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It Was the Afternoon Before Christmas…

D. Eric Schansberg

Professor of Economics
Indiana University (New Albany)

dschansb@ius.edu

It was the afternoon before Christmas and all through my local post office branch, not a creature was stirring, except perhaps a mouse. The branch was originally scheduled to close at 4:30, but the Postmaster had arbitrarily decided to shut down at 2:00. There had been ten inches of snow a few days earlier and the roads were sloppy but fine. They had been good enough to open the branch that morning. And there was certainly plenty of pre-Christmas traffic as people completed the annual ritual of last-minute shopping for friends and family.

I was there with my six-year-old to mail our family’s annual Christmas letter and photo. As I affixed my stamps on the letters that did not require more personal attention from a USPS employee (those would apparently have to wait for another day), people trickled in and went through the same process I had just completed a few moments earlier—surprise to find the branch closed, a look at the front door to check the posted (but incorrect) hours, and then a dazed-and-confused moment when they tried to figure out what had happened and what to do next.

Each of them expressed disbelief and varying degrees of disgust. In response, I said to each of them, “you can’t expect much from a government monopoly”. My response could be taken as Scrooge-like, I suppose, but who’s the real Scrooge here? Can you imagine UPS or “MailBoxes, etc.” randomly closing down early? Can you imagine J.C. Penneys or Walgreens shutting out customers at 2:00 on Christmas Eve? The primary reason why they won’t is that they face stiff competition within the marketplace. The primary reason the USPS can is because they don’t face nearly as much competition. With its government-established monopoly in first-class mail and with the various government-provided subsidies available to it, the USPS has a large degree of monopoly power—with which it can run roughshod over consumers and taxpayers.

People intuitively understand that significant monopoly power is not in the best interests of consumers or society, but that it is in the selfish interests of the producers who have that power. The government famously attempts to reduce that power—by restricting mergers, reducing market concentration, and regulating natural monopolies. But ironically, it turns out that the government is far busier establishing and extending monopoly power for special interest groups—from its own 90% market share in elementary and secondary education to taxing and otherwise restricting foreign imports, from restricting a variety of labor markets to the NCAA government-sanctioned cartel that gives us exploited athletes and the BCS bowl system. Because the costs are relatively subtle and because the interest groups weave pleasant tales to convince us that their monopoly power is a great idea, the general public typically goes along for the sleigh ride. But when is monopoly power a good thing?

The only monopoly we should have to face this Christmas season is the monopoly on certain truths represented by the birth of Jesus Christ and his subsequent ministry, death, and resurrection. After all, Christ insisted that he was “the way, the truth, the life” and that “no one comes to the Father except through” him (John 14:6). Thankfully, the Good News is not just that the “wages of sin is death, but the gift of God is eternal life in Christ Jesus” (Romans 6:23). In addition, it’s good news that we’re allowed to choose the “competition”. We’re not forced to accept the Good News monopoly; we are allowed the freedom to accept it or reject it. In this Christmas season and always, wouldn’t it be great if those who govern us gave us the gift of freedom rather than the gift of monopoly?

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