Iraqi phones

As I expected, the Occupation Government cares more about expanding their mercantilist empire than Iraqi liberty. Story here.

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I'm not thrilled that the

I'm not thrilled that the US shutdown the network, but in their defense if more and more people simply ignore the rules established, then there is an increased danger to our troops. More of a mindset. Hopefully, the licenses will get granted very soon and things will progress.

but in their defense if more

but in their defense if more and more people simply ignore the rules established

A civil society only needs a few rules; do not murder, do not steal, do not bear false witness. Which of these three does operating a cell phone service violate?

I'm not sure if Iraq is

I'm not sure if Iraq is ready to be called a civil society just yet.

Respect for the

Respect for the aforementioned rules enable civil society.

Which of these three does

Which of these three does operating a cell phone service violate?

"Do not steal"

There is a legitimate issue here (and I'm assuming that you and I have the same ideas about what is legitimate government action)--the conversion of common property to private property.

The cell phone company (Batelco) is using EM spectrum as common property without holding a license. Use of common property is not theft, but it leads to 'tragedy of the commons' where parties race to exploit a resource before anyone else does and no one has an interest in long term viability of the resource. Legislators are supposed to define property so it can be held privately and the owners can enforce their rights to the property.

Of course, in my perfect world, these wouldn't be called 'licenses' but rather 'deeds', and the spectrum would be cut up dispassionately (after all, the technical issues of how much power can be broadcast on what frequency separated by what distance is surely documented by standards organizations). The deeds would be auctioned off to the highest bidder with no woolly conditions about 'serving the public interests' that gives an opportunity to hide corrupt payoffs. If one bidder wants to buy three adjacant spectral bands over half the geographic area of Iraq and run GSM and someone else runs CDMA, that is the business of the deed holders, not of the government. Government only has to judge criminal cases of generating EM signals in a frequency or geographic area without a deed.

If Batelco are shrewd, they set up service as a publicity stunt to 1) demonstrate their ability to operate a cellphone network, 2) encourage adoption of the GSM standard, 3) create a buzz among prospective customers, and 4) put pressure on the de facto authority (CPA according to article) to speed up their decision to grant licenses. I doubt it took much "pressure" for CPA to get Batelco to cut service--it sounds like their license application to CPA is squarely in their sights.

It would be interesting to see if the two articles (one announcing that cellphone service was available and the other that it had been shut down) could be traced back to Batelco. I certainly wouldn't have known anything about them or the issue if it hadn't been for this press...

Mark, Thanks for the

Mark,

Thanks for the thoughtful commentary. Like you, I hope that in the end, all commons, including the EM spectrum, eventually become private property.

However, you propose that the govt auction off the 'deeds' to various parts of the spectrum dispassionately. That is one way to get the end result we both desire.

But isn't there another way? Much of the American West was 'homesteaded'. Am I incorrect in concluding that Batelco is simply homesteading the EM commons? And if not, why isn't this another legitimate means of achieving the same end result?

I fear that rather than dividing up the EM spectrum dispassionately, the US govt is simply going to give private property rights to those that are in political favor over a company like Batelco that is ready and willing today to invest in Iraqi infrastructure.

I found the CPA website.

I found the CPA website. Following the links to the Mobile Phone Licences Competition, the deadline for bid submissions is 14 Aug 2003. I suspect that in this case, Batelco was well aware that the tender process was underway when they switched on their network.

I do admire their guts in risking the $5m in equipment to keep the pressure up on the tender process. The faster the process happens, the less chance there is for secret deals to be made. I was in South Africa during their cell phone licensing fiasco, and would like to see those mistakes avoided. Of course, if I was a competing bidder who had played by the rules, I might lodge a complaint.

Those observations don't really address your comment about homesteading, though. Homesteading is a legitimate way to acquire property and a rational reaction for an individual when presented with common property that he desires. But the homesteader must defend his territory as an animal would, without the benefit of a rational legal system to support his claim. If there is little or no competition for the property, this is possible. But as soon as the competition becomes fierce, conflicting claims to common property will lead to the use of force, and it will not be clear who is defender and who is aggressor.

I don't think it is possible or necessary to convert all property to private property. The competition for some resources (for example, oxygen) is so low, and the costs of monitoring so relatively high, that it doesn't make sense for us to have to buy and sell our oxygen the way we do our food or water. I wouldn't agree with people who think that oxygen should be free because it is more vital to our life than food and water--I think it's just so plentiful that it's not worth the trouble. Further, some property (such as fishing rights) could be anticipated well in advance, but others (Internet domain namespace) are esoteric enough that it would be difficult to define the associated property rights before the competition heats up.

One of the few (it might be the only, but I don't think I've considered all situations) uses for a legislature that I consider legitimate is when they define new property. I believe government should be very limited, but there are still a lot of tricky issues at this interface between common and private property. At what stage should a legislature define property rights? Should they be proactive and create lots of laws that have to be policed so that conflicts can be avoided? Should they wait until after there are a few criminal court cases over property disputes? To what extent should they ask 'homesteaders' who are already benefiting from the common property to help advise on the laws? I tend to get different answers depending on the type of property I consider--fishing rights, domain namespace, EM spectrum, CO2 production, ad infinitum.

If you have any ideas or can recommend some reading to help clarify the conversion of common to private property, I could probably benefit from spending some more time thinking about it.

Mark, Wow - great response!

Mark,

Wow - great response! If we have smart people like you reading the blog, we might be doing something right.

It seems that the main source of disagreement between us is that of pre-emption vs. reaction. For example, you state that "But the homesteader must defend his territory as an animal would, without the benefit of a rational legal system to support his claim. If there is little or no competition for the property, this is possible. But as soon as the competition becomes fierce, conflicting claims to common property will lead to the use of force, and it will not be clear who is defender and who is aggressor. I agree with you - there needs to be a means for delineation of property rights when they are under dispute. However, I would prefer to let common law courts reactively settle conflicts that develop rather than have legislation create a pre-emptive one-size-fits-all solution. In other words, it appears to me (acknowledging that I don't know all the facts in this scenario) that Batelco ethically ought to be given property rights over the segment of the EM spectrum they use. When another company comes along and has conflicts about various frequencies with Batelco, only then should an arbitrator be used to settle the disputes.

As I've said before, I see common law as reaction whereas legislation is pre-emption. And I prefer the former in almost all cases.

Re: the necessity of conversion of commons into private property. You are correct; there is no reason to convert oxygen into private property. In the Austrian framework, oxygen would not be considered a means - something scarce used to achieve human ends. Rather, it would be considered general conditions of action. I do espouse the conversion of common means into private property whenever possible, including even things like personal protection, justice, and military forces. Yes, there are arguments against privatization of those things such as the holdout problem, the public-goods problem, and the problem of externalities, but I'm not convinced they hold up under close scrutiny. Neither am I fully convinced that such a world lacking any commons could exist today. However, following the Austrian precept of methodological individualism, public property leaves much to be desired ethically. It is controlled by those who wield the greatest amount of force under the guise of common ownership, which I don't think can truly exist.

Anyways, thank you for your stimulating comments.

Spoonie, I'm not thrilled

Spoonie,

I'm not thrilled that the US shutdown the network, but in their defense if more and more people simply ignore the rules established, then there is an increased danger to our troops. More of a mindset.

It was this very mindset of following the rules without any appeal to reason that resulted in the rise of a tyrant like Saddam. Someone like Saddam could not rise in America (at least today) because America is filled with people who disregard the rules whenever the rules seem arbitrary. In order for Iraqis to have true liberty, the mindset of following whatever rules are in place needs to be eradicated.