Thursday, July 03, 2008

History of Monopoly

iPhone lust seems to be one of those get it/don't get it things. Since I don't, I'm not instinctively sympathetic to those who are complaining that Rogers is going to charge too much to the trend-seekers and coolhunters who just have to have one. They sound like the same people who think they are entitled to other people's copyrights without paying for the value they receive. If they must have all that bandwidth, fine, but why should the rest of us pay for it?

But I've been browsing in a most goddamn wonderful book (I'm told that's what Hemingway said of Joyce's Ulysses), Robert Caro's Master of the Senate. It's a study of one small part of Lyndon B. Johnson's life that is (against all my expectations going in) among the best books on politics and history I know; very readable too.

In Johnson's early career, he crusaded against private power monopolies that priced electrical power at such high prices that hardly anyone in Johnson's rural Texas could afford electricity. When legislative action obliged the power companies to provide electricity at regulated (and low) prices, so many people subscribed that not only was there a tremendous burst in productivity and economic development, to say nothing of quality of life, but power delivery actually became more profitable than in the old high-price low-volume days of unregulated monopoly. Hello Rogers Telecom?

Remember how deregulating telephone service was supposed to make telephone service cheaper and more efficient through competition? Are you paying less for your telephone services than you were twenty years before? Neither am I. The fact is, telephone service is a natural monopoly, and it would benefit from more regulation, not less.

I don't really believe the iPhone is the 21st century equivalent of rural electrification. But abusive monopolies and the need for public regulation -- that doesn't change so much.

(Johnson soon learned there was more money and more power to be found on the side of the big guys. By the time he was in the Senate, he was undermining the regulations he had helped create, and being handsomely rewarded by Texas oil barons as a result. But that's another story -- happily, it's one that is well set out in Caro's book.)
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