Atanu Dey On India's Development

Global Poverty and the Cell Phone

A magazine article in the New York Times of April 13th has the rather mistaken and misleading title “Can the Cell Phone End Global Poverty?” (Hat tip: Abhishek Sarda). The article title is misleading because it doesn’t even remotely attempt to answer that question. It is instead about what is called a “human-behavior researcher” or “user anthropologist,” in this case someone who works for Nokia and essentially tries to figure out how people actually use their phones and thus how phone companies should design phones for greater usability.

In any article where the words “poor,” “cell phone,” and “development” appear, it is mandatory to mention the usual suspects: Grameen, Kerala fishermen, and microfinance. All this is news only if one has been living in a cave for the last decade without an internet connection. What bugs me was the implicit promise in the title. Can something — any single thing at all — end global poverty?

Poverty is a big word. It is multi-dimensional. It is complex in its causes, it is hugely complex in its implications, and it is perhaps the most intractable of all social challenges that humanity faces. Poverty has been the characteristic condition of humanity since its birth. It is not the existence of poverty that should surprise us but rather that some significant portion of humanity in the relatively recent history (about 100 years or so) are not living in poverty. Though it is not as inescapable as death, poverty has been much of human history’s most common condition. Ending poverty on a global scale will require a combination of technical ingenuity, enlightened political leadership, compassionate societies, and such on a global scale. Just technology alone cannot solve any problem as enduring and non-technical as the complex problem of global poverty.

You know that Monty Python skit involving a dead parrot. The character that John Cleese plays comes to the pet shop to return a parrot which he had “purchased not half an hour from this very boutique.” The problem was that the parrot was dead. The shopkeeper insists that the parrot — a Norwegian blue — is not dead. It is, he variously claims, merely resting; pining for the fjords; that it prefers to kick back. John’s character is frustrated and finally explodes:

“It’s not pining, it’s passed on. This parrot is no more. It has ceased to be. It’s expired and gone to meet its maker. This is a late parrot. It’s a stiff. Bereft of life, it rests in peace. If you hadn’t nailed it to the perch, it would be pushing up the daisies. It’s rung down the curtain and joined the bleedin’ choir invisible.

Viz-a-viz the metabolic processes, he’s had his lot. All statements to the effect that this parrot is still a going concern are from now on inoperative. This is an ex-parrot.”

I feel a bit like that guy. I repeatedly keep insisting that technology is not the answer to all of the world’s problems. Technology helps only on those aspects of a problem that are technical in nature. So here’s yet another of my attempts at explaining why I think technology cannot solve the problem of global poverty.

In its most general formulation, problems involve constraints and their solutions involve choices within those constraints. If there were no constraints in a system, there would be no problems. To the extent that any particular problem has a solution at all, the solution involves making choices. Good solutions are the consequence of correct choices. Technology often relaxes some constraints to some degree, and thus expands the choices available. This expansion of choices is good but it is not costlessly so: greater choice implies a greater burden in making the correct choices. In other words, when the choice set expands, the chances of making the wrong choices also goes up.

Specifically in the case of mobile phones, we can immediately note the constraints that it relaxes. It essentially makes long distance communication of information possible. But then so do carrier pigeons, smoke signals, semaphores, the telegraph, the pony express, and land line phones. Mobile phones have an advantage over those earlier technologies because it is better, cheaper, faster, more accessible. So the second constraint the mobile phone pushes back is financial. For a given amount of money, you get more capacity. Third, the technology is transferable and is easily adopted. You don’t need to be literate, and you don’t need expensive terminal equipment.

What economic function does the mobile phone serve? It reduces transaction costs, to put it in economics terms. When you use the phone to ask for directions perhaps, you save time that you would have otherwise wasted in going round in circles. When you call ahead to fix up a meeting, you avoid a wasted trip if the person is not available. Telecommunications is a substitute for transportation in many instances.

