in 1890. It would be fair to respond to this charge of hypocrisy, by stating that when Spooner waged war on the monopoly in letter carrier services there wasn’t any precedence for antitrust law in American jurisprudence at the time. Good point, but even in the light of the fully developed and sophisticated antitrust law we have today there are still state-dominated monopolies on the production of goods and services. The most salient example being defense. Some cling to the Samuelsonian public goods argument for keeping the government monopoly on defense. Keen scholars of political economy may even invoke Coase’s Theorem to justify state provision of defense services. For those who are skeptical of the legitimacy of state intervention, there still appears to be a double standard.

11 thoughts on “Privatizing Mail: Lysander Spooner V. U.S. Postal Service

    1. Now I want to have a lighthouse week series. It would be interesting to also review some criticisms as well.

      Libertarian icon Walter Block had also voiced his own concerns regarding Coase’s Lighthouse. Then again Dr. Block does seem to criticize everything. Quibbling over the most minuscule details.

      However, I would be more apt to side with Coase on this one based upon the Wikipedia entry. Then again, I still need to read the full paper.

      Liked by 1 person

        1. I have bookmarked this paper. I will certainly explore this concept in more depth.

          However, circling back to state held monopolies. To a certain extent I could accept a public goods or transaction costs argument for the government providing a service. Logically, I can see the veracity of such an argument.

          When it comes to a service such as a letter delivery , there isn’t a valid reason to block private businesses from entering this industry. Spooner was calling the government out on this fact. Unfortunately, he paid the price for providing a living example of why mail services shouldn’t be restricted exclusively to the government.

          Back to the Coase’s lighthouse, this concept makes me think I need to read more work by Coase. He certainly wasn’t a dull or boring thinker.

          Liked by 1 person

  1. This was very enlightening!

    My understanding is that government monopolies are often superior in danger to those which are private. This is mainly because government monopolies are sometimes completely exempt from market competition. Hands down, Spooner definitely made a revolutionary move.

    Liked by 1 person

    1. Absolutely agree. I was most struck by how brave he was to directly take in the government. Granted it did financially ruin him. He did go on to be a successful abolitionist. Then after the Civil War went on to be an advocate for state succession ( while simultaneously opposing the institution of slavery).

      In my opinion state-sanctioned monopolies are always worse.At least in a market drive consolidation at least there is a hope of another competitor entry the market. Even if it is unlikely or the barriers-to-entry are particularly onerous. If a monopoly is back by the government, it weaponize the law to keep competitors out. Hence Spooner’s legal troubles.

      Some economists even so far to say that monopolies only occur due to state intervention. Then again, I don’t know if I fully buy into that arguement.

      Liked by 1 person

  2. Definitely. I’m actually interested in evaluating the different arguments regarding monopolies. I was not aware of the perspective that all monopolies are the consequence of government intervention. That certainly appears, at least from surface analysis, to be an extraordinary assertion.
    By chance, might you know where I could look to find an author that makes this particular argument?

    Liked by 1 person

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