Finally, a question for my username!

The history of stamp collecting, or philately, is the story of supply and demand. It begins with demand, from people for whom a postage stamp was a symbol of global communication. But that demand shaped changes to supply, as the nations of the world produced new kinds of stamps to appeal to consumers: more beautiful stamps, more unique stamps, but in the end, far too many stamps.

While premodern letters were sometimes postmarked with rubber stamps, such as the Scottish Bishop marks of 1693 to 1806, these were not very collectible as they were just a rubber stamp inseparable from the letter. Adhesive postage stamps, invented in 1840, provided a number of appealing components. They had no reuse value, making the hobby pure. They were easily separable from letters, so the small stamp could be collected and the bulky letter could be preserved by its recipient, reused, or discarded. They provided a visual representation of the country from which they were issued: the first stamp, the Penny Black, was a profile of Queen Victoria. And they had interesting individual features: the Penny Black had randomized letters in each corner for anti-counterfeiting purposes.

Almost immediately after adhesive postal stamps became widespread, people began collecting them for these purposes. Collecting stamps from within your own country was sometimes a matter of finding small differences between individual stamps in order to categorize or rate them, and some people enjoyed doing this—this gives rise to the stereotype of the stamp collector as someone hung up on irrelevant differences in minor historical objects. Collecting internationally must have been an extremely interesting endeavor in the 19th century, when there was no Internet and few visibly foreign documents circulating. Even if the designs were not yet very developed, a stamp collection could become a little museum of the world, little objects that had floated into one’s country from neighboring countries or exotic realms. To obtain rare stamps, collectors would form networks, either making friends with other collectors nearby, or exchanging mail with distant collectors—naturally, on such mail, the envelope would be even more exciting than the letter within. Philatelic societies allowed you to get the addresses of other collectors easily. If you lived in Hong Kong and let a philatelic society know that you were open for exchanges, you could expect a flood of letters from world collectors requesting stamps.

Stamp collecting grew along with increasingly well-designed postal systems and cheaper paper production. More people were writing mail to each other, domestically and internationally, and more states started issuing stamps. By the end of the 19th century many states were designing stamps with collectors in mind, and some state-like entities were even issuing stamps specifically for collectors. For example, British North Borneo started issuing stamps in 1883. They have beautiful designs for the period, with an unusual border written in Chinese and Malay, and became desirable enough that the rare ones still fetch thousands of dollars, even in today's depressed market. Less exciting are the British treaty ports in mainland China. These ports could have purchased and used British stamps, but the promise of the philatelic market was too enticing and they made their own designs to sell to collectors, some of them not very nice. Most of the Indian Princely States also produced stamps, which are today collectively called “the Uglies”, giving you a hint of the quality and delicacy of the designs involved. But collectors rushed in to obtain all of these and complete their world tours.

Meanwhile, as the postal system grew more complex, the types of things to collect proliferated. From the 1850s, many postal services included the locations of post offices in their postmarks, and some people wanted to collect rare locations. By the 1890s, stamps and envelopes were loaded with all sorts of data. For instance, large businesses with multiple locations would hand out whole sheets of stamps to their offices, but they did not want employees taking stamps home for personal use. So they punched tiny holes in each stamp, which collectors call “perfins." Some of the most historically valuable information I’ve gotten from philately is a guy who documented all the companies who punched perfins in Ottoman Empire stamps — practically a catalog of large European businesses with heavy interest in the Middle East and North Africa. This is just a taste: by the end of the 19th century mail was everywhere, and there were letters sent from onboard ships, letters carried in hot air balloons, letters carried on airplanes, and in one case, letters ferried to a remote island in tin cans. Every continent, including Antarctica, produced mail. In 1975, mail went to the Moon on Apollo 15 (the moon mail sells for about $50k per letter).

The decades around 1900 were the economic peak of philately and this was when the British Guiana stamps were identified, specifically by collectors on the lookout for extremely rare issues. Demand for these rare issues was massive because some people wanted to collect examples of every stamp ever issued by every country in the world. The most famous and rarest American stamp, an error called the Inverted Jenny, also originates from a single sheet spotted at a post office by a collector, who had specifically been searching for an invert and must have thought himself the luckiest man in the world at that moment.

After about 1960, color printing became very cheap, and at around this time nations began issuing stamps for the philatelic market in such quantities that there was not enough demand from collectors. This trend intensified over the next few decades, overwhelming the hobby. Millennials may remember how in the 1990s, newspapers often carried advertisements for would-be stamps from African or Caribbean nations, never used for mail, only to appeal to collectors with the false promise of long term value. These non-postal stamps are not widely issued anymore because so much demand has evaporated. The common refrain in /r/askstampcollectors is that if you do not want to keep your grandpa's philatelic collection of American stamps made after 1960, it makes much more sense to use them as postage than to try to resell them. Indeed, on eBay you can buy big sheets of old American stamps for below market value, and some eBay sellers cover their merchandise in old stamps instead of taking their package to the post office.

There are still reasons to collect new stamps: you can get special postmarks on your envelopes to commemorate the launch of new stamps, and I am planning to create such envelopes for the James Webb Space Telescope stamps that will be released this September. But by the time mail was replaced with email in the late 1990s, philately was already becoming a stagnant hobby. There are still people who separate new stamps from envelopes, even in this age of self-adhesive stickers, but after the 1990s philatelists have often preferred to collect stamps from before roughly 1960, so philately became no longer about participating in an exciting global network of friends happily postmarking new stamps for each other, but was more like a subcategory of collecting historical curios.

As old collectors died and their collections were sold at auction, with demand lessening all the time, these historical stamps also became cheaper. These days a full collection of every well-circulated stamp issued in the world up through 1960 is probably about $10,000 or less, and collecting rare stamps is now a simple matter of searching eBay or special online stamp markets, rather than swapping addresses with people or hosting local meetings. However, philatelic societies continue to this day both at the local and global levels, often to document and share unusual aspects of postal history.