Wednesday, April 20, 2011

DOWN TO THE DOCTOR’S: Tall-poppy Telecom slashed by government weed-eater

_McGRathLibertarianz leader Dr Richard McGrath invites you down to his clinic for an inoculation against this week’s stories and headlines on issues affecting our freedom.
This week: The ongoing public dismembering of what was once NZ’s largest company.

THE DOCTOR SAYS: In other words, Telecom is whacked wit the largest fine in NZ history for acting in commercial self-defence—breaching an act that is commercially, and morally, corrupt.
    At least the Herald reported correctly that Telecom had a “dominant market position” rather than the often misused term “monopoly” - the latter situation applies only where a government uses its coercive power to protect a business from competition.
     However the High Court has, in my humble opinion as a Telecom customer, got this one wrong. Drastically, savagely and unjustifiably wrong.
    After being forced to give competitors access to its network—in effect being punished for the size of its assets—Telecom acted to protect its market share by charging its rivals an appropriately high fee for the use of its facilities.
    The High Court however, steped in abject ignorance about even basic economics, ruled that Telecom had charged “disproportionately” high prices—ignorant of the lesson demonstrated by central planners over centuries that the “right price” is nothing more than the price people are willing to pay. In this case, Telecom’s competitors paid the high fees, preferring to do so rather than not make use of its network system. In any case, because of government interference in the telecommunications sector and a mission from Minister Cunliffe on to dismember NZ’s biggest company, Telecom has always been on a hiding to nothing.
    So if ever you find yourself about to flatulently opine that businesses run governments, just think of the case of Telecom—where at present the score is around 15-o in the government’s favour.

_Quote We assemble parliaments and councils, to have the benefit of their collected wisdom; but we necessarily have, at the same time, the inconvenience of their collected assions, prejudices, and private interests.  By the help of these, artful men overpower their wisdom, and dupe its possessors; and if we may judge by the acts, arrets, and edicts, all the world over, for regulating commerce, an assembly of great men is the greatest fool upon earth.
- Benjamin Franklin

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11 Comments:

Anonymous Anonymous said...

Hank Rearden would have told the moochers to get stuffed.

4/20/2011 12:03:00 pm  
Anonymous Jol Thang said...

Hank Reardon is a ludicrous fictional character, dreamers. And "moochers"? Jesus.

4/20/2011 06:26:00 pm  
Blogger libertyscott said...

It is worth noting that since Labour started meddling the share price of Telecom has dropped around two-thirds. Part of that is the softening of the 90s tech bubble but much more is due to constant regulatory meddling.

4/20/2011 07:54:00 pm  
Blogger James said...

Hank Reardon has more substance that you do My Thang....at least he recognises A=A and the law of cause and effect...you just talk shit.

4/20/2011 08:10:00 pm  
Anonymous Anonymous said...

Reardon might be fictional but the story is happening.
There is no difference between The moochers using the state to get Reardon steel. Or the moochers getting the state to force Telecom to give up its private property.

4/20/2011 08:15:00 pm  
Anonymous Kurt said...

Again, Mrs Jol Thang from the Womens' Affairs Department is doing her usual routine here in taking snide at others and not contributing something to the discussion.

4/20/2011 10:59:00 pm  
Anonymous Anonymous said...

Thang,

Are you able to explain your position?

Words like "ludicrous" and "dreamers" sort of beg that you should - don't you think?

What is it exactly that recipients should be entitled to and why?

KSKiwi.

4/21/2011 04:04:00 am  
Anonymous Sean Fitzpatrick said...

@KSKiwi

you are wasting your time requesting a reasoned response from that one. Has no interest in anything except making a snide comment then running.

4/21/2011 08:25:00 am  
Anonymous Dirty Mind said...

Sean, I would give Mrs Jol Thang a good root if that stops her for making a snide.

4/21/2011 11:24:00 am  
Blogger Geoff said...

I'm not a Telecom customer but I couldn't agree with you more, Richard. The then NZ government sold Telecom when it was completely dominant in its market.... and subsequent governments have done everything it their power to destroy the value in the property that they sold! Bastards.

4/21/2011 11:29:00 am  
Anonymous Sean Fitzpatrick said...

@Dirty Mind.

Myself I take my mother's advice and not touch something when I don't know where it has been

4/21/2011 01:08:00 pm  

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