Despite intemperate outbursts at each other, parliament and the regulator finally seem intent on price regulation in the telecoms sector, trotting out the timeworn political tactic of blaming private profiteers for failing to bow to “moral suasion”. Of course, anyone who thinks that “moral suasion” works should get some basic lessons in economics.

The only morality in economics is that individuals should be free to engage in voluntary transactions. Only such transactions profit both parties – otherwise they wouldn’t have entered into them. This mechanism regulates what is produced, its price, and its quality, in order to best meet consumer needs with limited resources. This is what promotes general prosperity and economic progress. So why does this not happen in telecoms?