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Thanks to Markets, Mobile Phones Have Been a Game-Changer for the World's Poor

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Tags World History

03/12/2019

In the United States, the newest model of any cell phone is usually going to be sold as faster and smaller. Even as large-screen phones have gained popularity, they depend on being thin and light to attract customers. Bulky phones don’t fit well in the back pocket of skinny jeans, and they aren’t as fun to hold while mindlessly scrolling through Facebook.

So perhaps it isn’t a surprise that people are laughing at Energizer’s new cell phone, whose selling point is a battery that can last weeks between charge. Holding other variables constant, nobody would reject better battery life, but few people seem enthusiastic about a phone the size of a brick. Tech reviewers are running headlines about the “battery that has a phone attached,” and criticizing it as “a slab of mediocrity.”

But these people miss the incredible benefit that such a phone might offer people who don’t have a phone charger in their car and every room of their house. For the world’s poor, such as the nearly hundreds of millions of cell phone users in Africa, a longer battery life can translate into incredible gains in quality of life.

Not all countries go through the same stages of technological development. In advanced countries such as the United States, where technology progressed more quickly than the rest of the world, the pattern of development ran from telegraph lines, to house phones, to cell phones and the internet.

However, thanks largely to international trade, technology does not advance along a standard path. Unlike the United States and Western Europe, Africa did not spend the nineteenth-century laying telegraph lines. As cell phones are displacing the market for land lines, it would make little sense for Africans to waste capital investment laying the foundation for an outdated technology. The continent is largely bypassing land lines in favor of mobile phones.

Many of us can remember the time, not very long ago, when cell phones were a luxury, rather than a necessity. It is easy for us to think that for poor people in third-world countries, the progression of technology would be roughly the same as it was in the United States, and cell phones are a luxury that the world’s poor shouldn’t waste their limited income on. It might be easier to think this way for a population whose primary use of a cell phone consists of non-essential functions such as social media and Words With Friends, but we shouldn’t forget that cell phones are also incredible labor-saving devices. For the world’s poor, the gains from any labor-saving technology are monumental.

Cell phones have improved the lives of impoverished Africans in ways that are too numerous to list in full, but a quick Google search will turn up a panoply of examples. For an illiterate fisherwoman who lacks access to electricity, the cell phone allows her to keep her fish in the stream until a customer calls in an order . She can then prepare the fish for sale as needed, rather than absorbing the expense of preparing a supply of fish she may not sell before they start to rot.

For a continent racked with disease, a mother without a cellphone may have to carry a malaria-stricken child on a three-hour journey only to find out that there is no doctor in the nearest town. The mother with a cell phone can call an ambulance.

For people who have to travel by foot, cell phones allow the spread of information through rural communities. They allow people to run errands for their job with greater efficiency, or know more precisely when to leave their work to go meet somebody. As Sara Corbett noted in 200, writing for the New York Times:

To someone who has spent years using a mobile phone, these moments are common enough to feel banal, but for people living in a shantytown . . . the possibilities afforded by a proliferation of cellphones are potentially revolutionary.

Many articles on the subject compare the rapid growth of Africa’s cell phone usage with the comparatively lackluster growth in access to electricity or piped water, but the mystery is easy to figure out. While governments maintain control of utilities, many African countries started to privatize the phone industry in the 1990s (previously, the telephone industry was nationalized in most countries). With the industry privatized, new companies popped up, and they started to offer minutes and data plans in smaller, cheaper bundles that made cell phones accessible to the continent’s impoverished majority. Cell phone usage consequently skyrocketed.

But while market forces have resulted in the rapid development of the cell phone industry, with some networks in Africa now boasting 5G coverage, electricity — still a state-controlled commodity — remains in short supply. Some African entrepreneurs have started earning a living operating charging stations for people.

But as many of the people who can benefit from cell phones the most still live in rural areas of Africa, a trip to the city might cost a day or more. The result is that while cell phones have proven tremendously useful, the rural poor have to be incredibly sparing with their usage. For these people, Energizer’s “slab of mediocrity,” and its potential battery-life competitors could prove to be a life-changing innovation. And as long as the markets remain open, Africa and other poor regions can expect to see better and cheaper options from the many companies that undoubtedly want access to the world’s fastest growing market for mobile phones.

Chris Calton is a 2018 Mises Institute Research Fellow and an economic historian. He is writer and host of the Historical Controversies podcast.

See also his YouTube channel here.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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