By reducing transaction costs, the efficiency of the process goes up. That is, increased productivity and therefore more production for the same effort. More production, in turn, means more stuff. More stuff for a given population means more stuff per person. Stuff, as you all know, is what it is all about. If a person has too little stuff, he is poor. To the extent that global poverty can be helped through increased production of stuff, and to the extent that more efficient communications helps in production, only to that limited extent can cell phones affect global poverty.

Technology is an amplifying mechanism. Another way of saying that is that technology enters the production function multiplicatively. You have to have something to amplify to be able to use an amplifier. If there is no signal, no matter how powerful the amplifier, there will be no output. The productive capacity is multiplied by technology but where there is any production going on and what is being produced is a consequence of choices that were made outside of technology. That is the bigger challenge because the ability to make the correct choices is something that cannot be as easily imported as the importing of technology.

In the end, affluence — which I define here as the absence of poverty — is a consequence of correct choices made deliberately and consciously over the long term. Affluence is the result of economic policies made by thoughtful and wise policymakers. The existence and the necessity of such people is independent of the level and sophistication of the available technology. To solve our problem of poverty, technology is definitely necessary but it is far from sufficient.

Related links:

(1) Stuff and Ideas.

(2) The Importance of Producing Stuff.

(3) The Tathagata’s Sermon on Economics.

  • Amit

    You raise some valid points, and I’ve seen this kind of thinking (simply getting technology into the hands of the poor will raise them above the poverty line) among a few of my techie friends too. But as you point out, it depends on the situation, and technology may or may not be the solution.

    More stuff for a given population means more stuff per person. Stuff, as you all know, is what it is all about.

    Is it? :)

    If a person has too little stuff, he is poor.

    That would be all fine and dandy, but “more stuff” runs into the biggest constraint – finite and limited resources on planet earth, including oil that makes most of that “stuff” happen. Then of course, we have the bigger question of what “stuff” is necessary to alleviate poverty, and what “stuff” is a “want,” and how much of it is presented as a “need” thanks to marketing and advertising – which you mentioned in your milk post.
    ;)

    http://youtube.com/watch?v=OqZMTY4V7Ts

  • http://www.rationalfool.com The Rational Fool

    where there is any production going on and what is being produced is a consequence of choices that were made outside of technology

    Not necessarily! It’s a rather narrow interpretation of technology to say that it enters only the production function.

    What if technology were an enabling mechanism for the production and dissemination of knowledge and information? Better information leads to better consumption and investment choices [bone-headed politicians excluded!]. Innovative genius, as any aspiring Ph.D. would readily admit, is 1% inspiration and 99% perspiration in the library and online :)

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  • pankaj

    I find it quite foolish,some years back some laptop manufacturer had also said something like this .
    The east asian formulae was simple educate,health for everybody,population control,sensible policies and u have a miracle economy.

  • lurker

    Amit,

    Do you ever read any of the posts here or just come here so that you can leave a charm-everyone comment?

    The example you gave of Oil here is not very relevant to this discussion.

    Take Some Rest Buddy.

  • http://www.deeshaa.org Atanu Dey

    I don’t delete comments because I believe in free expression. But I expect some civility in the discourse, however much one disagrees with the topic or other people. It would be nice if people would not write anonymous comments because one should be able to stand behind one’s opinions. It becomes especially important to not hide behind anonymity when one is making a claim against another.

    On my blog I do call people names when I feel that the name is justified. And I do so without hiding.

  • Amit

    Dear lurker,

    Your comment made me smile. :)

    The first paragraph of my comment was relevant to the post, while I admit that the second part related to “stuff” was somewhat tangential, but it does touch the heart of the matter.

    Current economic systems are primarily oil-based, stuff needs energy (currently, mostly oil) to produce and distribute, and as oil is running out, unless there are alternative sources, we’ll have 1. less stuff, and/or 2. more expensive stuff. It follows that people won’t be able to buy stuff, hence no alleviation of poverty and maybe even increase in poverty, assuming that more stuff one has, less poor s/he is – which I don’t quite agree with, but that’s more in the realm of philosophy than economics. So do you still think that mention of oil is irrelevant?

