In addition to struggling through Amartya Sen’s The Argumentative Indian, I’m also reading Lawrence Lessig’s Free Culture. I first encountered Lessig in an international political economy class in college. This was before I was blogging and before Lessig became a minor deity for half the Internet. His book The Future of Ideas was an assigned class reading. A great book, but definitely not what I was expecting from a class on international economics. (Same class, by the way, where I examined the intellectual property of a patented fart catcher. No wonder all my TA’s hated me.)
So why am I reading Free Culture? No, not because I’m unsure about where I stand on issues of copyright and intellectual property – Lessig has had my heart and mind on those issues for many moons now. In a way, me reading another book by Lessig is as silly as if a conservative like HP were to only read conservative blogs and books … oh, wait a minute …
No, I’m reading Free Culture because Lessig is a great storyteller and has buckets of interesting anecdotes. In this book most of them revolve around the lone inventor who comes up with a superior technology but is pushed back by the powers that be. (Unlike the movies, the inventor doesn’t succeed, he commits suicide.)
So it all fit together too nicely when yesterday morning I read an article in Bangladesh’s Daily Star with the headline “Mobile banking rattles banks.”
“Banks, the traditional leader in payment systems, see mobile banking as a new threat if private telecom operators are allowed to use their outlets for money transfer without law,” writes journalist Sajjadur Rahman. I don’t know what he means by “without law”, but I do know what’s behind this quote by a government official: “We won’t let anything, which hurts the banking industry, happen.”
It is a classic example of powerful lobbyists delaying a new technology to protect their industry interests. Mobile banking allows any mobile phone customer to deposit money into his or her phone account at any mobile phone outlet (which are everywhere in countries like Bangladesh) and transfer that money to any other mobile phone user. M-PESA in Kenya has shown how this can bring basic banking services to millions of rural residents who would otherwise never open a traditional bank account.
Mahmud Sattar, president of the Association of Banks of Bangladesh, offered this line to the Daily Star: “We have given our opinions at the meeting and told the central bank that banks have no objection to using modern technology as a tool of expanding delivery channels.” The problem is that banks aren’t in the position to introduce mobile banking whereas phone companies are. If mobile banking services are not introduced, it is the rural poor who are denied the services.
Just ten days ago Mark Pickens wrote an article at CGAP, which says that traditional banks in Kenya are irked that Safaricom is able to operate its M-PESA mobile banking service with so few regulations in place. With 2.7 million clients, it may be that M-PESA became too successful too fast and, having learned their lessons, banks in other developing countries won’t allow mobile phone companies to dig into such a large market share.