John Singleton with Bob HowardRip Van Australia (Stanmore: Cassell Australia, 1977), pp. 197-202, under the heading “Post Office”.

The United States Post Office was organised in 1789.
It went $40 in the hole that year, thereby establishing
one of the most venerable of American traditions.

WILLIAM C. WOOLDRIDGE

Nowhere is there a better example of the evils of a coercive monopoly than our postal system — Australia Post and Telecom. The service is abysmal, the price exorbitant and competition is forcibly prevented.

The Australian postal service, begun in 1809, and telecommunications service, begun in 1854, have grown to enormous proportions. Figures quoted in the Vernon Report of 1974 showed that by 30 June 1973 the total workforce of both services was 130,372 people — or about 45 per cent of total Federal Government employment. Figures quoted in the report showed that in the period from 1959-60 to 1972-73 the postal service accumulated losses of $149.2 million, while the telecommunications service accumulated profits of $286.3 million (approximately half of which came in the years 1971-73 as a result of increases in telephone fees). The latest figures quoted in the report showed a postal service loss of $20.9 million for 1972-73. By 1974-75 this had grown to an annual loss of $64.6 million. Then, the Post Office tripled its prices and halved its deliveries simultaneously and these measures resulted in a $31.7 million profit for 1975-76, the first profit since 1963-64. Telecom on the other hand, showed a $62.1 million profit for 1972-73, and this grew to $95 million for 1974-75.

These figures prove the reaction of Australia Post to its rapidly increasing losses was one that only coercive monopoly could contemplate: a reduction in service and a huge increase in fees. Did it have any alternatives? If so, wouldn’t the Vernon Committee Report have considered or recommended them?

Unfortunately, the operations of committees such as the Vernon Committee are reminiscent of the drunk who lost twenty cents in a dark street. Rather than hunt about for it, in the dark, he moved on up the street and proceeded to look for it under the street light, because the light was better there.

There are certain limitations, both explicit and implicit, that govern such official enquiries as the Vernon enquiry. They accept certain basic premises, and try to find a solution based on them. But if the fault is in the premises, they indeed have as much chance of success as the  drunk looking for his money. They are both looking in the wrong place.

The one thing the Vernon Committee did not recommend, and should have recommended, was that private enterprise be allowed to compete in all areas covered by Australia Post and Telecom. One obvious reason for this is the one that has been continually cited in this book — the government had no right to prevent private individual from such competition. Indeed, the government has no right to be involved in postal and telecommunications activities at all. The function of government is to protect individual rights. Full stop. Not only does its activity in postal and telecommunications services lie outside this proper function of government, but by maintaining a coercive monopoly on it the government becomes guilty of violating the rights of its citizens  — for example, it forcibly prevents people from competing, and inflicts penalties on those who insist on trying.

We fully realise, however, that such more arguments won’t convince many people. Yet. For anyone who appreciates principles, these arguments would be sufficient, but today we live in a world of pragmatic crackpot realism. Thus, to prove our case, we need to show that such private competition is practical. One frequent argument put up is that private companies would simply skim off the cream, and leave the government services with only the non-profitable areas to operate, and in fact this probably would happen. It would happen because of the strange notion the government has that everyone in Australia should, for example, be able to post letters to anyone else in Australia for the same fee. Thus, if you live in Birdsville, you post letters to Sydney with the same eighteen cent stamp as someone in Sydney uses to send a letter across the road. No private company could afford to run a postal service to remote places like Birdsville while charging such unrealistic rates. If it was forced to charge such rates then it would not provide the service.

It is argued that postal services are “social services” and should not necessarily be run at a profit. This means, in plain language, that some of us should be (and are) forced to subsidise the mail of some others. In other words, city people could have their mail delivered at far less than eighteen cents a letter, but the costs for country people would be far higher. So, city people have to subsidise the services to the country. But, as we know, everyone pays the same rates. But why isn’t this fine egalitarian principle applied consistently?

Why don’t we also charge the same airfare for trips all over Australia — Sydney to Perth to cost the same as Sydney to Melbourne, for example? Or have all telephone charges, local and trunk, at the same rate?