    I comment on what Atanu writes, present my POV – sometimes, it agree with Atanu’s POV, and other times, it doesn’t. Take it for what it’s worth, my friend, continue to be charmed and continue the baat cheet ;) (conversation).

    Also, one very important lesson that I’ve learned regarding internet discussions – which I’ll share with you for free – is: “let’s agree to disagree.” :)

    Best.

  • http://the-redpill.blogspot.com vakibs

    Amit

    Peak oil is a real menace, but alternative sources of energy today. Nuclear power is a safe, affordable and extensive resource which will cater to humanity’s energy needs for several centuries to come.

    Atanu

    The importance of producing stuff is taken. But there has to be an established market to consume the stuff that is produced. The “stuff” cannot be consumed within a poor country because there is simply not enough purchasing power. In the ancient days, European countries dumped this “stuff” onto their colonies, and developed.

    In the current age, the developed world such as USA/Europe has enough hunger for “stuff” that countries like China can dump it over there.

    You have reduced technology to an amplifying factor in production. But that is not its primary role. Universal access to cheap information is a critical factor in educating the society. The society, once it is information-aware, gets adjusted to the dynamics of production. And shall have lesser scope of making mistakes.

    In other words, the chain of conscientious choices that you have mentioned, will be better made by a society which is equipped with the necessary information. This is where technology bridges the gap.

  • Amit

    This is getting way off-track, but what the hey, that’s the nature of internet discussions. :)

    Nuclear power is a safe, affordable and extensive resource which will cater to humanity’s energy needs for several centuries to come.

    vakibs:

    Two of the terms you use to describe nuclear energy – safe and affordable – are very subjective and debatable. Safe for whom? In relation to what? I don’t know of any modern energy source that’s “safe” – they all have risks – and pros and cons associated with them. The issues IMO are whether those risks are acceptable or not, do the pros outweigh the cons and in what time-frame, have the less riskier alternatives been explored, who gets to make that decision and whether the decision process (in a democracy) is transparent to citizens.

    If you ask people affected by Chernobyl disaster, you’d probably not hear “safe” and “nuclear power” in the same sentence, unless it’s accompanied by a negative. For those who stand to profit from it, but live hundreds of miles away from a nuclear plant – even they probably don’t use the word “safe.”

    Here’s an article related to accidents in Japan:
    http://news.bbc.co.uk/1/hi/world/asia-pacific/461446.stm
    I wonder if there’s an independent watchdog group in India that reports on any nuclear mishaps, or is all the information controlled by the State.

    As for “affordable,” maybe you should look up the amount of subsidies that the US government has given to nuclear industry over the decades, and the amount promised in the 2005 energy bill, to make nuclear energy “viable” and “affordable.” Compare that to the subsidies given to the promotion and exploration of renewable energy.

    The classic Catch-22 situation – can’t invest in it because it’s not viable. But it’s R&D and investment that has the potential to make something viable.

    I’m not much familiar with nuclear energy vis-a-vis India, but here in the US, there’s some debate going on. Here’s a series of 5 reports that go into much detail regarding the complexities involved with nuclear energy. It goes further and deeper than a simple (and simplistic) for-or-against argument:
    http://www.msnbc.msn.com/id/16272910/

    Two more links:
    http://www.cdi.org/nuclear/nuclear-terror.cfm
    http://www.citizen.org/documents/FatalFlawsSummary.pdf

    Happy reading!! :)

  • Amit

    vakibs:

    One more thing. Nuclear (or any other) power can replace oil where it is used as a source of energy/electricity, but not where oil is used as a raw material for “stuff” – plastics, fertilizers, petrochemicals etc.

  • http://the-redpill.blogspot.com vakibs

    Hi Atanu
    Sorry for highjacking the article. But I think it’s been time you wrote on your thoughts about a sustainable energy policy for India.

