On Tue, 11 Aug 1998 dontspam-tzeruch@ceddec.com wrote:
On Sun, 9 Aug 1998, Rabid Wombat wrote:
This is how it works in a free-market economy (doh!).
One of the self-appointed/assumed functions of gubbmint is to "fix" this, by granting some organization a monopoly in return for bearing the costs of creating infrastructure, as well as spreading the cost of servicing a (smaller) number of remote customers across a (larger) number of non-remote customers.
Whether this is a good thing(tm) or a bad thing(tm) depends, as usual, on which side of the subsidy you are on.
No, it can still be a bad thing even if I am the beneficiary. The question is whether or not it maximizes efficiency. A stock market crash will benefit the short sellers and owners of puts. But it will also cause a depression, which will still affect the short sellers.
Yes, it can be a bad thing no matter which side you are on. Many subsidies are merely re-allocation of wealth, often from the rich to the poor. OTOH, some services, although not essential, are important enough to warrant a limited, regulated monopoly until sufficent scale has been reached to allow a competetive marketplace to be successful.
There is a cross-subsidy. The monopoly then pays the government to maintain the monopoly indefinately using government force to drive out competition. Being able to legally imprison or shoot competitors is an advantage that is hard to overcome.
Every organism seeks to propogate. It is the responsibility of the people to kill the monopoly when it has outlived its usefulness.
Alaska tends to be cold. Should heat and other forms of energy be subsidized, and roads built to wherever I want to place my cabin? Arizona is dry - should they get subsidized water?
They do. What's your point? That this is unfair? Of course it is. Life is unfair. Some of these unfair subsidies by not be equitable in the short run, but in the long run, everybody comes out ahead. Others simply re-distribute wealth, to no long-term socialo benefit whatsoever. The difference between the two comes down to managing resources. Some enterprises have traditionally been beyond the scale of the private sector, although that is really no longer the case. The US flourished due to the success of the railroad building in the late 1800's, and this success would not have been possible without a great deal of public assistance. True, the rich got richer, but in the long run, a more competitive marketplace evolved. The common person was, as a result, better off (at least from an economic perspective). Eventually, the highway systems were government-subsidized, and the railroads were not. This helped GM and its shareholders to get rich, provided a lot of post-WWII manufacturing jobs, and created huge traffic problems and suburban sprawl. See post-WWII Los Angles as a reference.
Why is distance different than any other factor. If I want to live in a remote area, I should bear the costs of the remoteness, just as if I want to live near a river, I will have to bear the costs of flood control or damage from uncontrolled floods. I don't have to live in a mountain cabin, but if I do there will be costs.
The government provides flood insurance for those who continue to build in flood plains, and those of us who live on high ground continue to subsidize this. I live on high ground, and peronally feel that providing flood insurance to an area that washes out every 5-10 years is stupid. OTOH, it might be useful to provide such insurance for areas that only wash out every 40-50 years. Where do you draw the line? BTW- The government funds "water-control" projects as well, subsidizing the delivery of water to rural areas. Distance is just another cost factor, one that happens to be pertinent to the process of delivering packages.
The largest delay for consumer wireless has been government regulation itself - not allowing efficient use of bandwidth. (I think the first cell phone was 1979). And there was a CB craze, although it had limited range. The big wait was for the FCC to catch up with technology (or for congress to allow them to do so).
This was only partially due to frequency regulation. Miniturization has had a lot to do with the recent growth in wireless as well. Back when cellular phones were the size of a small purse, they were slow to catch on; people who spent a good deal of time in their cars, or those whose employers subsidised status symbols had car phones, but growth was still fairly slow. Once the hand-helds appeared, growth accelerated. There had to be enough consumers to support the cost of adding infrastructure, and there had to be enough infrastructure to support the consumer; some industries can pull this off without outside help, and some cannot. BTW - Australian cattle stations used radios as their primary link to the outside world for quite a while, due to their rural location; the same held true for many other "remote" corners of the globe. Not a very scalable solution, though. Try using a CB in a built-up area. Then imagine everyone getting home on Thursday after a long day at work, and trying to order pizza delivery at the same time on a CB in that same area.
Before you argue "the best government is no government", visit a few third-world capitols, and note how you move from a modern capitol city to flintstones-like living in about 50km.
Many third world governments are thoroughly corrupt. Across the border in Mexico they have "Government" - are you saying that Mexico City is better than Wyoming? And the small villages have government even if they don't have technology.
My point is that many areas of the world have not invested in deploying technology very far beynd the boundaries of a few "modern" cities. Without getting into an even longer rant here, the end result is to perpetuate the cycle of rural poverty (look into some of the studies of third-world economic development - distribution of technology and services is often cited as a critical success factor). Those who do escape to the city and manage to attain a higher socio-economic status remain there. The bulk of those born to poverty have no hope of climbing out of it. In many countries, (including Mexico, since you mentioned it), delivering telephone service to rural areas without wireless technology was not even possible; the locals pull down the telephone (and power) wires to steal the copper for re-sale. Basically, some groups just haven't managed to pull off effective self-government; in the long run, you get the form of government you deserve. If you are too damn self-interested to see anything in terms of the common good, you'll probably end up with a self-interested government. Call it corrupt if you wish to, for it is, but don't confuse cause and effect.
A $.32 price on first-class mail to anywhere in the country is a good deal for all. OTOH, package delivery has become sufficiently competitive, and probably needs to be revamped.
Generally wealthier people can afford to live in the remote areas, and can afford alternatives to first class mail. Poor people rely on first class mail within cities to do much of their business, and that is mainly local. So you have another case of the poor subsidizing the rich.
I'm not sure where you've been, but not everybody who lives in a rural area is wealthy; this only occurs in places where space is at a premium, and only the wealthy can afford to purchase space. There are plenty of rural people who are dependant on first class postage to pay their bills, and they can't simply walk over to the corner grocer/food stamp launderer/check cashing/utlity bill collector to take care of business the way they can down on da block.
Just my $.02.
No, your $0.32, soon to be more.
At twice that, it is still a bargain, when you consider what you're getting for your money. Actually, a good portion of the costs of first class delivery are subsidized by commercial bulk mailers, who are in turn supported by those who purchase goods and services found in direct mail advertisements. I suppose that you could even draw the conclusion that if one can afford to purchase goods, one is better off that one who cannot, and therefore the "haves", by subsidizing bulk mail, are bearing a share of the cost of first class delivery used by the "have nots." Of course, we could argue economics for months - if you don't like the results, just change the assumptions. -r.w.