The US Postal Service is a frequent target of those seeking to privatize public assets.
In 1960, Milton Friedman's Capitalism and Freedom argued for what Friedman defined as a smaller government. Claiming private industry does things better, he specifically advocated eliminating the the United States Postal Service's mail monopoly. For his proof private mail service works better? Friedman claimed the USPS killed the Pony Express.
“The historical reason why we have a Postal Service monopoly is because the Pony Express did such a good job of carrying the mail across the continent that, when the government introduced transcontinental service, it couldn’t compete effectively and lost money. The result was a law making it illegal for anybody else to carry the mail."
Capitalism and Freedom, Ch 2, pages 29-30 (1982 paperback edition)
Friedman is not correct. The USPS monopoly was established in 1792, 70 years before the Pony Express existed.
In its first 100 years, the USPS almost always made money. On the other hand, the Pony Express, in business only 2 years, always lost money and went bankrupt.
If Friedman were correct, and the USPS killed the supposedly "more efficient" Pony Express, one wonders why the USPS allowed the profitable American Express and Wells Fargo companies to survive.
Friedman sort of has one fact right: the Pony Express closed the day after the first trans-continental telegraph was sent. That ended the Pony Express business: electric current moves faster than horses. Who paid for that innovation? The United States Postal Service.
Despite Friedman's and the highly marketed current slanders, the USPS has a long history of innovation and sound business practices. It made money for its first forty years. It could make money now if Congress directed it to do so.
As for killing the Pony Express? Well, those who believe men on horseback can deliver messages over around a thousand of miles of mountains and deserts more efficiently than a telegraph line, should support Milton Friedman's conclusions.
The rest of us should properly conclude Friedman, however loved by certain plutocrats, seems like a real idiot.
The interesting question is how an intellect of Friedman's level could make such gross blunders. The most logical explanation is that someone paid Friedman for academic cover: they wanted to "privatize" the profitable portions of our United States Postal Service. Good for those few; Bad for rural America as the profitable city routes have been subsidizing rural mail delivery since the USPS was made a monopoly by our Founding Fathers, back in 1792.
Despite its obvious flaws, many such as the Cato Institute, regularly denigrate our postal service and, citing Mr. Friedman, advocate selling its functions to privately held interests.
More details follow below the fold.
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