    Amit
    I live in France where 70% of the electricity is produced based on Nuclear Power. France is clearly leading the world here. And there have been absolutely no accidants in the entire history. Nuclear technology has advanced by leaps and bounds after Chernobyl. Today we know well why chernobyl occured (steam explosion) and nobody uses such ridiculously faulty designs anymore. About the inevitable dangers of terrorism, it is more of a planning issue than a scientific issue. In other words, it is a minor problem.

    Nuclear has always been a scare word, particularly so in Japan, which had to suffer two bombs during the 2nd world war.

    Indeed, in the early days of electricity, AC current had been scary too, because of its potential to immediately kill a person who touches it. But technology inevitably advances, and safety improves.

    About the issue of cost, the initial setting up would be more expensive, than say coal or oil based sources. But owing to the extensive resources that can be mined from earth (100 times more than fossilized carbon, not including thorium and dissolved uranium in the oceans) , nuclear energy is soon going to be cheaper than oil. We have enough oil to satisfy our needs for plastics, fertilizers etc.. if only we stop burning it carelessly as fuel.

    The only problem with nuclear power is that of disposing nuclear waste. This will surely be solved in the decades to come.

    Here is a decent article from the wired magazine :

    http://www.wired.com/wired/archive/13.02/nuclear.html

    I am not against renewable sources. But “currently” we have no cost effective way of harvesting them to satisfy the energy needs of the entire population of the world. Wind, water and sunlight can surely chip in. But it is only nuclear that has the potential to meet up to the needs.

    There is all types of lobbying going on in politics. And there is also lots of scaremongering. Huge forces are at bay, including oil corporations who don’t want to let their profits slip. One needs to make sense of all this, before donating subsidies.

    With respect to India, we are sitting on the second largest Thorium reserves on the planet. These will last the country for a couple of millenia :)

  • http://the-redpill.blogspot.com vakibs

    Here seems to be an endorsement fresh out of the oven (written 16 April 2008) by a scientific mind that I greatly admire – John McCarthy, the founder of the LISP language.

    http://www-formal.stanford.edu/jmc/progress/nuclearnow.html

    Please go through it, as it is very short and quite clear in its analysis of the politics of nuclear power.

  • http://the-redpill.blogspot.com vakibs

    Here is a useful analysis of why the nuclear power industry failed in the USA :

    http://www.phyast.pitt.edu/~blc/book/chapter9.html

    It is a cruel joke to comment that the nuclear industry received subsidies when it is being hampered by inane re-legislations.

    This link is from an online book by Prof Bernard Cohen, a nuclear physicist from the university of pittsburgh. Please try reading the entire book if it suits you.

    There has been a large anti-nuclear movement in the US during 1970s spearheaded by Mr. Ralph Nader. This activism has been good and resulted in improved nuclear safeguards. But these guys are completely missing the actual picture now, due to their obsolete arguments.

    http://www.pbs.org/wgbh/pages/frontline/shows/reaction/interviews/nader.html

    In this interview, Nader makes the extraordinary claim that French public does not offer popular resistance to nuclear power because of lack of political freedom !!! This is outrageous. Anyone who knows about politics in France understands that people eat, drink and breath politics here. The anti-nuclear movement went to the very extreme of firing a missile over a nuclear plant. Point well made ! But, French public in general continues to be quite favorable to nuclear power. This is because they are more intellectually open to scientific argument :)

  • Amit

    vakibs,

    Thanks for the links. I’m already aware of the debate in the US. Both the MSNBC report and citizen.org quote subsidies in the billions to nuclear industry – both in the past and in the 2005 energy bill, while the subsidies to renewable energy are a tiny fraction of that during the same time period. So, I’m not sure why that’s a cruel joke, unless you are talking about the taxpayers. Yes, the MSNBC report does mention regulations as one of the reasons.

    Yes, France and some other European countries do use nuclear power. I don’t have enough information on hand (regarding France’s political and social system) to evaluate whether what Nader said about France (government secrecy re: nuclear power plant operations and disposal) is true or not.

