First appeared in Jewish World Review
The news that Eastman Kodak is preparing to file for
bankruptcy, after being the leading photographic company in the world for more
than a hundred years, truly marks the end of an era.
The skills required to use the cameras and chemicals
required by the photography of the mid-19th century were far beyond those of
most people — until a man named George Eastman created a company called Kodak,
which made cameras that ordinary people could use.
It was Kodak's humble and affordable box Brownie that put
photography on the map for millions of people, who just wanted to take simple
pictures of family, friends and places they visited.
As the complicated photographic plates used by 19th century
photographers gave way to film, Kodak became the leading film maker of the 20th
century. But sales of film declined for the first time in 2000, and sales of
digital cameras surpassed the sales of film cameras just 3 years later. Just as
Kodak's technology made older modes of photography obsolete more than a hundred
years ago, so the new technology of the digital age has left Kodak behind.
Great names of companies in other fields have likewise
vanished as new technology brought new rivals to the forefront, or else made
the whole product obsolete, as happened with typewriters, slide rules and other
products now remembered only by an older generation. That is what happens in a
market economy and we all benefit from it as consumers.
Unfortunately, that is not what happens in government. The
post office is a classic example. Post offices were once even more important
than Eastman Kodak, and for a longer time, as the mail provided vital
communications linking people and organizations across thousands of miles. But,
today, technology has moved even further beyond the post office than it has
beyond Eastman Kodak.
The difference is that, although the Postal Service is
technically a private business, its income doesn't cover all its costs — and
taxpayers are on the hook for the difference.
Moreover, the government makes it illegal for anyone else to
put anything into your mail box, even though you bought the mail box and it is
your property. That means you don't have the option to have some other private
company deliver your mail.
In India, when private companies like Federal Express and
United Parcel Service were allowed to deliver mail, the amount of mail
delivered by that country's post offices was cut in half between 2000 and 2005.
What should be the fate of the Postal Service in the United
States? In a sense, no one really knows. Nor is there any reason why they
should.
The real answer to the question whether the Postal Service
is worth what it is costing can be found only when various indirect government
subsidies stop and when the government stops forbidding others from carrying
the mail — if that ever happens.
If FedEx, UPS or someone else can carry the mail cheaper or
better than the Postal Service, there is no reason why the public should not
get the benefit of having their mail delivered cheaper or better.
Politics is the reason why no such test is likely any time
soon. Various special interests currently benefit from the way the post office
is run — and especially by the way government backing keeps it afloat.
Junk mail, for example, does not have to cover all its
costs. You might be happy to get less junk mail if it had to pay a postage rate
that covered the full cost of delivering it. But people who send junk mail
would lobby Congress to stay on the gravy train.
So would people who live in remote areas, where the cost of
delivering all mail is higher. But if people who decide to live in remote areas
don't pay the costs that their decision imposes on the Postal Service, electric
utilities and others, why should other people be forced to pay those costs?
A society in which some people make decisions, and other
people are forced to pay the costs created by those decisions, is a society
where a lot of decisions can be made despite their costs being greater than
their benefits.
That is why the post office should have to face competition
in the market, instead of lobbying politicians for government help. We cannot
preserve everything that was once useful.
