SPEAKER_02: Amazing, fascinating stories of inventions, ideas and innovations. Yes, this is the podcast about the things that have helped to shape our lives. Podcasts from the BBC World Service are supported by advertising. 50 Things That Made the Modern Economy with Tim Harford
SPEAKER_01: It should be remembered that in few departments have important reforms been affected by those trained up in practical familiarity with their details. The men to detect blemishes and defects are among those who have not by long familiarity been made insensible to them.
SPEAKER_00: Those words are from 1837. An early pitch from an aspiring management consultant? No, that profession was still nearly a century off. But it was in effect the role Rowland Hill had taken it upon himself to perform for Great Britain's Postal Service. Hill was a former schoolmaster whose only experience of the post office was as a disgruntled user. Nobody had asked him to come up with a detailed proposal for completely revamping it. He did the research in his spare time, wrote up his analysis and sent it off privately to the British Finance Minister, the Chancellor of the Exchequer, naively confident that a right
SPEAKER_01: understanding of my plan must secure its adoption. He was soon to get a lesson in human nature.
SPEAKER_00: People whose careers depend on a system, no matter how inefficient it might be, won't necessarily welcome a total outsider turning up with a meticulously argued diagnosis of its faults and proposal for improvements. Utterly fallacious, most preposterous,
SPEAKER_00: fulminated the Secretary of the Post Office, Colonel Mabilly. Wild, extraordinary. That was
SPEAKER_00: the Earl of Lichfield, the Postmaster General. Brushed off by the Chancellor, Hill changed tack. He printed and distributed his proposals. He added a preface explaining why his very lack of experience in the Postal Service qualified him to detect its blemishes and defects. He wasn't the only person frustrated with the system and everyone who read his manifesto, and who wasn't employed by the Post Office, agreed that it made perfect sense. The Spectator magazine campaigned for Hill's reforms. There were petitions. The Society for the Diffusion of Useful Knowledge made representations. Within three years, the government had bowed to public pressure and appointed a Post Office supremo, Roland Hill himself. What were the problems Hill identified? Back then, you didn't pay to send a letter, you paid to receive one. The pricing formula was complicated and usually prohibitively expensive. If the postman knocked on your door in the city of Birmingham, say, with a three-page letter from London, he'd let you read it only if you coughed up two shillings and thrupence. That wasn't far below the average daily wage, even though the whole missive might not weigh a quarter of an ounce. That's just a few grams. People found
SPEAKER_00: workarounds. Members of Parliament could send letters free of charge. If you happen to know one, they might frank your letters as a favour. The free-franking privilege was widely abused. By the 1830s, MPs were apparently penning an improbable seven million letters a year. Another common trick was to send coded messages through small variations in the address. You and I might agree that if you sent me an envelope addressed Tim Harford, that would signify you were well. If you addressed it Mr. T Harford, I would understand you needed help. When the postman knocked, I would inspect the envelope and refuse to pay. Hill's solution was a bold two-step reform. Senders, not recipients, would be asked to pay for postage and it would be cheap, one penny, regardless of distance, for letters of up to half an ounce, 14 grams. Hill thought it would be worth running the post at a loss to stimulate what he called the productive power of the country. But he made the case that profits would actually go up because if letters were cheaper to send, people would send more of them. A few years ago, the Indian-born economist C.K. Prahalad argued there was a fortune to be made by catering to what he called the bottom of the pyramid, the poor and lower middle class of the developing world. They didn't have a lot of money as individuals, but they had a lot of money when you put them all together. Rowland Hill was more than a century and a half ahead of him. He pointed to a case when small payments from large numbers of poor people had mounted up for the government. Duties on malt and ardent spirits, which beyond all doubt are
SPEAKER_01: principally consumed by the poorer classes, brought in much more than those on wine, the beverage of the wealthy. Hill concluded, slightly disparagingly, the wish to correspond
SPEAKER_01: with their friends may not be so strong or so general as the desire for fermented liquors, but facts have come to my knowledge tending to show that, but for the high rate of postage, many a letter would be written and many a heart gladdened too, where the revenue and the feelings of friends now suffer alike. In 1840, the first year of Penny Post, the number of letters sent
SPEAKER_00: more than doubled. Within 10 years, it had doubled again. It took just three years for postage stamps to be introduced in Switzerland and Brazil, a little longer in America, and by 1860, 90 countries had them. Hill had shown that the fortune at the bottom of the pyramid was there to be mined. Cheap postage brought the world some recognizably modern problems, junk mail, scams, and a growing demand for immediate response. Half a century on from Hill's Penny Post, deliveries in London were as frequent as hourly, and replies were expected by return of post. But did the Penny Post also diffuse useful knowledge and stimulate productive power? The economists Daron Acemoglu, Jacob Moscona, and James Robinson recently came up with an ingenious test of this idea in the United States. They gathered data on the spread of post offices in the 19th century and the number of applications for patents from different parts of the country. New post offices did indeed predict more inventiveness, just as Hill would have expected. Nowadays, what we call snail mail looks to be in terminal decline. There are so many other ways to gladden our friends' hearts. Meanwhile, the average office worker gets well over a hundred emails a day. We no longer need societies to promote the diffusion of useful knowledge, we need better ways to distill it. But Acemoglu and his colleagues think the 19th century postal service does have a lesson to teach us today. That government policy and institutional design have the power to support technological progress. So what current blemishes and defects in these areas might be holding progress back? We need the successors of Rowland Hill to tell us. We're indebted to the 1880 book The Life of Sir
SPEAKER_02: Rowland Hill and the History of Penny Postage. For a full list of our sources please see bbcworldservice.com slash 50 things. Hello, I'm Marnie Chesterton and I present the CrowdScience
SPEAKER_03: podcast from the BBC World Service. CrowdScience is a podcast that has the sweet remit of taking our listeners questions about anything scientific and trying to answer them with the help of scientists from around the world. We get everything from is there life after death and what's beyond the limits of the universe to what's inside the dust in my vacuum cleaner. CrowdScience goes to wherever the cutting-edge research is taking place. I've been put on a starvation diet, I've gargled with millions of viruses, I've had to run alongside marathon runners in the dark in almost horizontal range during a hurricane in Greece. But that's part of the show, we try and get to where people are doing things, where people are trialing things and you see the science taking place before your eyes. That's CrowdScience from the BBC World Service. Just search for CrowdScience wherever you get your podcasts.
