And if that fully-internalized cost did not negatively impact other uses of the market. In the same way, the post office forbid the sending of the Send a Dime chain letter[0], even though the senders paid full postage. It was a use that interfered with the intended outcomes of the post office, and prevented the end goals of the post office.
> In the same way, the post office forbid the sending of the Send a Dime chain letter[0], even though the senders paid full postage.
...because it was spam, or because it was fraud? The postal service is very happy to send junk mail, as long as you're paying them for it (at below market first class letter rates!)
A bit of both, I think. The main difference is that junk mail has a predictable cadence, and capacity can be increased to account for it. On the other hand, chain letters have a very sharp rise time which swamps the available capacity, and a sharp fall time so there's no point in expanding to support it.
The analogy I'd use is cryptocurrency's impact on the GPU market. The sharp rise of people wanting to pay electricity in order to buy into the pyramid scheme has caused GPU prices to skyrocket. It isn't clear yet when either the bubble will burst, or regulation will catch up with cryptocurrency, so there hasn't been much increased GPU production to handle the peak demand.
[0] https://www.mortaljourney.com/2010/11/1900-century/1930-tren...