Monday, January 02, 2006

Economics 203: Crassness as a market force (elective).

Are cellphones edible?

Happy 2006. Now with that out of the way, let me turn my attention to a shocking article in the most recent edition of The Economist.

I enjoy getting The Economist: the reporting and writing are good and the magazine reiterates its particular liberal market economy philosophy often so that I'm not second guessing the editorial spin at every turn or simply reading things I mindlessly agree with. However, I fear that one story in the 12/24 to 1/6 edition takes zeal for the market into the realm of the barking ideologue.

In a report on the booming mobile phone sector in Somalia since the collapse of any form of civil society in 1991, the reporter writes:

"No government means no state telecoms to worry about... Taxes, payable to a tentative local authority or strongman are seldom more than 5%... There is no need to pay for licenses, or to pay to put up masts. It is a vivid illustration of the way in which governments, for all their lip service to extending communications, can often be more of a hinderance than a help."

I see. So the price of a fully deregulated cellular communications industry in Somalia is a complete absence of any from of government besides the capricious whims of warlords and militias? I wonder which the Somalis themselves would prefer: cheap phones or a functioning civil society? Incredible.

The article goes on to note that "Pricing is especially important in Somalia...because many potential customers are illiterate and so immune to advertising." Not much of a market for SMS text messaging then, I imagine.

I had to check the date on the cover because the whole piece had the air of a bad taste April Fools joke. The letters page in the next edition is going to be a doozy.


Joe said...

Sounds like the editors of The Economist attended a non-partisan Holiday pot luck and hit the Libertarian Punch a little too hard.

weasel said...

I wish there was a way of bouncing this off the skulls of all those "No Gov'mint" idiots out there like that bloke who dwadles around AirBlog. Perhaps a cultural exchange and fellowship program to Mogadishu to study the impacts of complete deregulation can be set up for the "cold dead fingers" and "its my money" brigades?

Then again, they could just visit New Hampshire; its more or less the same.