Friday, December 2, 2005


After reading this, I hope Negroponte has thought through some of these issues Henderson brought up, or he'll seem very naive at the end of the day.

The biggest mistakes in any major project are typically the earliest mistakes.* Early decisions are important because of all the downstream resources and actions that they commit. A case in point is the vaunted $100 laptop. In case you haven't heard, Nicholas Negroponte, the founding chairman of the Massachusetts Institute of Technology's Media Lab, is pushing ahead with his plan to make a $100 laptop that will be distributed to millions of young people in poor countries around the world. Few people admire Mr. Negroponte more than I do, but his plan for how to distribute the computers is a tragedy in the making.

First, let's be clear on what is not tragic: the plan to produce a laptop that can sell for around $100. This would be a boon even if there were no plans to distribute them. Any time someone comes up with an improved technology or a technology that sells at a low price, society benefits. (I'm assuming, of course, that the technology is pro-wealth-creation and not anti-wealth-creation: for example, a new way of breaking into houses hurts rather than benefits most of society.) Not just people in poor countries, but also people in richer countries, would benefit.
Would people in poor countries buy $100 laptops out of their own money? Some of them would. And if the goal is to get the computers into their hands, then no government program is needed other than to abolish government-imposed trade barriers. Many people in those poor countries -- the vast majority, I suspect -- would not be willing to spend even close to $100 on laptop. What that means is that they would prefer to spend $100 on other items -- food, iodine pills for water, DDT to protect them from malaria, basic generic drugs, maybe even a sewing machine. And if their governments are buying laptops for them, the governments are getting the revenues from somewhere. Possibly, Negroponte will be able to persuade Bill Gates or others to cough up many of the funds. But the vast majority of the funds are likely to come from the governments of poor countries, which means they will come out of the hides of those countries' citizens, all but the richest of whom are fairly poor. So what started off as a completely innocent, let's-help-the-poor-in-poor-countries proposal will end up, with government involved, as just one more way of government using force against its own people to buy goods for them that they regard as luxuries, preventing them from buying the goods that they need to make it to next year. That's a tragedy. And if Negroponte rethinks his strategy, it's a tragedy he can help avoid. He should help get the computers produced, keep a big distance between himself and the likes of Kofi Annan, and then let the market work.
(full article)

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