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Lessons from Your Fax Machine

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Have you ever heard someone ask: “How did we ever get along in the days before we had fax machines?” Think back. Ten years ago, most people had never heard of fax machines. They had just been invented. They were enormous clunky things, costing thousands of dollars, producing fading copies on that awful, curling thermal paper. Their usefulness was limited because so few other people had one.

Today, for a few hundred bucks, you can get a neat little box that sits on the corner of your desk and lets you receive messages from almost anyone in the developed world. Even people who don’t have their own machines usually have access to one at a nearby business for a modest fee.

The fax phenomenon is not unique. I remember the first electric adding machine my father bought for his business, when I was about 10 years old. It cost $100-equivalent to almost $400 today. Nowadays, you can buy a calculator with a printer — more compact, and with more functions — for under $50.

Over the past three decades, revolutionary progress has been made in photocopiers, computers, antilock brakes, microwave ovens, VCRs, cellular telephones, and compact disc players, among other things. The pattern is always the same: prices nose-dive to a fraction of their original level, quality improves dramatically, and pretty soon everyone on the block has one.

There are lessons to be learned from the fax phenomenon.

It is only because some people have discretionary wealth beyond what they need for subsistence that anything new gets built. If there were no wealthy people willing to risk their money to buy new technology while it was still in its infancy, poor people would not eventually be able to buy inexpensive, high-tech goodies with the bugs already ironed out.

It may seem paradoxical — and in today’s atmosphere of rampant egalitarianism, virtually heretical — but a society in which some are free to grow unusually rich is a society in which all are likely to be better off. The economy is not a zero-sum game. The wealth accumulated by one person is not necessarily taken away from somebody else. New wealth can be produced. All can grow richer simultaneously.

In fact, as economist Friedrich Hayek says, “If we all had to wait for better things until they could be provided for all, that day would in many instances never come.” It is only by allowing some people to obtain luxuries sooner than others that it becomes possible for the latter eventually to obtain those luxuries at all.

This principle has important implications. Health care is the only sector of our economy where the fax phenomenon doesn’t seem to be operating. Diagnostic equipment and treatment devices are high-tech and very expensive. But now that the development costs have already been incurred, why aren’t the prices of these things plummeting? Why aren’t CAT scanners and Magnetic Resonance Imagers popping up in small hospitals all over the place? Instead, hospitals are being closed, and there are long waiting lists to use the equipment in the few major centers where it is available.

Could it be that the very feature of our health-care systems which Canadians most often boast about — namely, its equal accessibility to all — is one of the things that is keeping it expensive and inaccessible? If we allowed rich people to pay extra to jump to the head of the queue, or to try experimental treatments, wouldn’t their money eventually result in a shorter queue and better treatment for those still waiting?

Consider the report of the Royal Commission on New Reproductive Technology. In it, the National Action Committee on the Status of Women argued that technologies such as in vitro fertilization shouldn’t be allowed because poor women couldn’t afford them.

Well, photocopiers and fax machines are a form of “reproductive technology,” too. Just imagine what your office would be like today if we had convened a royal commission thirty years ago to decide what should be done about the reproduction of documents.

Someone would have objected that only the rich would ever be able to afford photocopiers or fax machines. The government would undoubtedly have stepped in to regulate things. It would have insisted that the price be kept down to the level where everyone could afford a copier or fax. At that price, no prototypes could have been built. Entrepreneurs and inventors would have looked for better ways to invest their money and energy. There would have been no incentive to develop the next generation of machines. We’d all still be using carbon paper and mimeograph machines and sending our messages by snail mail or courier.

Think about it the next time you hear some politician say that the rich aren’t paying their fair share. Think about it the next time you use your fax machine or photocopier.

A version of this article first appeared in The Canadian Lawyer .

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    Ms. Selick is a lawyer in private practice in Belleview, Ontario, Canada, and a freelance writer.