econlife - Throwback Thursday: Was Sears, Roebuck the First Amazon? by Elaine Schwartz

#TBT: Looking back, we can say that Sears, Roebuck & Co. was the first Amazon.



Sears, Roebuck and Amazon

If you were asked how 30% of all Americans had access to 100,000 items in their homes, you might think of Amazon. Instead, the year is 1900 and the seller is Sears, Roebuck & Co. From a population of 76 million, 20 million Americans received the Sears catalogue. Through Sears, households could have items ranging from dresses to plows to tombstones delivered directly to their doorstep. They could even order some groceries.

Sears and Bezos (Roebuck left the firm he helped to start in 1895, only four years after it began.):

Where are we going? To their prefabricated homes.

Mail Order Houses

Sears’s Houses

Just imagine an Ikea delivery with more pieces. The Sears “kit homes” were sent by train. Arriving in a boxcar, they included framing lumber, cedar, and shakes. From doors to doorknobs, they had big and little parts. Sears said we could assemble it all in 90 days or less. (I suspect that the 30,000 piece home took a bit longer.)

From Sears home catalog:

Each Sears Prefab style had a name. This was the Alhambra:

Sears even sold prefabricated schoolhouses:

The house though was only the beginning. From there, Sears had the furniture, the appliances, and most of what you needed to put in and on them. Then, they completed the picture by offering mortgages in 1911.

Amazon’s Houses

As we know, Amazon sells most of what we need in our homes. And, it also sells the houses.

Two of the homes sold by Amazon:

Our Bottom Line: Infrastructure

Yes, talented entrepreneurs started a Sears and an Amazon.

But then, each uniquely optimized recently created information and transportation infrastructures for their business model. Using their era’s innovations, Richard Sears and Jeff Bezos both figured out how we could shop from home. For example, the Sears catalogue was reputedly sized as slightly smaller than the Montgomery Ward Catalog. The reason? So you would stack it at the top. Similarly, the allure of Amazon Prime makes us go there first.

Most crucially though, Sears and Bezos knew how to deliver. Sears used the newly created (1896) rural free delivery U.S. Postal Service and the railroads. For Amazon, it has also been the US Postal Service and of course, the internet.

And then they made it so easy that we could not resist…even a house.

My sources and more: For all of the facts on the Sears mail order home, this 99% Invisible podcast is perfect. But if you want more (as did I) the NY Times and MarketWatch had some Sears history and Curbed, the Amazon houses.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - Why Driving is Safer in Sweden by Elaine Schwartz

An economist might say that the optimal number of traffic fatalities depends on the cost of preventing them. Sweden disagrees.

Compared to most other countries, Sweden’s road safety is tops:



In the European Union, Sweden and Norway have the low numbers while Bulgaria and Romania (dark blue) have the most road deaths per million:

The Swedish Safety Solution

Through a “Vision Zero” strategy, Sweden is aiming for no traffic fatalities. So far, they’ve been able to almost halve the number of road-related deaths from 541 to 270 between 1996 and 2017. Why? Because Swedish traffic authorities focused on traffic laws and infrastructure instead of the drivers, walkers, and bikers.

Many of Sweden’s roads have new safety features. The wider arteries that installed guard rails between oncoming traffic diminished deaths by 80%. Their use of the 2+1 road boosted safety by having one direction-switching lane that permits passing. In addition, Sweden built more roundabouts and rotaries because they reduce how fast people drive and eliminate the hazard of left turn accidents.

But it’s about more than the flow of traffic. In places with bikers and other unprotected road users, top speed limits are 30 kilometers an hour (18.6 mph). At so low a speed, people struck by vehicles have less than a 10% chance of dying. In 50 kilometer zones, the percent rises to more than 80. On long stretches of country roads safety cameras are supposed to “nudge” people to drive more slowly rather than nab speeders.

Smiling, I can say this is what Sweden’s traffic planners avoid:

Our Bottom Line: The Cost of Road Safety

Below you can see that the Americas have 15.9 road-related fatalities per 100,000 population. In Africa that number soars to 26.6 per 100,000.




As economists we have a mindset that asks the cost of eliminating those deaths. Thinking at the margin (as we might also for diminishing air pollution), we can compare two numbers. We can ask the extra cost and the extra benefit for every life saved. And, when cost exceeds benefit, our life-saving initiative stops.

Sweden disagrees.

My sources and more: In WSJ, in Quartz, and at City Lab,  Sweden was the perfect traffic safety starting point. A much more recent WEF discussion confirms what those 2014 articles say.

Our featured image is a roundabout visualization of a Texas I-35 improvement plan.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - Elon Musk’s Tunnel Vision by Elaine Schwartz

It appears that Elon Musk’s year-old Boring Company has tunnel vision. The firm has proposed a high-tech tunnel between NYC and Washington D.C. that got a verbal okay from the White House:



Where are we going? To new tunnels and the old Erie Canal.

Boring Business

Meanwhile Maryland gave Boring the go ahead for a 10.1 mile tunnel under a section of the Baltimore-Washington Parkway. Also, Chicago is considering Boring for a speedy connection between its downtown and O’Hare International airport. And, close to SpaceX (near Los Angeles), construction has begun on a 2-mile long underground tunnel that Musk hopes he can extend another 15 miles.

Below, Elon Musk described a bit of what he would fund, build and operate for Chicago:



Musk’s current projects are not quite what he ultimately seems to have in mind. His LA project is drive on/drive off with cars and passengers carried along by an electric “skate” moving on magnetic rails. Ultimately though, the Musk vision is tubes in which capsules move as fast as 750 mph along a cushion of air.

I believe that this is the “skate” concept planned for the LA tunnel:

Here is a Hyperloop rendering:

People with tunnel knowhow wonder if any of this can work. After all, the 35-mile Gotthard Base Tunnel took 17 years and $7 billion to slice through the Swiss Alps. There also is London’s recently completed $19.4 billion, 26-mile underground rail connection to Heathrow. A 9-year project, it won’t be entirely operative until 2019.

But they thought the Erie Canal was impossible too.

Our Bottom Line: Transportation Infrastructure

His last name was Clinton, he wanted to be president, and he became known for “Clinton’s Folly.” This Clinton lost the presidency in 1812 (James Madison won), and later in his political career, as governor of New York, he wanted to dig a 363-mile canal. Because no canal in the nation was longer than 2 miles, people ridiculed the proposal.

DeWitt Clinton proved them all wrong. Between 1817 and 1825, using (what was then) revolutionary technology, the Erie Canal was dug. Its impact was immense. By connecting Albany to Buffalo, New York, the canal completed an all-water route between the port of New York and the Great Lakes, thereby permitting eastern manufacturers to trade with western suppliers of raw materials. Instead of traveling via slow and expensive overland routes, goods could move across the Erie Canal more cheaply and quickly.

Like DeWitt Clinton, Elon Musk says his Boring Company can inspire and enable our transportation infrastructure to take a leap forward.

Maybe Musk is on the right track.

My sources and more: Having discovered the Boring Company in Gizmodo, it was impossible to stop reading. From there, Quartz is perfect as a second stop and after that, the possibilities include Bloomberg, Mashable, Curbed. Then finally, I felt obligated to convey CNN's concerns.

Our Bottom Line includes an excerpt from the revised edition of The Foundation Econ 101 1/2 Part 2.

Ideal for the classroom, econlife.com reflects Elaine Schwartz's work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.