Go on, break the law!

• This column was first published in ITWeb Brainstorm, 1 March 2007. They pay me, so please subscribe to the print edition.

The more Alec Erwin intrudes on the communications minister’s portfolio, the more absurd the comedy show gets.

Ivy Matsepe-Casaburri and Alec Erwin, telecommunications ministers one and two (as the DA’s Dene Smuts calls them according to the Financial Mail), could use a few civics lessons.

Last time I checked, private citizens of a country were required to obey the law – even if they don’t know what the law is. It follows, therefore, that Erwin risks unwittingly committing any number of crimes, since he doesn’t seem to know what law Matsepe-Casaburri’s department wrote and got parliament to pass.

Witness what he said in February, according to a quote in Business Day: “If the private sector was so keen on infrastructure, they would have done it.”

Right. Even though the private sector has to wait for an invitation from the other minister to apply for a licence, in order to legally build this infrastructure. Only one such licence has been issued in the last ten years, and the minister (the other one) hasn’t been able to make up her mind whether or not ISPs, for example, are permitted to build their own infrastructure.

Is Erwin suggesting that the private sector break the law? Sounds like he’s just trying to find excuses for his own pet socialist experiment. Build a network at taxpayer’s expense, lease access to it at cost, and thereby once and for all make it unprofitable for anyone in the private sector to compete with it.

The private sector hasn’t been legally permitted to build infrastructure, and just as this is starting to change, the government is making sure that the private sector will be undercut by state-owned boondoggles. Hey, “profit maximisation” is a bad, bad thing, in Erwin’s world.

The objective can only be to ensure that the private sector will never invest in infrastructure. If so, well done! I can’t for the life of me think what, if anything, Erwin has learnt from the dirt-cheap telecoms that is ubiquitous everywhere else in the world – including even in some African countries that once were lightyears behind South Africa in terms of economic development and infrastructure capacity.

Viva comrade Erwin. But wait, why’s he doing all this? Isn’t Poison Ivy supposed to be running the show? Sure, she is, but she’s also complaining. Apparently, the private sector isn’t implementing government policy fast enough.

You heard right: the private sector is meant to obey her top-down central-planning orders.

What she doesn’t grasp – and I can’t see how hanging out with comrade Erwin will change that – is how markets work. You can’t “use” markets. You can’t ask a market to “implement government policy”. A market is a bottom-up phenomenon that emerges when thousands of individual people and groups act voluntarily in their own self-interest, creating and trading the goods and services they need at prices that serve to balance supply with demand.

When participants in a market point to a particular fact – say, number portability – as an obstacle to competition, it doesn’t mean that when the minister decrees its implementation customers will immediately switch networks in vast numbers, as she seems to expect. Many are tied to contracts. Many know full well that the cosy mobile phone cartel isn’t going to bother to fight over the profitable pie, since there’s no upstart who’ll come and eat their lunch. After all, that’s illegal, so why hurt each other?

When she permits self-provision and voice over IP, but then seems to change her mind and later just clarifies everyone into confusion, all while the incumbent licencees – such as Telkom and WBS (iBurst) – call emerging competitors “fly-by-nights” or threaten them with protracted legal action, it’s no surprise that “the private sector” isn’t jumping to “implement government policy”.

You can’t just issue decrees and wait for citizens to jump and obey. Given their liberty, they’ll organise resources in ways that benefit them, which in the free world has resulted in the outcomes that here seems to be a mere policy pipe dream. Sadly, we don’t live in this free world.

Poison Ivy may have an excuse. She’s a sociology teacher. One might think this subject includes a primer on the economic organisation of society, but clearly it doesn’t. Ironically, Comrade Erwin is one of the very few people in the cabinet who does have a degree in economics, and he has taught on the subject. But as a committed socialist and unionist, he can’t have very much to teach the communications minister whose role he’s so deftly usurping.

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