Kodak and the Post Office (Thomas Sowell)

Creators Syndicate ^ | January 10, 2012 | Thomas Sowell

[jazusamo]

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.

[HamiltonJay]

FEDEX and UPS would never deliver mail to ALL residents on a regular basis, its not profitable.. they would cherry pick the profitable routes and leave those unprofitable to rot.

Comparing the Mail service, which our legal system is based around existing and functioning, to a purely private industry is nonsense.

Of all the issues with government waste, ensuring that everyone in American can recieve mail is not spending that really bothers me or the budget.

If anything, the fact the USPS exists has been a net boon for our nation, throughout its history. The reason its failing financially right now has to do with poor congressional oversight than anything else. Mandating huge retirement contributions well above anything in private industry in a downturn.

However even if the USPS needed subsidised, I have no issues with that, if my tax dollars are going to be spent on something spending it on making sure folks can receiveng and send mail is a function of government that doesn’t bother me.

[ctdonath2]

What happened? See #32 above. I was there.

[Wuli]

“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.”

My parents owned more than one of the Kodak “Brownie” cameras when I as a small child. I think the “Brownie” cameras took most of our family pictures in the late 1940s and 1950s.

[ctdonath2]

So have USPS outsource to them, on the condition of universal coverage. Heck, USPS already outsources much of the package delivery thereto.

[HamiltonJay]

Kodak invented digital photography.. they didn’t transition fast enough to it though.. they didn’t see the threat soon enough, and suffered from arrogance that people would never leave their brand.

They did the same thing with film in 1984 when they let FUJI win the olympic film sponsorship... they arrogantly thought they were so ubiquitous in the american mind that no one would desert them, they didn’t need it. Fuji got the win, and they saw a market they literally created and owned slowly lose share to them.

Kodak is clearly in trouble, but I am not going to write them off yet. They do have a problem in that now not only has film gone away, but the very idea of a digital camera for the regular joe is gone, they all just use their cell phones for most things. Now they use technology that KODAK invented in those phones, but sadly they aren’t getting paid for it... Kodak did just get a big payout for licensing this past quarter from some manufacturers for patent use, but that same division had made $0 for the last year plus.

I don’t know what if anything Kodak can do.. their entire market, well non professional market anyway, is literally gone now. Enforcing their patents and getting fees and continuing digital research would be a viable model for a company, but it will be nowhere near the scale and scope that Kodak is today.

[trumandogz]

I doubt that the guy who made the Fed-Ex presentation proposed that the consumer be able to send a letter across the country for a few pennies.

[ladyjane]

Now let’s take a look at their retirement plan. That’s the problem.

No. The post office has many problems, e.g., attitude, performance, the union, poor management, lack of accountability, subsidies, on and on.

[DB]

Those days have long passed. People have communications now essentially no matter where they live, post office or not post office. In those days it was the only means of long distance communications and was essential - communications is still essential, but the post office no longer provides it.

[HamiltonJay]

They won’t do it... UPS and FEDEX cherry pick their deliveries for a REASON, they don’t guarantee delivery to everyone in the country.. there is a reason for that folks. Like it or not the USPS is the only entity that does that, and the only one who EVER will.

Combine that with the fact of legal obligations etc that the USPS is under.. IE, certfied mail is recognized by our legal system, and required for legal action on many items. Not dump it on the porch and run away, or better yet throw it over a wall.

Of all the waste that government involves itself in, keep the USPS operating is not even on the radar. Even if they were subsidised 100% which they aren’t, the amount is insignificant as a part of the federal budget.

Government spending for this purpose, if they need to, doesn’t bother me at all, its crucial to the proper operation of legal and commerce systems. To believe otherwise is naive, and its overall gain to the economy even if it would need to be subsidized is far beyond what any tax dollars would be.

Advocating the killing or privatization of the USPS is silly IMHO, the post office existence is mandated by the constitution, and its existence is a huge net gain to our nation, even if most folks don’t see it because all they get are junk mail and flyers. It serves a very vital function that is so intertwined into business and the law that ending it or “privatizing” is just silliness.

Reagan fired the Air Traffic Controllers, he didn’t privatize them... remember folks, privatization can be a good thing at times, but worshiping at the alter of the almight market as though it is the answer to all ills is no less idiotic than worshipping at the alter of almighty government as the solution to all ills.

[ctdonath2]

Naw, he was just deranged enough to propose the consumer be able to send any sized package across the country, overnight, guaranteed, for a few bucks.

USPS may send a letter for pennies, but there’s no guarantee when it will arrive.

[ctdonath2]

Methinks USPS should revert to the library model: office in every town, with office-to-office delivery guaranteed as a Constitutional obligation. The door-to-door thing is a step beyond what’s required, and is a relatively recent phenomenon.

Just to stir the pot: one could argue that due to technological advances the Constitutional “post office” clause could cover email as well, requiring USPS provide at least basic email service.

[Wuli]

Against the changes that came with the “PC age”, IBM reinvented itself by building on its intellectual strengths - looking at how could it redirect the knowledge resources of its human and intellectual (patents) capital. It’s still among the largest “mainframe” computer companies in the world, but other lines of business now overshadow that legacy business-line (once its largest), in terms of annual revenue and profits.

Kodak attempted to adapt to the “digital” age in photography and photo-printing, but not soon enough, not quickly enough and with a lack of vision.

It’s too bad. It could have reinvented itself, as IBM did, building on redirecting where and how to apply its intellectual strengths, and preserving capital by scaling back and dumping diminishing business lines faster. I guess the one word that identifies the strength that IBM had and Kodak has not had is “nimble”.

[Atlas Sneezed]

Isn’t the post office established by the Constitution?

---

No.

It is PERMITTED by the Constitution. Not all that is permissible is mandatory.

[DB]

As I read it, the constitution only authorizes congress to create a federal post office, it did not require it.

[mc5cents]

The USPS should upgrade its methods and join the 21st century,

And the first "method" it should upgrade is hiring less "supervisors" and firing about 50% of the ones they have now. The USPS is VERY top heavy and has been for a long time.

[rawcatslyentist]

>"The brilliant man who should have been our first black president "

He still could be!

I have doubts that ole B Wacky Insane~0 is black. I think he's listed as Arab.

That would be the ONLY reason I can think of to hide his real BC.

[Still Thinking]

It was Kodak's humble and affordable box Brownie that put photography on the map for millions of people

I had one my very own self!

[Still Thinking]

Plenty of small shops catering to professional film afficianodos can still develope it even if big box retail development disappears.

Be a man. Use your hands.

[Still Thinking]

The author needs to check the cost to have UPS/FedX deliver a 1oz letter to an address across the street.

But that may just be because they don't have the volume of the post office (mail delivered to every house on every street every day), nor the convenience of dumping all the mail for the entire block at one set of mailboxes at the end of the block, nor even using the street-side mailboxes in rural locations, so it's not really an apples to apples comparison. The UPS guy is lucky if he delivers three packages on the same block on a given day (in a residential neighborhood), so they're forced to operate in a much less efficient paradigm.

Now the USPS loses money, so UPS letter service even on a level playing field might end up being $0.75 or something, or maybe the losses are all PC bullcrap and mismanagement at the USPS, so maybe UPS/FedUp could do it for $0.44 and make money, I have no idea, but they wouldn't be charging $8.00 a letter or whatever the rate is now. Completely different game.

[Still Thinking]

Yeah, and the Chinese invented gunpowder and paper. That gave them fireworks. When westerners got their hands on it we got canons and books.

I thought a canon WAS a book, at least if one prints it.