Now That’s What I Call Music!

Steven Pinker famously called it auditory cheesecake. It has been used as therapy for patients, but also as a form of torture. It can move us with its sublime beauty, but it can also whip us into a killing frenzy. The production and consumption of it is a multi-million pound industry. And writing about it is said to be like dancing about architecture. I am referring to music. Humans have been making music for more than 30,000 years. Its presence is so ubiquitous that we take it for granted.

What are the origins of music? We may well never know the answer; it is a subject full of speculation. This question came to the fore in the second half of the 19th century. Charles Darwin was one of those analysing its evolutionary significance He believed that music was important for sexual selection. Geoffrey Miller, an evolutionary psychologist. takes a similar line, arguing that it, like the plumage of a peacock, serves to demonstrate fitness to mate.  An alternative hypothesis for music’s emergence, put forward by Robin Dunbar, another evolutionary psychologist. is that in our evolutionary past it helped foment social bonding of groups. We can see this function in the national anthem or football chants. The final hypothesis that I am going to look at sees music as a biological accident.  Music did not lead to language; language led to music, in what has turned out to be a glorious accident. A brain which transforms sound into meaning goes into overdrive when it hears tone, melody and rhythm. An article in The Economist put it like this:

Singing is auditory masturbation to satisfy this craving. Playing musical instruments is auditory pornography. Both sate an appetite that is there beyond its strict biological need.

Music is not located in one part of the brain, but in many different areas. According to the famous British neurologist Oliver Sacks many of the musical parts of the brain are close to where memory and emotion are located. And so music tends to embed itself in memory and to evoke emotions with an immediacy greater than any other stimulus except perhaps smells. Moreover, playing music changes the brain. When looking at a brain scan you can tell that it is the brain of a musician because certain parts of the brain may become enlarged in response to music. This has nothing to do with the so-called Mozart Effect, which became a fad a few years ago, despite the fact that there is little evidence to justify it. It’s a seductive idea. But we should listen to Mozart’s music because of its beauty. That is surely enough.

If you are interested in the neurological aspects of music then Oliver Sacks’s Musicophilia: Tales of Music and the Brain is the book for you. The book features a number of case studies. One of the most mysterious is that of Tony Cicoria, an orthopaedic surgeon.

Cicoria was in a phone booth during a lightning storm, and his head was struck by lightning. He had a cardiac arrest and his brain got no oxygen; he was, in effect, dead for 30 seconds. He would soon recover his memory, but he then developed a sudden insatiable passion for listening to and playing the piano. His head was flooded with music that seemed to have come from nowhere – before the incident he had had no musical inclinations. Now he wanted to play and even compose. He didn’t give up his day job, but he hired a piano teacher and learned to transcribe the music that was going through his head. He has now become an accomplished musician who has given recitals in New York. He is according to Wikipedia, currently working on a number of pieces including a symphony based on Brahms’ Variation, op. 9, and a concerto. And you can buy his Fantasia The Lightning Sonata, Op. 1: II from Amazon.com. This is a fascinating story but I’m not sure it tells us anything about music and the brain.

Music can mean very different things in different times and places. In the West it has now become linked to expertise. Music is somebody standing up on stage performing for others. In traditional societies music pervades everything. That should remind us that music doesn’t necessarily have to be elitist. However, in recent years the amateur has made a comeback with the emergence of karaoke YouTube and talent shows. I have an ambivalent attitude towards karaoke. Whenever I think of it John Entwhistle’s comment about heavy metal comes to mind:

“I’m only interested in heavy metal when it’s me playing it. I suppose it’s a bit like smelling your own farts.”

The ultimate version of Karaoke are all these talent shows that have proliferated in the last few years. Marina Hyde writes about Simon Cowell and his karaoke-industrial complex. Cowell apparently has a net worth of: £225 Million ($364m). In Ben Elton’s satire of The X-Factor/Pop Idol style reality TV shows, Chart Throb, the producers divide the successful into three categories – Clingers, Blingers and Mingers:

Clingers: these are the desperate ones. They have just enough talent to be utterly self-deluded . . . actually, sometimes they manage to be self-deluded without having any talent at all, which is really good telly. They have to cry and plead and beg. God gave them their dream, you see. It’s that important. They are normally women but they can be male. Middle-aged guys who just want to give their kids a better life than they’ve had. Club singers who’ve done their time and paid their dues and want one last shot at the dream.

Blingers: these are the extroverts, the show-offs. The type of weirdly self-confident lunatics whose unshakeable faith in their own powers to fascinate actually makes them sort of fascinating, in a kamikaze kind of a way. They say things like Hey, what’s wrong with being a little crazy? They strike poses. They flirt. They think they’re sexy. Women Blingers tend to be plumpers but they’re comfy being curvy and invariably turn up half naked.

