[PEN-L:1518] Re: In Defence of Humanism

Rob Schaap rws at comserver.canberra.edu.au
Tue Dec 15 20:42:07 PST 1998

G'day Enzo,

You ask:

>Are you suggesting that the market of telecommunications has traditionally
>been a free one?!?

Nope. No market has. Economic transactions ever occur within the field of political power. One can't really speak of 'distortions' of prices, as this is to imply markets could conceivably do their thing in isolation. They can't.

This is extra obvious in the case of large privatisations of established public monopolies, as the government is torn between ensuring the new shareholders get good returns and minimal regulatory risk (for PR/political reasons) and allowing competitors a real chance to move in. The monopoly exacerbates these problems by preparing as well as it can for competition by putting in place as much infrastructure as it can to give it the inside running in the foreseeable future. The inevitable regulation and litigation problems then cost a fortune in time and money.

All of which is generally not admitted whilst the powers-that-be give credit to very skewed competition for (equally skewed) price cuts actually brought about by technological developments, some of which were already much in place before privatisation, and the rest of which would have got there (on all the historical evidence) whether the entity was privatised or not.

I guess that's what I'm suggesting.

Cheers, Rob.

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