The Vernon Report gives some figures as of 30 June 1973 for the breakup of Post Offices.1

Area | Population | Post Offices | Ratio of Post Offices to Population
Metropolitan | 7.9 m. (61%) | 1669 (26%) | 1 : 4700
Large Urban | 1.4 m. (11%) | 412 (6%) | 1 : 3400
Other Urban | 1.9 m. (14%) | 825 (13%) | 1 : 2300
Rural | 1.8 m. (14%) | 3628 (55%) | 1 : 500
Totals | 13.0 m. | 6534 | 1 : 2000

These figures show that country areas have 55 per cent of the Post Offices, but only 14 per cent of the population. The other 86 per cent of the population subsidise, to varying extents, these country people’s mail. Unfortunately, the Report gave no breakdown of the spread of business and profits/losses across the four categories, and we were unable to locate these figures elsewhere.

The Vernon Report, however, did give the figures for the telecommunications operations for the year 1971-72. The “Basic Telephone Facility” showed a profit of $48.4 million in the metropolitan areas, a loss of $23.7 million in country areas, and a loss of $29.5 million in rural areas — or a total non-metropolitan loss of $53.2 million. “Untimed calls” showed a profit of $27.3 million in metropolitan areas, and a combined loss of $35.7 million in country and rural areas. Trunk and STD calls on the other hand, where the increased distance/increased price formula is used, showed a $113.8 million profit.

An example of how private enterprise could handle remote areas is to be found in the history of private mail services in California from 1849 to about 1881. Those were the days of the California gold rushes. There was a large population and virtually no government postal service to the area. As William Wooldridge cites: “Depending on the authority whose count is accepted, from 546 to 775 separate private expresses carried on their business in California at one time or another, together providing, by the almost unanimous testimony of all who have left reports, better service than the government.” Indeed, Wooldridge notes that the U.S. Postmaster General in 1853 reported with discouragement to the President: “The habit of relying on the expresses is continued long after the Post Office and the mail route have reached the neighbourhood.”2

In the 1840s, the U.S. Postal Service was so bad that all over the country private express companies were started to carry the mail — Wells Fargo being one famous example. Starting in 1839, they had by 1845 captured from one third to a half of the total postal market — and this, while being illegal (as fast as the carriers were caught and jailed, irate local residents bailed them out). These private services brought the U.S. Government service to the verge of extinction and forced the government to reduce its postal rates to one eighth of their former maximum. It was this huge reduction (with consequent losses financed by taxes) that finally drove the private carriers out of business. It has been estimated, however, that in 1845, private carriers transported 15,500,000 of the 42,500,000 letters carried that year. Henry Wells, later of Wells-Fargo, had a Philadelphia-New York express that charged, in 1843, six cents a letter, compared with the government’s twenty-five cents. In some places, in order to get around government red tape, users of the private expresses put government stamps on their letters and then paid the private carriers to deliver them. At one time, they were paying three cents for the stamp and a further nine-and-a-half cents for the carrier — eloquent testimony to the enormous dissatisfaction with the government service. The service the private companies offered, even in those relatively primitive times, was astounding. Blood’s New York Express, for example, was offering five collections and four deliveries a day. The only reason the U.S. Post Office still exists, and the only reason ours still exists, is that the government has legislated all competition out of existence.

Because dissatisfaction with the U.S. Government Service is again getting beyond tolerance levels, private competition is once more napping at its heels. The private United States Parcel Service carries over half of the parcels delivered in the U.S. today, and makes a profit, whereas the government makes losses on the same service. (In fact, the U.S. Post Office loses a total of over $100 million a month on all its services!) United Parcel’s prices are lower, delivery times are shorter (for a 2.25 kg package, San Francisco to Seattle: U.P.S., seventy-four cents and two days; U.S. Government, ninety-five cents and seven to ten days — figures for 1968). U.P.S. pays taxes, and still makes a profit.

