Liberty and Privilege with a Side of Economics

Some point to government regulation as protecting the masses from conniving corporations who want nothing more than to defraud helpless consumers.  Consider a contrary opinion from the folks at the Cato Institute:

In fact, Pew’s comparable smart-phone ownership figure for whites is 53%, but the difference is not statistically significant. With regard to income, Pew finds a 9 point difference in smartphone ownership between those making < $30,000 and those making between $30,000 and $49,999. Most of that difference seems to be accounted for by age, however. Among 18-24 year olds, 77% of those making < $30,000 own a smartphone vs. 81% for those making $30,000 to $74,999.So pretty much everyone who wants one now has a cell phone which is rather more functional than the old hand cranked variety, and the majority of young people, at all income levels, even have smartphones. That’s a relatively high level of equity, coupled with excellence. Brought to you, again, by a competitive industry. Could the federal government’s Lifeline a.k.a., “ObamaPhone” phone subsidy programs be helping out? Certainly, to some extent. Though it’s far from true that every low-income American’s cell phone is paid for by Uncle Sam.

via Equity vs. Excellence. Or…A Crank Phone in Every Home! | Cato @ Liberty.

Remember it’s not in the best interest of a corporation to rip people off.  Certainly it’s going to happen, and we don’t need regulation to punish people for fraud.  It’s illegal whether the industry is regulated or not.  But for a corporation to thrive in the long term they have to produce something the masses want.  Imagine if the iPhone suddenly rebooted (whether you’re in the middle of a call or not) every 47 1/2 hours without warning.  Could users adjust?  Certainly.  Would they be standing in line when the next iPhone comes out, though?  Would they continue, once the tech websites all gave it horrible reviews, to shell out $500 (or $300 with a 2 year contract) for it?  Nope.  Surely a few people might get duped, but Apple stock would crash faster than Superman trying to turn back time to save Lois Lane and the product would get pulled before they lost what was left of their reputation.  No regulation is necessary:  the market will fix it.

I’m old enough to remember when telecommunications was more heavily regulated.  Small towns still had party lines.  Most phones were wired to the wall and came in one color and were owned by Ma Bell.  Deregulation of telecom has brought us to the point where half of all young people don’t have a land line, not because it’s too expensive, but because cell phones (mobile technology) are cheap enough for anyone to afford.  It’s not that long ago that only rich folks had mobile phones.

Read the article and consider what regulation is actually in the best interest of the masses.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s