Tag: monopoly

The Incompetence of the Canada Post Corporation

By Alexander Robak | Canada

As of October 16th, 2018, the Canadian Union of Postal Workers (CUPW) has declared that they will begin rotating strikes across the country. Over the past month, these rotating strikes have hit many major cities across the country such as Mississauga, Ottawa, and Toronto. Not only have these major cities (which are responsible for the processing of much of Canada’s mail) been affected, but many of the smaller cities and townships in Canada have been affected as well. This strike comes in the wake of the expiration of the collective bargaining agreement between Canada Post and the Canadian Union of Postal Workers. The CUPW believes that striking will prove to be an effective method in ensuring a fair agreement for employees of Canada Post. However, all they are doing is hurting the much despised government-operated corporation.

As rotating strikes hit many regional distribution centers across the country, distribution of mail in Canada has been slowed to a snail’s pace. On top of this, these strikes are not expected to end any time soon and are not uncommon. Almost every time that a new CBA must be negotiated between Canada Post and the CUPW, the workers strike and demand more benefits and pay. This is doing nothing but annoying Canadian consumers and forcing them to lose trust in the once-beloved crown corporation. The only logical solution for the Canadian consumer in this situation would be to boycott Canada Post altogether and make the switch from public mail distribution systems to private ones, such as UPS and FedEx, when sending and receiving both mail and parcels. This solution will not only show the government how the Canadian people are losing trust in Canada Post and crown corporations but will put Canada Post in a state of financial danger if done correctly.

A Government Failure

The main problem that comes with the mere existence of a corporation such as Canada Post is that it is owned and controlled by the government of Canada, yet it does not maintain a monopoly over the mail system as a whole in Canada. While Canada Post does maintain a massive market share, it has nowhere near enough of a market share to choke out its competitors that are privately run. On top of this, these private competitors have often exceeded Canada Post in terms of quality of service and customer satisfaction. My question to the Canadian taxpayer is this: Why do we continue to allow ourselves to pay our income to support an overpriced government-owned corporation that is often beat out by its competitors?

Under no circumstances does it make sense for the Canadian consumer to support a crown corporation with tax dollars and also have to pay to use the service provided by the said crown corporation. This financial ineffectiveness on the part of Canada Post only plays into the fact that governments are inept at creating and managing businesses in the free market. If Canada Post were a private corporation, but still maintained this deplorable level of service, there is absolutely no way that it would survive in the free market, being forced to compete with giants such as FedEx and UPS. The only way Canada Post continues to exist is through the extortion of the Canadian taxpayer.

The only solution to the Canada Post conundrum is to pressure the Canadian government into selling the corporation to a private owner. At the very least, the Canadian government should open up the market to allow more private options to the consumer. This would only happen through a minimizing of the size of Canada Post’s responsibilities, and the size of the business as a whole. However, we should seek for the Canadian government to abolish Canada Post. The Canadian consumer would be better serviced in the postal industry by a series of privately owned corporations, competing in a free market without government intervention.


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The Free Market is a Better Alternative to Government

By Josh Hughes | United States

Most libertarians believe that, to an extent, the “free market” is superior to the government. But is this really true? Can private enterprises and consumers completely and voluntarily fund the services that are enjoyed today? If so, are they capable of producing such services at a more efficient and cost-effective rate? The answer, in theory, is always yes.

Can the Market Do Everything That Government Can?

Think of any service that is offered by the government. There are dozens, ranging from something as simple as the post office and sanitation services, to more complex and serious things such as domestic and foreign defense. Simple, everyday tasks that people are accustomed to being carried out by government employees can just as easily be done in the private sector. Private schools, for example, perform the same job as public schools but are done through completely voluntary means. In many instances, the quality of education is higher as well.

But some services just can’t be provided by the free market, right? Many cite defense and legal dilemmas as areas that need government control or interference. This simply just is never necessary. An example that many are fond of is illustrated by Llewellyn Rockwell, Jr. in his anarcho-capitalist manifesto, Against the State. In it, one is asked to consider for a moment that shoes have been provided to children until the age of 18 by the government for as long as anyone can remember. Since society has become so used to this, and the market has never had the ability to compete, one naturally finds it foolish to question the government’s provision here. It can be assumed that many people would actually become quite defensive when the question of “Can the market do it better?” arises.

This is the case with every single service society enjoys. People don’t consider how the market and private individuals can better provide a service because it’s never been attempted.

“But Who Will Build the Roads?”

This is a challenge often brought up when taxation or government abolition is brought up. The answer is simple. The same individuals that politicians contract will build the roads. Your neighbors and peers who are civil engineers and construction workers will still build the roads. “But who will pay for it?” Private citizens will still fund the projects, just as they already do now. Instead of the violent coercion the government forces, however, it will be in the form of voluntary transactions such as tolls or user fees. Domestic defense will still be provided by private individuals, except now instead of an all-powerful police force, it will be a subscription to a privately regulated enterprise. This is true for everything. It will all be paid for and provided by the same individuals that pay for and provide it now, only this time it will be done voluntarily in the form of subscriptions, user fees, and tolls. No more will you be forced to give your hard-earned money to an agency of men in Washington, D.C. that decide where they feel it will be best spent. In the ideal society, you the individual know where to spend your money best.