The Independent Postal System of America started up in November 1967, and by April 1968 had made its first profit. By mid-1969, I.P.S.A. was delivering mail in twenty-eight states in the U.S.A. It can only deal in second, third and fourth class mail, must pay taxes, must start from scratch in purchasing buildings, equipment and other materials, and must go through an enormous number of of convolutions because of bureaucratic red tape. For example, the U.S. Government has decreed that it owns all letterboxes, even though they were purchased and installed by private home owners. The I.P.S.A. is not allowed to deliver mail into those boxes and instead has to leave it elsewhere. So, I.P.S.A. hangs it on the door-knobs in plastic bags. The bags cost (in 1970) about seven dollars per thousand, and returned about ten dollars per thousand when the advertising space on them was sold. That’s why private enterprise makes a profit and the government doesn’t.

I.P.S.A. and others have repeatedly approached the government with offers to deliver first class mail (normal letters) and have been repeatedly refused. They have offered to do it at vastly reduced rates, and with better service. Why are they turned down, and how can the government then say that it has the “public interest” at heart? Political reasons are the answer — the enormous vested interest system created by the U.S. Post Office; from the post office bureaucrats down to their suppliers. Too many votes there for the government to risk. But as the government system continues to deteriorate, that may come to be the lesser of the two evils.

There is the additional factor, too. Controlling the mail does give the government more power. For example, censorship has been imposed by banning books and magazines from the mail, and the opening of mail by government intelligence agencies is easier with a government mail system.

Further evidence of the superiority of private enterprise can be gleaned from the operation of telephones in the U.S.A. While in no way openly competitive or in any way real free enterprise, it is still a superior service to that provided by our government. Same day telephone connection, a wider range of equipment and payment schemes and overall very much lower charges are some of the features of the private U.S. phone system. It is interesting to contemplate what the figures would be for Australia Post and Telecom if they weren’t exempted from income tax, local government rates, payroll tax, sales tax, customs and excise charges, and motor vehicle registration charges.

These operations, post and telecommunications, could be taken over by private enterprise. On 30 June 1973, according to the Vernon Report, the total assets of Australia Post were $180.8 million and Telecom $3203.9 million. These sort of figures are not out of the range of private enterprise, especially since the service could be taken over in a number of different sections. All the government has to do is to allow competition, and remove the competitive advantages from its own service. Then the best will out. When it does, we’ll all be much better off. Just about everyone who has ever been into a post office, or has been through the hassle of getting a phone connected, knows what their main problem is. To once again quote the great English philosopher and sociologist, Herbert Spencer, when State power is applied to social purposes, its action is invariably “slow, stupid, extravagant, unadaptive, corrupt and obstructive.”

