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.
For some reason this statement (an excuse for the persistent unemployment in spite of government stimulus) from our Innovator-in-Chief Barack Obama springs to mind:
There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate.
Imagine if the federal government had nationalized the photography business in the early 20th century. If it had done so then today would I have a cellular phone that gives me the ability to take an unlimited number of images? How might our postage system be different today if at an earlier point in time the federal government had backed off and allowed private companies to increase quality and decrease costs through competition and innovation?
See also, recently published at PJM and related to this subject, Michael Espersen’s very persuasive case to Privatize the Schools.