When one buys something, it is a basic assumption that what has been bought is theirs. It is also a basic and just assumption that they get to choose how what they have bought is handled and delivered to them. According to the South African Post Office (Sapo), however, these assumptions are absurd.
Sapo has been in financial difficulties for a while. Like most state-owned entities (SOEs), its performance has deteriorated over the years. Stories of citizens waiting for months for parcels to be delivered are a dime a dozen.
In an effort to remedy this, Sapo is lobbying the state to force us, as citizens, to have them and their dysfunctional system deliver our goods to us.
Sapo is proposing a law that will bar courier companies from delivering parcels of 1kg or less.
Most people have sentimental attachments to SOEs. The thought of an SOE going bankrupt seems as unbelievable as a talking animal. Yet, for survival, SOEs must commit injustice after injustice in the market. For their survival, SOEs often need the use of the state’s legislative force to be shielded from market forces.
What those who don’t want SOEs to fail don’t realise, is that failure in the market means those resources tied up in failing institutions would be freed up for other more productive activities when that business fails.
So, when a failing business is continually bailed out by the state (and the taxpayer), the effect is larger in lost opportunities that could be pursued with those resources had there not been a bailout or intervention in the form of legislative protection from market competition.
The Competition Commission has been silent on the matter proposed by Sapo. The idea that there is a segment of the market that ought to be free from competition (like the 1kg or less parcel segment) is contrary to every tenet of anti-trust law; misguided as those tenets may be. A single company being protected from competition is contrary to a free and efficient market.
Isn’t this an imperative which must be pursued by competition authorities?
In South Africa we have an issue with consumer rights; more aptly, the disregard concerning consumer choice. If a particular consumer chooses for their parcel to be delivered by a company other than the Sapo then, as citizens with dignity and freedom, they are free to do so.
Their being forced to choose Sapo is an unjust and unjustified inhibition on their basic freedoms – of which choice is one.
More economic freedom leads to better living conditions. Yet, government and its enterprises seem to think decreasing economic freedom and choices in a struggling economy like ours is the way to go.
Sapo has neither the right nor the entitlement to deliver our parcels that weigh 1kg or less. The fact that this needs to be said shows the anti-freedom stance that has been adopted by the government and its enterprises. It is as if they have forgotten that our freedoms are not given to us by the state or government. Entities like Sapo and the state are the results of the exercise of these freedoms.
South Africa currently has thriving courier businesses, delivering all manner of packages. These couriers were able to succeed due to the sheer incompetence and inefficiency in economic terms, of Sapo. The fact that they exist shows that they are fulfilling a function. The state, seeking to eliminate productive private businesses in an effort to protect an unproductive, inefficient one would be the height of injustice.
Online companies that are reliant on couriers for their deliveries will suffer greatly. These companies have foregone Sapo for a reason, and simply barring them from using other courier services will have an impact on their business models. When Sapo predictably fails at doing deliveries as efficiently as private companies, this will have a knock on effect on these online retailers; another negative consequence our already weakened economy doesn’t need.
Sapo has no business forcing itself on consumers. Protected markets, like what Sapo is proposing, are economically inefficient. The electricity market in South Africa, protected by legislation for Eskom, should be instructive. The lack of alternative that is the norm in the energy market will be transferred to the parcel business. One shudders at the thought!
Sapo should rather focus on ways to improve its business model and its overall operations. Instead of seeking to be protected from competition, it should welcome the ingenuity of South Africans to start businesses that make up for eirher the lack of capacity or the basic incompetence of Sapo.
Instead of seeking to monopolise the courier space, more competition within it should be permitted. The last thing our economy needs are more barricaded markets, further depressing our less than encouraging economic prospects.
Mthembu has BA Law LLB (Wits) and is a legal researcher at the Free Market Foundation.