Footnotes
  1. Report of the Commission of Enquiry into the Australian Post Office, Australian Government Publishing Service, Canberra, 1974, Vol. 1, p. 12.
  2. William C. Wooldridge, Uncle Sam, the Monopoly Man, Arlington House, New Rochelle, N.Y., 1970, P. 29.
(in order of appearance on Economics.org.au)
  1. Governments Consume Wealth — They Don't Create It
  2. Singo and Howard Propose Privatising Bondi Beach
  3. Singo and Howard Speak Out Against the Crackpot Realism of the CIS and IPA
  4. Singo and Howard on Compromise
  5. Singo and Howard on Monopolies
  6. Singo and Howard Support Sydney Harbour Bridge Restructure
  7. Singo and Howard on Striking at the Root, and the Failure of Howard, the CIS and the IPA
  8. Singo and Howard Explain Why Australia is Not a Capitalist Country
  9. Singo and Howard Call Democracy Tyrannical
  10. Singo and Howard on Drugs!
  11. Simpleton sells his poll philosophy
  12. Singo and Howard Decry Australia Day
  13. Singo and Howard Endorse the Workers Party
  14. Singo and Howard Oppose the Liberal Party
  15. Singo and Howard Admit that Liberals Advocate and Commit Crime
  16. Up the Workers! Bob Howard's 1979 Workers Party Reflection in Playboy
  17. John Whiting's Inaugural Workers Party Presidential Address
  18. John Singleton and Bob Howard 1975 Monday Conference TV Interview on the Workers Party
  19. Singo and Howard on Aborigines
  20. Singo and Howard on Conservatism
  21. Singo and Howard on the Labor Party
  22. Singo, Howard and Hancock Want to Secede
  23. John Singleton changes his name
  24. Lang Hancock's Foreword to Rip Van Australia
  25. New party will not tolerate bludgers: Radical party against welfare state
  26. Singo and Howard introduce Rip Van Australia
  27. Singo and Howard on Knee-Jerks
  28. Singo and Howard on Tax Hunts (Lobbying)
  29. Singo and Howard on Rights
  30. Singo and Howard on Crime
  31. Singo and Howard on Justice
  32. Singo and Howard on Unemployment
  33. John Singleton on 1972 cigarette legislation
  34. Singo and Howard: Gambling Should Neither Be Illegal Nor Taxed
  35. Holed up, hold-up and holdout
  36. The libertarian alternative vs the socialist status quo
  37. Workers Party Platform
  38. Singo and Howard Join Forces to Dismantle Welfare State
  39. Singo and Howard on Business
  40. Singo and Howard on Discrimination
  41. Singo and Howard on the Greens
  42. Singo and Howard on Xenophobia
  43. Singo and Howard on Murdoch, Packer and Monopolistic Media
  44. Singo and Howard Explain that Pure Capitalism Solves Pollution
  45. Singo and Howard Defend Miners Against Government
  46. Singo and Howard on Bureaucracy
  47. Singo and Howard on Corporate Capitalism
  48. The last words of Charles Russell
  49. Ted Noffs' Preface to Rip Van Australia
  50. Right-wing anarchists revamping libertarian ideology
  51. Giving a chukka to the Workers Party
  52. Govt "villain" in eyes of new party
  53. "A beautiful time to be starting a new party": Rand fans believe in every man for himself
  54. Introducing the new Workers' Party
  55. Paul Rackemann 1980 Progress Party Election Speech
  56. Lang Hancock 1978 George Negus Interview
  57. Voices of frustration
  58. Policies of Workers Party
  59. Party Promises to Abolish Tax
  60. AAA Tow Truck Co.
  61. Singo and Howard on Context
  62. Singo and Howard Blame Roosevelt for Pearl Harbour
  63. Singo and Howard on Apathy
  64. Workers Party is "not just a funny flash in the pan"
  65. Singo and Howard on Decency
  66. John Singleton in 1971 on the 2010 Federal Election
  67. Matthew, Mark, Luke & John Pty. Ltd. Advertising Agents
  68. Viv Forbes Wins 1986 Adam Smith Award
  69. The writing of the Workers Party platform and the differences between the 1975 Australian and American libertarian movements
  70. Who's Who in the Workers Party
  71. Bob Howard interviewed by Merilyn Giesekam on the Workers Party
  72. A Farewell to Armchair Critics
  73. Sukrit Sabhlok interviews Mark Tier
  74. David Russell Leads 1975 Workers Party Queensland Senate Team
  75. David Russell Workers Party Policy Speech on Brisbane TV
  76. Bludgers need not apply
  77. New party formed "to slash controls"
  78. The Workers Party
  79. Malcolm Turnbull says "the Workers party is a force to be reckoned with"
  80. The great consumer protection trick
  81. The "Workers" speak out
  82. How the whores pretend to be nuns
  83. The Workers Party is a Political Party
  84. Shit State Subsidised Socialist Schooling Should Cease Says Singo
