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E-mail Print How the Government Plays Monopoly
Capital Ideas
By: K. Lloyd Billingsley
5.15.2000

Capital IdeasCapital Ideas

SACRAMENTO, CA -- The lawyers at the United States Department of Justice are giving each other high fives
because they convinced a judge, if not many observers, that the Microsoft company is a monopoly that quashes
competition. The case reveals a curious double standard because some undeniable monopolies, harmful to the
public, are not targeted with anti-trust action but instead get special protection.

Microsoft may be a big software company, but it's about the stature of Mini-Me when compared with the
government education monopoly, a true colossus with a voracious appetite. The governments of 50 states hand
countless billions of taxpayer dollars--more than $40 billion annually in California alone--directly to a vast bureaucracy that makes the key decisions on education. It's a government utility with guaranteed funding and captive clients. It controls 90 percent of the market but that's not the only indication of its clear monopoly status.

True monopolies resist innovation and that is the hallmark of the education establishment. Promoters of
merit pay, higher standards, longer school years, charter schools, and other reforms quickly find
themselves assailed by shrill reactionaries dedicated to the status quo. That is why, as author Richard
Mitchell has noted, even the best attempts at reform get co-opted by a system offering bad products at high
prices. Without competition, the system has virtually no incentive to reform. Its failures have fueled a
growing movement for educational choice that would provide competition. But the education monopoly
establishment, from the federal Department of Education through the teacher cartels, marshals its considerable
power to block such liberation.

This works out fine for those who make a lot of money off the system, enabling them to send their own
children to exclusive private schools. But it traps many children in failed, dangerous schools, often
leaving them intellectually handicapped for life, and robbing them of their future. Meanwhile, another
protected monopoly creates problems of a different sort.

The United States Postal Service makes you wonder about the use of the term "service." A letter by a member of my household, sent "priority mail" from Sacramento on a Friday, took until the following Thursday to reach San Diego, 90 minutes away by plane. This constitutes a priority over what? Delivery by a team of yaks?

With its monopoly on first-class mail protecting it from competition, the Postal Service also resists innovation, offering no improvement on services in return for the rate hikes it regularly demands. It even tried to monopolize fax transmissions, fortunately without success. This "service" also quashes competition, pushing for restrictions on the private mailbox and shipping businesses popular with customers who want to move with the speed of the information age, not the stone age.

Customers can send mail electronically without ever using a Microsoft product, but it is difficult if not
impossible for citizens to avoid both the postal and education monopolies. The Department of Justice,
legislators, and the media seem unaware that the problems created by these protected monopolies are of
greater concern than any turf war between software producers. In a civil society under the rule of law,
some monopolies should not be more equal than others.

- K. Lloyd Billingsley


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