Lessons in disruption from the 19th Century


Today’s world is in many ways at a crossroads, especially as technology and innovation continually reshape the economy, specifically models of service delivery. Think Uber, Khan Academy and even Bitcoin. New and exciting ways to innovate and disrupt capture our collective attention as we wonder what the future might bring.

It causes one to wonder: How long can some industries insulate themselves from the coming storm and resist competition? And how long can public services survive in a world where private, digital solutions move faster than government by orders of magnitude?

There were other Americans in history who faced this challenge, but the major players are still the same. Would the visionaries of the 19th century (considered by some at the time to be crackpots) have been able to fight the inertia of today’s massive bureaucracy?

The story of Lysander Spooner comes to mind. In the mid-1800s, he endeavored to provide a more efficient method of delivering mail than the early Post Office. He was repeatedly targeted and punished by the U.S. Federal Government for his efforts.

Spooner was born on a farm outside Athol, Massachusetts in the frigid January of 1808. His family were outspoken abolitionists, and as a young man, Lysander Spooner immersed himself in the law, clerking under future Chief Justice of the Supreme Court, Charles Allen. He became an activist for many causes related to individual liberty, which led him to confront the United States Postal Service and its shoddy work.

Spooner succeeded in his early efforts to provide a better mail service at a lower cost. In 1844, postal rates had become so expensive, Spooner determined competition was sorely needed. It cost 18 ¾ cents to send a letter from Boston to New York and 25 cents to get it to Washington D.C. A letter sent from Boston to Albany, written on a quarter-ounce sheet of paper cost almost as much as the Western Railroad’s freight charge to carry a barrel of flour along the same route.

To answer this, Spooner offered to carry letters daily in between each of the early American hubs: Baltimore, Philadelphia, New York and Boston (twice daily between Philadelphia and New York) for only 6 ¼ cents per half-ounce letter. He audaciously dubbed his outfit the “American Letter Mail Company.”

He was fiercely targeted by Congress and the Postal Service for usurping their de facto monopoly on letter delivery. Multiple suits were filed against Spooner and his rebel cohorts for infractions like using Postal-owned railways for his letter-carrying, but the courts absolved him and even expressed doubt that the Federal Government could monopolize mail delivery under the Constitution.

By mid-1845, Congress saw no other option that to lower rates. It was decreed that any letter weighted under a half-ounce and delivered within 300 miles would only cost 5 cents. Spooner was making a measurable impact on the cost of mail delivery for early Americans, demonstrating a real-world need for competition.

He lowered his rates in turn, but by 1851, Congress had enacted multiple protections on the government monopoly of mail, included the power of the Post Office to declare any local road a post road. This move crippled the American Letter Mail Company, along with a handful of other private mail carriers still in operation, and Spooner had to disband it.

He died in 1877, and not much has been told about him since, but his story bears remembrance. Like so many innovators and entrepreneurs today, Spooner faced the prospect of a government so cumbersome, yet so protective of its own power, that an existential threat from a more nimble, more efficient private actor meant he had to be quashed.

Tech entrepreneurs – the disruptors – are needed now more than ever to challenge the status quo across the economy. Americans are demanding more responsive, individually-tailored services. Who among us believes that our government agencies today would thrive under new competition with an army of 21st-century Lysander Spooners?


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