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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Why the Ed Stone continues to haunt Labour

The party has been fined a record £20,000 for undeclared election spending.

It’s one of the great unsolved political mysteries of our time. What really happened to the Ed Stone? Was it smashed in to little tiny pieces or is it still gathering moss in a warehouse? For those of you who have been living under a rock, or in this case a giant tablet, since last year’s general election — the Ed Stone was the much-mocked policy plinth which the former Labour leader, Ed Miliband, promised to place in the rose garden of Downing Street if he won.  

It was unveiled amid much fanfare only to spark a wave of viral humiliation for the beleaguered Miliband. The Mole remembers peering painfully through its paws and trying to ignore the smirks of its fellow rodents. Now, the spectre of the ill-fated tablet has arisen to cause the Labour Party one final humiliation.  

An investigation by the Electoral Commission has revealed that two sums totalling £7,614 were spent on the Ed Stone which were missing from the party’s election return. The report found that in total Labour failed to correctly declare 74 payments worth £123,748 of campaign spending “without a reasonable excuse”. They were also missing 33 separate invoices totalling £34,392.

The commission said Labour’s general secretary, Iain McNicol, who is also its registered treasurer, had committed two election offences and imposed a record £20,000 fine — the biggest since it began operating in 2001.

All of which has left the Labour Party red-faced once more, and the mole feeling slightly nostalgic for the days when politics was simple and the news was full of amusing images of politicians smearing bacon sandwiches across their faces and striking the odd biblical pose in front of a giant stone. Don’t forget, if the Ed Stone was standing proudly in Downing Street today, then Brexit would just be a bad dream.


I'm a mole, innit.