Monday, 9 May 2011

DOWN TO THE DOCTOR’S: Price-fixing, flag burning and Jinty McTavish’s emotional incontinence

_McGRath Libertarianz leader Dr Richard McGrath offers inoculation against the nonsense appearing in recent stories and headlines.

This week: Price-fixing, flag burning and Jinty McTavish’s emotional incontinence

  • DOMPOST: “Cost of calls and texts to drop – The Anti-Commerce Commission dictates what competing telecommunication companies can charge others for use of their network, hoping this will reduce mobile “termination” charges…

THE PROBLEM: The government wants to make mobile phone calls cheaper. That’s fine.
    But it’s not their job to encourage people to use cell phones. Their job is to protect our individual rights. This price-fixing decree violates individual rights by interfering in the free commerce between privately owned companies, who should be able to charge each other what they damn well like.
    You can bet if the telco companies colluded and undercharged mobile termination rates, there would be allegations of a conspiracy to make people dependent on mobile phones and then raise user charges once the poor helpless public are ‘hooked.’
    This price fixing move by the Anti-Commerce Commission could make it cheaper for kids to text each other in class, thus increasing the likelihood that it will happen. With state school classes already disrupted by the kids who don’t want to be there but who are held captive by leaving age laws, does the government want it even more likely that kids will be distracted via cheap texting?
    Anyway, there is no guarantee that the telcos will lower their mobile termination charges despite the price-fixing by that has been forced on them. Nor that they will continue ot offer the same services at these compulsorily-lowered prices…

THE SOLUTION: Leave the telco market open to all comers. Make it easier to set up a competing mobile phone company.Accept that Telecom may have an advantage in owning a lot of the network infrastructure (granted, I would be the first to admit I don’t know much about who owns how much of ‘the network’) but leave the market to sort itself out.
    Competition and the prospect of profit breeds innovation. It is likely that a future competitor in the mobile phone market will come up with technology that makes the current mobile network obsolete, and sends prices through the floor, just as the price of wide screen TVs has plummeted in recent years.
    For the sake of free trade, disband the Anti-Commerce Commission.

  • OTAGO DAILY TIMES: “Temperatures rise as climate discussed – Dunedin City Councillor Jinty McTavish effectively tells Dr Jock Allison, former director of the Invermay Research Centre and global warming heretic, to STFU and accept the opposite view simply because a majority of the scientific community apparently believe it at this point…

THE PROBLEM: Local government should not concern itself over matters over which they, and their ratepayers, have no control. The global cooling of the past 12 years is unrelated to the production of CO2 and other ‘greenhouse’ gases by the people of Dunedin City. Correlation is not the same as causation.
    Just because a majority hold some opinion to be true does not make it so. Scientific proof makes it so. And the hypothesis of AGW is just that—a hypothesis; it is not a theorem or a law.
    Councillor Jinty McTavish should stop turning on the water works when she discusses the weather—using emotion devoid of reason in trying to make a point threatens to make her a laughing stock. Or more of one.
    Carbon taxes, emissions tax scams, whatever you call them, are all a disincentive for industry to produce, a disincentive for people to use energy to improve their standard of living, and a scam to enrich Albert Gore and other parasites who have never done an honest day’s work in their lives, but who want to punish producers for producing.

THE SOLUTION: Let people devise their own solutions to global warming, if they see it as a problem. Some people enjoy hotter weather; let them. Many farmers could make use of rising CO2 levels and higher temperatures. Let them.
    Don’t use the weather as a basis for taxing people. To paraphrase my predecessor as Libz leader, socialism doesn’t work, no matter what the temperature. It didn’t work in Siberia, it wouldn’t work in Libya, it will not work here.
    Encourage (by getting out of the way) the production of more near-zero-emission hydro-electric dams and nuclear power stations instead of hideously expensive, temperamental and deadly wind turbines and even more deadly solar panels.
    Allow private hydro dams and small scale nuclear energy production.
    High electricity prices will encourage energy conservation. Laws don’t need to be passed to fix prices, nor to subsidise lethal installation of home insulation.

IN SHORT: Let consumers sort out their own response to the “horror” of changing weather patterns. The government has bigger fish to fry, like reversing the unsustainable borrowing and spending that is infinitely more of a threat to future generations of New Zealanders than a few tenths of a degree of global cooling ever could.

THE PROBLEM: Some people still think flag burning should be outlawed. But this attitude is at odds with the liberal Western (particularly British) view that people should be able to express their opinions by whatever their means, while respecting the property rights of others.
    Burning a flag in a public place is fine, as long as the owner of the flag gives his/her permission. An individual has no property rights over the land in a public place and so has no basis to object to someone burning a flag there.

THE SOLUTION: If you are offended by someone burning a flag, then don’t look. Ignore them, as publicity only fans the flames of their activism. Wave your flag instead.
    There is nothing sacred about a flag. Nor a Bible. Nor a copy of the Quran. Burn the lot of them, I say, especially if you’re cold and there is a power cut.
    The McCullyist view that freedom of speech is all right as long as it doesn’t offend others is simply BS. It’s precisely speech that does offend that needs freedom’s protection.
    The test of whether someone’s flag-immolation crosses the line is whether objective (measurable) harm has been done as a result. If so, compensation is in order. If not, the offended party should exercise their own freedom of expression to protest, remembering that their own freedom ends where the property of others begins.

"The [American] First Amendment exists to insure that freedom of speech
and expression applies not just to that with which we agree or disagree,
but also that which we find outrageous. I would not amend that great
shield of democracy to hammer a few miscreants. The flag will still be
flying proudly long after they have slunk away."
- Colin Powell, U.S. Army General


  1. There are two nationwide mobile phone networks, there could be more if it were not for the RMA, Kedgley style scaremongering and legislation forcing Telecom and Vodafone to offer access to their networks for anyone building a network with 5% coverage.

  2. @libertyscott

    That's not true, with economies of scale and our sparse population, there may only be naturally 2 or 3 networks. the q is whether this can offer a competitive outcome for consumers? with cournot competition and barriers to entry firms earn supernormal profits. therefore we reduce those barriers to entry by forcing network owners to share their asset at cost plus a margin.

    2nd, regarding termination rates, because the receiver decides the network, but the caller pays the cost of the call, there is no incentive for the reciever to switch networks to reduce the callers costs. The network can charge monopoly prices because the caller has no say over who delivers that call to the other person. alternatively if the receiver paid the cost of receiving a call, where they can choose the network, there are other distortions in the opposite direction because of uncertainty about whether or not it will be an important call to answer, worthwhile of paying for it. therefore you end up with plans that are at marginal cost, but with significantly more minutes than a fully informed consumer would purchase. Either way there is justification to regulate termination rates, no matter the number of networks.

  3. there is a coordination and free-rider problem to letting those who consider GHG emissions solve the problem on their own. that is, even if I accept anthropogenic climate change, i can free-ride on other's effors to reduce it. If I don't accept it, I might be wrong but I am not going to suffer the consequences. therefore there is a reason for the government to consider the probability that it is a problem. after considering the probabilities of climate change and policy effectiveness, discounting for time value and risk aversion, the government should intervene.

  4. Richard McGrath12 May 2011, 08:17:00


    I don't follow your reasoning re GHGs. The free-rider issue is not a problem in a free market, it's accepted and assumed and allowances are made for it. If I free ride on the efforts of others, how does that affect you, and why should the government intervene? Don't forget AGW is an hypothesis as yet unproven. Should the government intervene because I have a hypothesis that all New Zealanders would benefit from eating a Double Down KFC burger three times a day?


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