Toward the end of the 20th century, India began to loosen up some of its jungle of rules and regulations that were strangling India’s businesses. Though India is still a long way from a free market, just the relaxing of some of its economic restrictions was enough to promote a higher rate of growth and a substantial reduction in poverty.
They even allowed a Japanese car maker to build cars in India. This resulted in a car called the Maruti, which quickly shot to the top as the most popular car in India. Even more remarkable, it led to some improvements in the Ambassador. A British newspaper said that the Ambassador now had “perceptible acceleration.”
Now that there was competition, the distinguished British magazine “The Economist” announced, “Marutis too are improving, in anticipation of the next invaders.”
Perhaps the last chapter in the story of the Ambassador has now been written. Hindustan Motors recently announced that it was closing — indefinitely — the factory where the Ambassador was built.
According to the Wall Street Journal, “The company cited low productivity, ‘a critical shortage of funds’ and a lack of demand for its core product, the Ambassador.”
Doesn’t that sound a little like our post office?
Our post office has had a long run as a government protected monopoly. But just a partial erosion of that monopoly, with the appearance of United Parcel Service and Federal Express, has threatened the viability of the post office.
Ironically, India has partially privatized its post office by letting private companies deliver mail. The government post office’s deliveries of mail dropped from 16 billion to less than 8 billion in just six years, even though the population of India was growing.
You can always keep anything old, clunky and inefficient still in business, if you are willing to pour unlimited amounts of the taxpayers’ money down a bottomless pit.
Hindustan Motors had to shut their doors when they ran out of money. How long will we continue to keep our own version of the Hindustan Ambassador on life support at the expense of the taxpayers, and of captive customers who are not even allowed by law to decide who can put mail in the boxes that the customers bought?