  85. My Journey to Anarchy:
    From political and economic agnostic to anarchocapitalist
  86. Workers Party Reunion Intro
  87. Singo and Howard on Freedom from Government and Other Criminals
  88. Singo and Howard on Young People
  89. Singo and Howard Expose how Government Healthcare Controls Legislate Doctors into Slavery
  90. Singo and Howard Engage with Homosexuality
  91. Singo and Howard Demand Repeal of Libel and Slander Laws
  92. Singo and Howard on Consumer Protection
  93. Singo and Howard on Consistency
  94. Workers Party is born as foe of government
  95. Political branch formed
  96. Government seen by new party as evil
  97. Singo and Howard on Non-Interference
  98. Singo and Howard on Women's Lib
  99. Singo and Howard on Licences
  100. Singo and Howard on Gun Control
  101. Singo and Howard on Human Nature
  102. Singo and Howard on Voting
  103. Singo and Howard on
    Inherited Wealth
  104. Singo and Howard on Education
  105. Singo and Howard on Qualifications
  106. Ron Manners on the Workers Party
  107. Singo and Howard Hate Politicians
  108. Undeserved handouts make Australia the lucky country
  109. A happy story about Aborigines
  110. John Singleton on Political Advertising
  111. Richard Hall, Mike Stanton and Judith James on the Workers Party
  112. Singo Incites Civil Disobedience
  113. How John Singleton Would Make Tony Abbott Prime Minister
  114. The Discipline of Necessity
  115. John Singleton on the first election the Workers Party contested
  116. Libertarians: Radicals on the right
  117. The Bulletin on Maxwell Newton as Workers Party national spokesman on economics and politics
  118. Singo and Howard: Australia Should Pull Out of the Olympics
  119. Singo and Howard Like Foreign Investment
  120. Mark Tier corrects Nation Review on the Workers Party
  121. The impossible dream
  122. Why can't I get away with it?
  123. The bold and boring Lib/Lab shuffle
  124. Time for progress
  125. The loonie right implodes
  126. Max Newton: Maverick in Exile
  127. John Singleton on refusing to do business with criminals and economic illiterates
  128. Censorship should be banned
  129. "Listen, mate, a socialist is a bum"
  130. John Singleton on Advertising
  131. John Singleton on why he did the Hawke re-election campaign
  132. Sinclair Hill calls for dropping a neutron bomb on Canberra
  133. Bob Howard in Reason 1974-77
  134. John Singleton defends ockerism
  135. Singo and Howard talk Civil Disobedience
  136. The Census Con
  137. Singo and Howard Oppose Australian Participation in the Vietnam War
  138. Did John Singleton oppose the mining industry and privatising healthcare in 1990?
  139. Bob Carr in 1981 on John Singleton's political bent
  140. John Singleton-Ita Buttrose interview (1977)
  141. John Singleton on elections: "a Massive One-Day Sale!"
  142. John Hyde's Progress Party praise
  143. King Leonard of Hutt River Declares Defensive Just War Against Australia the Aggressor
  144. Singo says Lang Hancock violated Australia's 11th commandment: Thou Shalt Not Succeed
  145. Singleton: the White Knight of Ockerdom
  146. John Singleton bites into Sinclair Hill's beef
  147. Save Parramatta Road
  148. 1979 news item on new TV show John Singleton With a Lot of Help From His Friends
  149. Smoking, Health and Freedom
  150. Singo and Howard on Unions
  151. Singo and Howard Smash the State
  152. Singo and Howard on the big issue of Daylight Saving
  153. Come back Bob - It was all in fun!
  154. A few "chukkas" in the Senate for polo ace?
  155. Country Rejuvenation - Towards a Better Future
  156. Singo and Howard on Profits, Super Profits and Natural Disasters
  157. John Singleton's 1977 pitch that he be on a committee of one to run the Sydney 1988 Olympics for profit
  158. Thoughts on Land Ownership
  159. 1975 Max Newton-Ash Long interview on the Workers Party
  160. The Electoral Act should allow voters to choose "none of the above"
  161. The great Labor Party platform: first or last, everybody wins a prize
  162. The politics of marketing - laugh now, pay later
  163. Singo and Howard call Australia fascist and worse
  164. The mouse will roar
  165. Viv Forbes and Jim Fryar vs Malcolm Fraser in 1979
  166. Quip, Quote, Rant and Rave: four of Viv Forbes' letters to the editor in The Australian in 1979
  167. Australia's First Official Political Party Poet Laureate: The Progress Party's Ken Hood in 1979
  168. Hancock's playing very hard to get
