Statism resounds in the last two paragraphs of this article (NO subscription required) in this week’s Economist. The interesting story is a particularly stark example of how the use of cell phones can and does promote economic wellbeing, this in the Indian state of Kerala.
But at the end of the short article, the writer (and/or the author of the paper it reports) marvels as though it were an exception to some rule that this material advancement comes about without subsidies, taxes, laws, regulations (well, it says SOME regulation is required) and such to promote it or even make it possible. This growth, through some sort of aberration, came about through people’s VOLUNTARY actions!
And here, until this periodical with the rather presumptuous name set me straight, I had been thinking, like that Austrian Ludwig Whatshisname, that generalized economic progress NEVER comes about through government actions – indeed, that government is at bottom purely consumptive and destructive and that its activities invariably RETARD economic progress.
Read and be enlightened.
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The reporting on how cell phones have revolutionized people’s lives was indeed inspiring. The analysis was a bit more depressing.
Agreed the “Economist” is a very poor magazine (sorry “newspaper”).
I claims to be in favour of “market economics”, but tends to support ever more taxpayer money for the “public services”, and to support such absurd and counter productive ideas as “anti trust” and general government “competition policy”.
“All of this, says Mr Jensen, shows the importance of the free flow of information to ensure that markets work efficiently. >>Information makes markets work, and markets improve welfare<< he concludes.”
Markets improve welfare? Did The Economist just say, that markets improve welfare? We are still talking about free markets, right?
“All governments have to do is issue licences to operators, establish a clear and transparent regulatory framework and then wait for the phones to work their economic magic.”
Oh well. Close enough to get me fooled, though.
I would say that, in general, communications and information-sharing systems of any kind make for more efficient markets (although pure efficiency is impossible).
Starting at the bottom, a common language, the use of a lingua franca, helps information sharing in markets. This could be English in today’s global market, Latin throughout history, German for certain scientific and political issues, French during the enlightenment, etc.
I think that stock markets are a good example. Today’s online trading systems are far more capable of pairing the right seller and the right buyer than the old system of traders screaming at each other in a pit with pieces of paper.
Smart phones (and related gadgets), IMHO, will revolutionize commerce. They are already some hand-held devices that serve as a Google Maps Mobile (GMM) on steroids, alerting the user to the nearest cafe, with businesses inputting data about current sales and specials going on. How much time is currently wasted by people who are on the road and desire a certain service, such as a nice Italian Restaurant. Google Maps is an excellent tool while you’re at home, but think of the real-time advertising that can be done. Buyers and sellers can instantly link up and complete a transaction.
In South Korea, millions watch TV on broadband phones, and Seoul subway riders have been paying tolls with their mobile phones for 5 years now. The US is a bit behind in the mobile transaction and communications market, partly due to government bandwidth regulation (analog TV currently occupies the best bandwidth for mobile broadband, for example), partly due to our more spread-out population. The roll-out of WiMAX within the next 18 – 24 months will change all that, however.
“All governments have to do is issue licences to operators, establish a clear and transparent regulatory framework and then wait for the phones to work their economic magic.”
That line got me too… as is evident in Iraq (before the US installed its favored cellphone monopolies), governments don’t even have to do that.
The myth of the market as government creation persists.
Of course “licences” and “regulatory frameworks” cause vast harm.
Even Hayek was supprised at how much harm that “licenseing” does (I remember him mentioning his shock in a comment in the “Constitution of Liberty”, but my copy does not have any mention of licenses or licensing in the table of contents or the index), but that was in 1960 – there is no excuse for someone to still write as if licenses were a good thing now.
As for writing that soemthing as vague and arbitrary (“clear and transparent” my boot) as a “regulatory framework” is a good thing well……..
The “Economist” people are very low quality indeed.
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