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.
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 three
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.
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