    As I’d mentioned earlier, as I see it, the issue in the US is whether the risks are acceptable or not, and who pays for it.

    John McCarthy considers voting for Bush over Kerry (because of nuclear power) a better option. People who reduce their voting choice to a single issue, and that too nuclear power – I’m a bit unsure about their judgment, even if they invented a computer language, FWIW. There are lots of bright minds who are experts in their specific fields – doesn’t necessarily mean they’ll be experts in other fields too.

    If the problem of nuclear waste disposal is solved, instead of leaving it as a legacy to future generations, I’d be more inclined to consider it. It’s human nature to strive to leave the world a little better for our children and grand-children instead of borrowing from them for our current needs and wants, and by that criteria, nuclear power comes up short. IMO. YMMV. :)

    Good conversation. Thanks.

  • Amit

    correction:

    “Yes, the MSNBC report does mention regulations as one of the reasons, but I wonder if Three Mile Island accident had anything to do with increased regulations.”

  • Amit

    Amory Lovins harvests bananas in his home in Colorado and thinks nuclear power is the wrong decision:

    http://a4nr.org/news-and-events/10.22.2006-torontostar

    Some of the economic-related information/figures will probably make more sense to Atanu or other economist readers (than layfolks like me) – who are capable of critiquing what Mr. Lovins states in the interview. Atanu, how about a post on it? :)

    More on Lovins and his work:
    http://www.rmi.org/
    http://en.wikipedia.org/wiki/Amory_Lovins

  • http://the-redpill.blogspot.com vakibs

    John McCarthy is not picky about nuclear power, he has thought deeply about several issues related to sustainable development, including fresh water, population, biodiversity, forests, food supply and so on. You can read about his thoughts on his webpage. He usually summarizes his arguments with numbers, which are usually absent in arguments from non-scientific politically minded people. I am not sure of his endorsement of Bush over Kerry, but he has his reasons. You obviously have yours.

    The online book of Prof Bernard Cohen, who is a nuclear physicist (and also a avowed supporter of the Liberal Democrats) can clarify lots of your doubts.

    He argues that there is a huge misrepresentation in the public about the problem of nuclear waste. For example, people tend to think that this waste will be at radioactive rates for about 10,000 years. But in fact, after just 200 years, this waste will be no more radio active than commonly occuring uranium in the earth’s crust ! Further, this waste will be carefully monitored in a known facility, where as naturally occuring Uranium is exposed to water and air.

    One should note that nuclear energy is not opposed to renewable sources (sun, water and wind). Prof Bernard Cohen, infact, encourages funding for renewable sources. But he admits that none of his colleague scientists who work in this areas, are in the least hopeful that solar energy can satisfy all our energy needs in any near future. There are some fundamental problems with photovoltaic cells.

    The US government has its reasons for its allocation of funds for nuclear and solor sources. The plain truth is that none of this funding is sufficient for any of them. The morons in the US administration thought that it is easier to get energy security by waging wars in the middle east, than by going nuclear. France has chosen the nuclear option because it clearly doesn’t have the geopolitical strength to wage wars as the USA does.

    Cheers man, I think I will sign off from this debate now.

  • Amit

    For example, people tend to think that this waste will be at radioactive rates for about 10,000 years. But in fact, after just 200 years, this waste will be no more radio active than commonly occuring uranium in the earth’s crust !

    But what does that tell us? That the radioactivity of nuclear waste after 200 years will be the same as naturally occurring uranium. Unless we know whether the radioactivity of naturally occurring uranium is harmful or not (or how harmful) to humans when exposed to it and at what concentration, that statement is meaningless. Or whether the concentration of waste will be the same as naturally occurring uranium.

    And there are many naturally occurring metals, ores, chemicals (in plants) that are harmful to us. So, using “naturally occurring” does not imply “safe.” I doubt if people build their houses next to naturally occurring uranium ore sites.

    Thanks for all the links. I enjoyed the conversation too – I like the information exchange better than ideological pulpit-thumping. :)

    Cheers.