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National broadband: what kind of monopoly?

By Tristan Ewins - posted Tuesday, 13 January 2009


Even now it does not seem so long ago that a genuine “mixed” economic model prevailed across nations the world wide.

In the wake of Depression and World War II, the challenge posed by communism - and emboldened social democratic and labour movements - framed the parameters of a virtual consensus.

On the one hand, policies of Keynesian, state-guided demand management, and full employment were combined with strategic public ownership. Areas were broadly accepted as being the realm of “natural public monopoly”: especially infrastructure and utilities. This included transport services and infrastructure, welfare services, power, water and communications.

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“Natural public monopoly”, here, provided for nation-building and the minimisation of underlying cost-structures. Progress was also achieved elsewhere: progressive tax transfer and welfare systems, free public education, socialised health care, and so on. Strong investment in public infrastructure, goods and services also complemented attempts to preserve a “full employment economy”.

Additionally: in Australia, there was the Commonwealth Bank and numerous state banks; and there were also state-owned insurance providers, state lotteries, public broadcasters, public housing and the like.

Importantly, it was recognised that provision for human need cannot be reduced to the working of “free markets”. The poor and the marginalised, and minorities, in particular, do not commonly wield significant “market power” as consumers.

The benefits of the “mixed economy” model were many.

Public enterprises provided dividends that could then be redirected into vital services. Cross-subsidisation helped ensure that essential services such as water and power were available on the basis of need. Public housing was provided for many who would otherwise go homeless.

Government ensured support for pure and applied scientific research - while there remained a role for public and home-grown defence industries - which some might have identified as being a matter of “national security”.

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In banking, insurance, and elsewhere - strategic intervention actually complemented competitive forces in markets which otherwise might have been characterised by oligopoly and collusion.

Communications infrastructure - the focus of this essay - was provided as a matter of natural monopoly - reducing potential cost structures, and venturing into rural Australia: where “free markets” would refuse to go.

And despite claims that the private sector was being “crowded out”, public ownership - considered broadly - was strategic. Despite hysteric cries from the neo-liberal Right, there always remained a deep, pivotal, and ongoing role for responsive and competitive markets.

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About the Author

Tristan Ewins has a PhD and is a freelance writer, qualified teacher and social commentator based in Melbourne, Australia. He is also a long-time member of the Socialist Left of the Australian Labor Party (ALP). He blogs at Left Focus, ALP Socialist Left Forum and the Movement for a Democratic Mixed Economy.
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