Thursday, 19 November 2015

Poor getting richer faster than the rich

THE poor got rich while no one was looking. Their enrichment has been so hidden in plain sight that junkies goose-stepping to inequality messiah Thomas Piketty’s drumbeat think the poor are getting poorer. My new cellphone proves them wrong.

It all happened without any government initiating, funding or even foreseeing the silent revolution. Meddlesome bureaucrats never saw what was before their eyes, but they sensed that something was happening. That impelled them to implement anti-poor policies: controls that increase prices, reduce choices and retard innovation. If something moves, they tax it. If it still moves, they regulate it. If it doesn’t move, they subsidise it. If it still doesn’t move, they replicate it.

The miracle of market-driven poverty-relief was driven home to me when I bought a cheap cellphone last week. "You can have one for R300, or a smartphone for R499," I was told, "but it’s crude; not like a Galaxy Note 4." "Entry-level calls, SMSs and data cost R39, R25 and R29," he said. Having checked my usage, he said my monthly average would cost R150 "and it’s easy to top up on the phone, the net, or shops everywhere."

Far from being "crude", my newSmart Kicka is awesome. It does nearly everything high-end phones that cost forty times more do. It includes a touch screen, a calculator, radio, camera, GPS, internet, Wi-Fi, fax, hotspot, and too much more to mention.

Had grandparents of "the poor" been able to afford a R20,000 Encyclopaedia Britannica, they would have had only a tiny fraction of the information now in poor people’s pockets.

Poor grandparents never had telephones. Rich employers cranked handles on huge wall-mounted contraptions to get "operators" to "place calls". "Trunk calls" to other towns took hours to connect, and were so expensive that "the rich" were confined to truncated conversations. The modern "poor" make voice and previously impossible video calls to anyone anywhere at almost no cost.

"The poor" once communicated by posting letters in isolated "letter boxes" using expensive paper, envelopes and stamps. Since most were illiterate, they needed someone to write and read mail. Now e-mails and texts are exchanged without knowing a recipient’s whereabouts.

Expensive photographic and video cameras from the past are now contained in a device that offers poor people free "online" education, all of which would have cost their grandparents thousands of unaffordable rands.

There were no fax or photocopy machines. When they arrived, they produced blurred and fading analogue images on unwieldy paper. "The poor" now send and store perfect full-colour images.

Their teeny devices, curiously still called "phones", are computers, which were unknown to their grandparents. They convert handwriting and dictation to audio or text, for which grandparents needed secretaries or "copy typists".

Poor grandparents could not afford a crude crackling shortwave radio. "The poor" can now choose between thousands of FM radio stations from every country in every language. They play songs, books and movies. A GPS tells them where they are, where to go and how long it will take. They make free emergency calls, get medical advice, make reservations for cheap motorised transport their grandparents could not afford, and order pizzas. They shop for best prices and quality, and take indulgent "selfies".

Much of what "the poor" have in their pockets in a single device was too huge to carry, if it existed, and would have cost cumulatively R50,000 or more.

My tiny phone is a tiny example of a huge phenomenon: the extent to which, measured by what matters most, the poor are getting richer faster than the rich. It shows that, notwithstanding thoughtless and dangerous inequality disinformation, real wealth is not about nominal dollars, but real world access to the amenities of life.
• Leon Louw is executive director of the Free Market Foundation.

Source: BusinessDay Live

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