Other Counterarguments

Extortion/Monopolies

Another question often raised is “What happens when a company establishes a monopoly over a service, then proceeds to extort its users?” This is a very tough, but solvable, dilemma. An answer would be responsibility of the market. Individuals must not be put in the situation where they can be exploited and must provide competing services themselves. If this is unavailable, then the market must pressure the monopoly and force them to either break up or not extort consumers by refusing the monopoly and its workers service. The market will always regulate itself.

Discrimination

“What happens when a business decides to discriminate against a group of people, whether on the basis of race, religion, gender, or orientation?” In this instance, individuals and the market will again regulate itself. Minorities are more empowered today than they have ever been before. Through advances in technology, avenues such as social media and sites like Yelp will spread the decisions of businesses. Say, for example, a restaurant refuses service to an African-American woman because of her race. She can then go to Instagram or Twitter and share her experience, where it can then be seen by thousands of people. The business will suffer the consequences, as now people will refuse to go there and instead opt to go to a restaurant that serves all people.

Environment

Another main issue is environmental regulations. The EPA currently sets the standards for businesses to follow when it comes to regulations, but without a government, who will do that for us? Again, the answer is the market. Similar to the case of monopolies, other businesses and individuals will set sanctions against or boycott companies that practice in ways that are detrimental to the environment. This pressure will force the companies to change their ways or to shut down.

The Market Will Prevail

If you’ve paid attention, you have noticed that the same phrase has been repeated many times. “The free market will solve the issue.” This is the main philosophy behind most libertarian thought. The free market will solve any and every issue, and can better perform every service offered by the government. The untouched market has competition whereas the government is a monopoly. The market has drive and incentives while the government is lazy and incompetent. The market is voluntary and free, a stark contrast against the government who is coercive and aggressive. The market can and will solve every problem presented to society without the need of the government.


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How the Government Held Back the Second Industrial Revolution

By Mason Mohon | USA

Between the end of the Civil War and the beginning of the 20th century, the American economy experienced growth like no country had ever seen before in the entire history of the world. The discovery of lots of oil, along with the progression of electricity, expanded logging industries, and advancements in mining gold and silver created profound economic growth. New investments from overseas stimulated the American economy and migrant workers provided cheap menial labor. The development of steel lead the railroad system to a great multitude of new locations.

This age in American development was also seemingly plagued by the ills of the free market and was only held through because of government intervention. That is what historians see, and that is what the textbooks teach. Labor conditions were horrible, income inequality increased, and robber barons took over the oil industry. The issue with this, though, is that people look at it with no depth. They take everything at an economically uneducated mainstream face value. A deeper look into the issues afflicting America must be taken if we want to truly see what harmed and benefited the United States during this time.

In the first place, we must look a bit at what did not happen, and where funds did not go. This is important because of what Bastiat described as the seen versus the unseen. In one of his most famous essays, he wrote the following “There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.” What this means is that we saw the consequences of what happened in history, but to find out if what we did was as beneficial as it could have been, we need to look at the consequences of the potential action that was not taken. This is especially important for the second industrial revolution., because the government did intervene, and growth did happen, but correlation doesn’t equal causation. We must look to what we know to be economic law, and what is true in all instances, and look at what did and didn’t happen.

Many argue that the government’s subsidies and land grants to the railroad industry allowed the economy to boost, and even more, that they were instrumental and critical to the economic growth that happened. This is not true at all. The subsidies that went to the railroad industry went there because the money was taxed from people around the United States. This was money that could have gone places consumers wished for them to go. There is no way to gauge demand for a government agency, so instead, they must bring in scientists who make a guess as to where the best place to promote industry would be. An astounding amount of money went from the government, after it had been stolen to the taxpayers, and went to what there wasn’t necessarily demand for. The railroad industry would have flourished, and maybe even in more economically strategic places without the government’s “help.”

Furthermore, this was seen as the age of the “robber barons,” with men like Rockefeller, Morgan, and Carnegie dominating economic industries, both by cutting prices to beat out competition and by buying out the entire process of producing the good that dominates their industries. Many do not like what these men did and see it as sensible as to why antitrust laws were passed soon after. The issue, though, is that many men of great industry in these times colluded with government to benefit their industry. When it comes to monopolies, you can achieve one in two ways: the natural way, which means serving consumer demand better than everyone else, or the unnatural way of working through government subsidy and regulations to get a foot up on the industry. The second method was the one used primarily in these days because of the lack of lobbying laws. It was not a flaw in the market that these men climbed to the top, but rather it was collusion with the state, the ultimate organization of violence.

Lastly, the poor working conditions and the profound income inequality is seen by many to be a flaw in the upgrading capitalist system. The issue with this is that the workers may have had a tough working environment, but it was better than the alternative of starving by not working or the economy staying behind and everyone continuing to live in a sort of agrarian post civil war economy. The real wages of the workers increased in these times because the development of chain companies, steel for transport, and electricity, which all worked to drive down the price of goods. The conditions of each worker was actually improving from what it had been. At the same time, inequality in income is not an inherently bad thing. The way capitalist economies have tended to work is the rich get richer, and the poor get richer at a slightly lower rate, contrary to the Marxist joke.

In the end, we must realize that we cannot take what happened during the second industrial revolution at face value without looking at economic law and applying it. The point of studying history is to learn from the mistakes of those in the past, so what we must mainly learn is that government subsidies put money into places where there is not necessarily demand and that corporate lobbying is the primary cause of unnatural and harmful monopolies.