iPhones and ringtones: a parable of markets.

"Markets in everything!"

There is a problem in the New Statesman office. Like so many companies, we have a growing abundance of iPhones. At least half of the 40 million they've sold are here somewhere, by my count. But all these people having the same phone leads to a downside: the distinctive Apple message alert goes off, and everyone checks their screens thinking that they are the ones with a new text.

There is an easy, socially optimal solution to this problem, of course: everyone changes their text tone to something new, we all grow to recognise our individual tones, and confusion need never reign again.

Unfortunately, what is socially optimal is not individually optimal. I don't want to change my ring tone, because I've already learnt to respond to it. If everyone else changed theirs, then I could keep mine the same. But those incentives are the same for everyone else; no-one wants to be the first mover, and everyone hopes to be a free-rider.

Why? Well, an economist might say its because there are no markets in action. If everyone could bid to be the person who gets to keep their old ringtone, then people would have an incentive – in the form of cold, hard cash – to switch, while the person who most wants to keep their phone sounding the way it used to forks out the money equivalent to how much they care. If we truly have an efficient market, then this cannot fail to make everyone better off. And if the highest someone is prepared to pay is lower than the lowest it would take to make everyone switch, then we are already at the optimal solution.

The alternative to markets, of course, is government intervention. We don't have a government, but we do have an editor, who could very easily impose a rule mandating that employees use custom ringtones. That would work almost as well, although it wouldn't be the optimal solution. And with that, there's always the risk of corruption. What happens when our he gets an iPhone?

Markets in everything, even ringtones. Credit: Getty

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Commons confidential: Vive May's revolution

It's a risky time to be an old Etonian in the Tory party. . . 

The blond insulter-in-chief, Boris Johnson, survives as Theresa May’s pet Old Etonian but the purge of the Notting Hell set has left Tory sons of privilege suddenly hiding their poshness. The trustafundian Zac Goldsmith was expelled from Eton at the age of 16 after marijuana was found in his room, unlike David Cameron, who survived a cannabis bust at the school. The disgrace left Richmond MP Goldsmith shunned by his alma mater. My snout whispered that he is telling colleagues that Eton is now asking if he would like to be listed as a distinguished old boy. With the Tory party under new, middle-class management, he informed MPs that it was wise to decline.

Smart operator, David Davis. The broken-nosed Action Man is a keen student of geopolitics. While the unlikely Foreign Secretary Johnson is on his world apology tour, the Brexit Secretary has based himself in 9 Downing Street, where the whips used to congregate until Tony Blair annexed the space. The proximity to power gives Davis the ear of May, and the SAS reservist stresses menacingly to visitors that he won’t accept Johnson’s Foreign Office tanks on his Brexit lawn. King Charles Street never felt so far from Downing Street.

No prisoners are taken by either side in Labour’s civil war. The Tories are equally vicious, if sneakier, preferring to attack each other in private rather than in public. No reshuffle appointment caused greater upset than that of the Humberside grumbler Andrew Percy as Northern Powerhouse minister. He was a teacher, and the seething overlooked disdainfully refer to his role as the Northern Schoolhouse job.

Philip Hammond has the air of an undertaker and an unenviable reputation as the dullest of Tory speakers. During a life-sapping address for a fundraiser at Rutland Golf Club, the rebellious Leicestershire lip Andrew Bridgen was overheard saying in sotto voce: “His speech is drier than the bloody chicken.” The mad axeman Hammond’s economics are also frighteningly dry.

The Corbynista revolution has reached communist China, where an informant reports that the Hong Kong branch of the Labour Party is now in the hands of Britain’s red leader. Of all the groups backing Jezza, Bankers 4 Corbyn is surely the most incongruous.

Labour’s newest MP, Rosena Allin-Khan of Tooting, arrived in a Westminster at its back-stabbing height. Leaving a particularly poisonous gathering of the parliamentary party, the concerned deputy leader, Tom Watson, inquired paternalistically if she was OK. “I’m loving it,” the doctor shot back with a smile. Years of rowdy Friday nights in A&E are obviously good training for politics.

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue