iphone v Gutenberg's Press - Sachs & Sachs
iPhone is somewhere between in part and largely responsible for the coming abolition of absolute human poverty.
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iphone v Gutenberg’s Press

What Hath The iPhone Wrought? OK, Maybe Not Luther, But It’s Making The Poor Rich

Tim Egan has a piece wondering what it is that the iPhone is really going to do. By this he means that Gutenberg’s Press, that movable type introduction into Europe, brought us Luther, the reformation and presumably the enlightenment. That simple availability of cheap books, the removal of the scriptorium bottleneck, meant that ideas could whizz around and thus things could change.

It’s worth making one point which is that it did take near 80 years for the new technology to aid Luther–or perhaps for Luther to make use of it. So after a mere decade we might be looking a bit too hard here.

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So, a question in the summer of this 10th anniversary of the iPhone: has the device that is perhaps the most revolutionary of all time given us a single magnificent idea? Nearly every advancement of the written word through new technology has also advanced humankind.

Sure, you can say the iPhone changed everything. By putting the world’s recorded knowledge in the palm of a hand, it revolutionized work, dining, travel and socializing. It made us more narcissistic — here’s more of me doing cool stuff! — and it unleashed an army of awful trolls. We no longer have the patience to sit through a baseball game without that reach to the pocket. And one more casualty of Apple selling more than a billion phones in a decade’s time: daydreaming has become a lost art.

Still, for all of that, I’m still waiting to see if the iPhone can do what the printing press did for religion and democracy. This year is also the 500th anniversary of Martin Luther posting his 95 theses against the corruption of the Roman Catholic Church; the Geneva museum makes a strong case that the printing press opened more minds than anything else.

It’s still too early for us to really know about the iPhone, which of course we’re both using here to be synonymous with the smartphone. It takes time for something to happen, it takes time for people to study it and academic publishing takes a couple of cycles of handset development all by itself. The iPhone could have proven the existence of God on the day of its unveiling and we’d still probably not heard about it yet given that system.

So to uncover the effect of the iPhone we’ve really got to look back a bit to the earlier dumb phone. And there we do know about the effects:

Over in another of the ivory towers the effect of the smartphone, rather than its genesis, is agreed upon – it’s making the poor rich. Here we mean the truly poor, those billions out there in developing lands. Much of what we actually know comes from just mobile phones – we project those results onto the smart kind. From those dumb ones we find that just 10% of the population having one grows GDP by 0.5% annually. Not an extra 0.5% on top of whatever growth, but a full half a percent of more GDP each year.

The classic example of how this occurs is the unlikely subject of sardine fishermen off Kerala in India. Radios were too expensive for people at near subsistence level, so those out on the boats didn’t know which port markets still had buyers, which were short of stock and so on. A method of communication allowed this information to filter through and the end result was higher wages and lower costs for the fishermen in fuel and so on, lower prices to consumers. This is a pure efficiency gain, the Holy Grail of economics.

We can go further, what this communication method allows is contract completion. We may have forage and the guy on the other side of the hill hungry goats but if we each don’t know that then a deal cannot be struck. And deals, the movement of resources from lower to higher valued uses, simply are what economic growth is about. That’s just the definition we’re using. Being able to communicate with more people means having economic growth.

These past few decades have seen the number of people in absolute poverty fall from some 40% of all humans to just under 10% now. We expect that to decline to zero in the next 15 years or so. This is not all to do with technology of course but it’s certainly at least partly to do with it.

At which point, to slightly change our definition here. As Ha Joon Chang and Hans Roslin do with the washing machine, they use that to mean the whole gamut of domestic labour saving technology of the past century or so, from the drip dry shirt through the steam iron to the microwave and washing machine. Let’s use “iPhone” to mean that combination of mobile telephony–including the dumb phone–out to the mobile internet and Facebook and WhatsApp. For that’s really what the technology is, that whole, not just the handset part of it.

Using that definition the iPhone is somewhere between in part and largely responsible for the coming abolition of absolute human poverty. That’s not bad really, and beats Luther in my book.


Tim Worstall Fellow at the Adam Smith Institute in London

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