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Re: wisdom? Whose?



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[Topics under debate]: GOOD GOVERNANCE
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    I will take up one point here, although the rest of the message doesn't
interest me.

Charu datt wrote:

> Perhaps you could explain the 'ultimate folly' of the following
> reasoning:
>
> Suppose a village has 50 potential phone subscribers.
> Since the cost of laying cable/fiber from the central office exchange to
> the
> village exchange will be divided among 50 customers as opposed to 50,000
>
> customers, in an [urban] area of higher population density, the initial
> cost a
> non-subsidized operation needs to charge subscribers is then 1000 times
> what
> an urban subscriber would be charged. This would cut the the pool of
> potential
> subscribers to 5 from 50, driving up the cost to 10,000 times an urban
> line,
> thereby reducing the potential traffic to the point that it is now
> unprofitable for a non-subsidized operation to provide phone service-
> and
> phone service thus never becomes widely available in rural areas.
>

    There is a thing called "mobility" (even under a socialist setup!).
Thanks to mobility these people can move to areas that would permit high
investments and high returns on infrastructure - no amount of subsidization
can make up for this improvement!!  Although it would be nice to have a garden
in the desert it is just not practical.  Government's effort to create "a
garden in the middle of the desert" really hurts everyone.  For example, the
entire Telecom sector in India is growing at a much slower rate than say
China's or America's thanks to our lop-sided policies of charging high lisence
fees to feed the rural telecom effort.  We can't oppress the consumer of one
part of the country to feed some joe shmo in another part - it is
undemocratic!!  Instead, the Government should encourage relocation.

> The same argument applies to electric supply, and governments worldwide
> do
> subsidize rural electrification- possibly because it is considered
> socially
> desireable to provide an incentive for some people to continue to live
> in
> rural areas and grow food for everyone else even though there is not an
> immediate and tangible 'profit' that any accounting course could help us
>
> calculate, though I suppose we could dispense with this 'ultimate folly'
> and
> allow food prices to rise to the point that people move out of the
> cities and
> back to the villages and we revert to being an agrarian society with no
> use
> for things like electricity, telephones, and technology in general.
>

    Or simply encourage rapid expansion of infrastructure by dismantling the
self-serving license raj altogether.  No one has to live in caves then!  Your
argument for Government subsidies ignores the oppression and "robbery"
committed elsewhere.  This kind of transfer of wealth has one flaw: it doesn't
help create new wealth!  And hence, instead of the population growing
wealthier, we see a gradual degeneration - trademark of socialism!!

Sincerely,
Vamsi M.


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