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by Artifex 5648 days ago
Yes, but there also used to be competing post offices that were so profitable and efficient that they were able to offer three-cent stamps.

Read about it here: http://www.lysanderspooner.org/STAMP3.htm

Spooner's post office was so good that no one was really using the USPS any more. He was literally running them out of business.

That is, until Congress came in and said that what he was doing was illegal. Since then, there have been no alternative post offices.

Businesses like UPS and FedEx survive because of a loophole in the law that basically allows for parcel, but not post, shipping: http://mises.org/daily/3646

That said, they recently had a big regulatory battle between UPS and FedEx. I forget the specifics, but one business was being classified differently, and thus incurring higher operating costs than the other, simply because it was classified differently... In other words - punitive tax legislation. I forget exactly what happened there, and can't find a link at the moment buuuut:

The point is this: Your example of the post office is fundamentally flawed because it doesn't take into account that the post office is protected from market forces by legislation and thus, force.

3 comments

The classification difference means That UPS is union and FedEx is not. UPS is not as profitable and is lobbying to get FedEx reclassified.
UPS turned a profit of $3.126 billion last year. FedEx made $1.321 billion. UPS has higher profit margins than FedEx as well.
Well, on the one hand, a legally-protected monopoly is not the same thing as mandatory. Anyway, UPS/Fedex/DHL may be operating under a loophole, but the loophole exists: it's easy to send a sheet of paper through services like those.

The kind of regulatory problems ("classified differently") you describe are unfortunate, but those affect all major industries and are not specifically relevant to whether using the postal service is being protected. In other words, either UPS or FedEx having regulatory advantages doesn't mean that the overall tax/regulation regime is constructed so as to give the Postal Service a market advantage.

edit: see protomyth's comment; the Postal Service is unionized, so if anything FedEx seems to have the market advantage here.

so, why hasn't email been made illegal? It's essentially free post, and the post office could argue that it's killing their revenues.