“Are We Europe?” Watch

April 26, 2009

Sure, I’m not happy that the US government is getting larger and becoming more closely involved in the economy, but when I read something like this, it puts things in perspective. The lede:

European Union lawmakers voted Wednesday to slash the cost of texting and surfing the Internet on cell phones abroad.

Thankfully, we’re not there yet.


2 Responses to ““Are We Europe?” Watch”

  1. Rrrobert! Says:

    Is the public resource of bandwidth somehow philosophically immune to regulation, including usage tax? I didn’t read that as actual price regulation, since they call it a tariff.

  2. The terminology is confusing if you’ve never gotten your phone service in Austria, but I’m 90% sure that by tariff they mean “rate schedule”. It’s possibly a translation from German or just obscure English usage, but I think it’s clear from context that they are talking about price controls.

    To your point about natural monopolies, the argument against government regulation is less philosophical than you might think. To be honest, I haven’t spent enough time looking into this issue to say anything authoritative on the subject, but my general impression (which, surprise, fits in pretty well with what I already believed) from listening to this lecture and glancing at stuff like this (PDF), is that regulations on industries that are so-called “natural monopolies” end up being a lot like regulations on non-natural monopolies, i.e. they serve to strengthen existing corporations, entrenching their position by raising barriers to entry.

    I’m on a lot firmer ground when I say that price controls, in general, are not a good thing. That position is almost universally accepted among economists (and that’s how you determine truth in economics, by taking a vote).

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