Sunday, August 8, 2010

On Government Monopoly

This passage struck me as extremely prescient in light of America's self-inflicted wound of Obamacare. From Rose Wilder Lane's magisterial The Discovery of Freedom:

The effects of the American Revolution have been disrupting the old planned economies of western Europe for a century. But remnants of these Government monopolies everywhere survive, and European belief in Authority has extended Government monopoly over many products of the industrial revolution.

Railroads, telegraph, telephone, radio, are Government monopolies everywhere outside this Republic. Salt and tobacco remain Government monopolies in many places. All Europeans and Asiatics take these monopolies for granted. It no more occurs to them that salt, tobacco, railroads, telegraph, telephones, radio, need not be owned by Government, than it occurs to Americans that the postal service need not be.

So an American abroad discovered at once that Government monopoly is absolute, and that therefore it operates under difficulties that make it destructive to the Government.

Being absolute, and maintained by police force, a Government monopoly need not please its customers.

A traveler in Europe obeys the railway officials and takes the service they provide, or he does not travel by train. He can not, so to speak, get mad at the New York Central and give his patronage to the B. and O., or vice versa, because Government monopoly has no competitor. The passenger who pays for his ticket has no effect upon that monopoly; it need not fear his displeasure, not lure him with club cars and Idaho baked potatoes. And it doesn't.

Government monopoly need not make a profit; it can run indefinitely on a deficit, as the American postal service does. Taxes make up the deficit; the Government collects them.

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