  169. Harry M. Miller and The Australian disgrace themselves
  170. Ocker ad genius takes punt on art
  171. John Singleton 1976 ocker Monday Conference Max Harris debate
  172. John Singleton mocks university students on civil liberties and freedom of choice in 1971
  173. Murray Rothbard championed on Australian television in 1974 (pre-Workers Party!) by Maureen Nathan
  174. John Singleton profile in 1977 Australian MEN Vogue
  175. I think that I shall never see a telegraph pole as lovely as a tree
  176. Ralph Nader vs John Singleton on Consumer Protection
  177. John Singleton's first two "Think" columns in Newspaper News, 1969
  178. Singo and Howard on Ballet
  179. Product innovation comes first
  180. Protect who from a 'mindless' wife?
  181. A party is born
  182. Tiny Workers' Party gives us a hint
  183. John Singleton on the ad industry, consumerism and innovation
  184. Workers Party Economic Policy Statement, December 1975
  185. Lang Hancock on the Workers Party, secession and States Rights
  186. John Singleton and Howard on Government Largesse
  187. Counterculture must exclude government handouts
  188. John Singleton's 1974 Federal Liberal Election Campaign Ads
  189. John Singleton believes in the Workers Party
  190. Write-up of John Singleton's 1978 speech to the Australian Liberal Students Association
  191. Singo in 1987: "Joh doesn't go far enough ... I want absolute deregulation of the economy"
  192. Maxwell Newton chapter of Clyde Packer's No Return Ticket (1984)
  193. Singo and Howard on Totalitarian Socialism and Voluntary Socialism
  194. Rip Van Australia on Ripoff Vandals Taxing Australia
  195. Singo and Howard beg for tolerance
  196. John Singleton's 1985 advertising comeback
  197. Singo and Howard Demand End to Public Transport
  198. John Singleton and Howard on Fred Nile, Festival of Light, FamilyVoice Australia and the Christian Lobby
  199. Capitalism: Survival of the Fittest
  200. Return Australia Post to Sender
  201. Singo and Howard on Public Utilities
  202. John Singleton and Howard say monarchy should be funded by monarchists alone
  203. John Singleton on cigarette advertising
  204. Singo in 1972 on newspapers' demise
  205. John Singleton farewells Bryce Courtenay
  206. John Singleton on Australian political advertising in 1972
  207. Gortlam rides again
  208. Announcement that Lang Hancock will be guest of honour at the Workers Party launch
  209. John Singleton on trading stamps, idiot housewives and government
  210. 1975 John Singleton-Sir Robert Askin Quadrant Interview
  211. Singo asks two prickly questions
  212. VIOLENCE, TV BAN, DRINK - SINGO SPEAKS HIS MIND
  213. Why John Singleton can't keep a straight face
  214. Why John Singleton Defends Smokers Rights
  215. Tony Dear on Paul Krutulis, the Workers Party and murder
  216. An Ode to Busybodies
  217. Progress Party and Workers Party lead The Australian
  218. How many tits in a tangle?
  219. Viv Forbes in 1978 on loss-making government, the Berlin Wall and misdirected blasts of hot-air
  220. John Singleton wants the Post Office sold and anti-discrimination legislation scrapped
  221. A speech from the Titanic
  222. A crime must have a victim
  223. John Singleton vs Australia Post
  224. Minimum wages the killer
  225. Has Fraser got his priorities all wrong?
  226. John Singleton says "the royal family should be flogged off to the U.S."
  227. John Singleton vs Don Chipp and the Australian Democrats
  228. John Singleton vs Don Lane
  229. John Singleton. Horseracing. Why?
  230. John Singleton's 1986 reflection on the Workers Party
  231. Bob Howard in 1978 on libertarianism in Australia
  232. John Singleton on the stupidity of anti-discrimination laws
  233. Thou shalt know the facts ... before thou shoot off thou mouth
  234. Charity: An Aesop Fable
  235. Bob Howard announces the Workers Party in freeEnterprise
  236. New improved moon
  237. Announcing people ... YES, people!
  238. Creativity in advertising must be pointed dead on target
  239. John Singleton on barriers to, and opportunities for, effective communication
  240. Wayne Garland on John Singleton on Advertising
  241. John Singleton schools ad course
  242. John Singleton: advertising awards
  243. Mr Singleton Goes to Canberra for Australian Playboy
  244. John Singleton on his TV career for Australian Playboy
  245. John Singleton sacked for telling the truth about Medicare
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