Mingers: these are the real entertainment. They are the lifeblood of Chart Throb, the most essential element. Without the Mingers Chart Throb would be nothing. They are the true casualties, the saddos, the uglies, the comically short-sighted, the cleft-palated, the misshapen, the obese, the educationally challenged, the emotionally stunted and the spotty nerds – the most vulnerable and inadequate members of society.

I have managed to avoid watching these programmes, but Elton’s cynical take does seem to have a ring of truth to it. I also refuse to watch Eurovision. When the Americans use music in this way, human rights NGOs denounce it as torture, but millions of people voluntarily sit down to watch it every year. I just don’t get it

Technology has played and will continue to play a massive role in music. Recording technology enabled talented individuals to leverage their talent. Records, CDs, radio and television made it possible for an artist to perform for millions. This allowed the elite musicians to become fantastically rich. But then technology turned on the industry that it had made. Now it is possible to pirate copies of any artist. This has had unintended consequences. Bands have to do more live concerts because this experience is the one thing you can’t download – yet. The problem is that music is now seen as something you get for free – once people get used to not paying, it’s going to be very difficult to get them to pay even a small amount.

What is the effect of all this piracy? I simply don’t trust those lobbying for the Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) bills in Congress. They claim that online piracy costs theU.S.economy between $200 and $250 billion per year, and is responsible for the loss of 750,000 American jobs. These numbers are horrific. $250 billion per year would be almost $800 for every man, woman, and child in the USA. 750,000 jobs is twice the number of those employed in the entire motion picture industry in 2010. It is impossible to know the real number. There are certainly a lot of people who download music without paying. In some cases, piracy does take away a legitimate sale. But just because people download a song for free doesn’t mean they would be willing to pay for the same song. This is especially true if the consumer lives in a relatively poor country, like China. These cannot really be considered lost sales. And while jobs may be lost in the music industry, they will probably be created in another sector. Money that a pirate doesn’t spend on songs is likely to be spent on something else. This is a counterfactual world. We need to imagine what would happen if there were no piracy. It should come as no surprise that those most affected will tend to come up with the direst possible predictions.

So concludes my brief survey of music. I would continue but all this talk of music has put me in the mood for a bit of karaoke. I can’t decide between Sexual Healing or Fly Me to the Moon. Don’t worry I won’t be uploading anything to Facebook or YouTube. I firmly believe that my flatulence and onanism should remain behind closed doors.

Yes! Yes! Yes! Yes! How the Victorians gave us the vibrator

The Manipulator

The Victorians were a pretty resourceful bunch – postage stamps flushing public toilets, telephones and the world’s first underground railway were all inventions of Victorian Britain. However there is another side to them; Victorian values is a byword for repressive sexual mores. If ever we want to feel superior about ourselves, we can always have a good laugh at the expense of those prudish Victorians. We all know that they used to cover table legs because they suggested human anatomy. Therefore it was quite a surprise to discover that the prim Victorians invented the electric vibrator. Regular readers of my blog may have noticed my unhealthy obsession with sex toys. I have already posted about the notorious 17^th century libertine John Wilmot, Earl of Rochester and his classic poem, Signior Dildo. Then I did a piece on sex robots. This week I will be looking at vibrators and their rather unlikely history. If you want to know about the history of vibrators, then the leading authority is Rachel Maines, author of The Technology of Orgasm. She is my kind of historian. Don’t get me wrong – I am interested in traditional history. But I do like this kind of quirky, offbeat stuff.Maines, first got into this subject while she was researching the history of needlework. Perusing a 1906 needlepoint magazine, she was shocked to see an advertisement for a vibrator. When she realized this was virgin territory for academics she decided to write a scholarly history of the device.

How did the Victorian end up inventing the vibrator? Victorian England was awash with hysterical women. They were seen as naturally frail and at the mercy of their reproductive systems. In 1859 one physician claimed that a quarter of all women suffered from hysteria. This was a good old-fashioned health scare. I need to stop here and explain the meaning and origins of the word hysteria. There are two standard definitions:

1. Behaviour exhibiting excessive or uncontrollable emotion, such as fear or panic.

2. A mental disorder characterized by emotional excitability and sometimes by amnesia or a physical deficit, such as paralysis, or a sensory deficit, without an organic cause.

Its etymology is fascinating. For more than two millennia of European history until the late nineteenth century hysteria referred to a medical condition thought to be confined to women and caused by disturbances of the uterus. Thus the words hysterical and hysterectomy have a common etymological origin, the Greek word for uterus.

Hippocrates the father of western medicine, believed that there were women whose uteri had become too light and dry from not enough sexual intercourse. As a result the uterus would wander upward, compressing the heart, lungs, and diaphragm. These travels could have different consequences depending on where the roving uterus chose to lodge itself. But if the nomadic organ ultimately ended up next to the brain, it would cause hysteria. According to the 2^nd century anatomist Galen, hysteria was caused by the retention of female semen, which could get into the blood and corrupt it. The normal treatment in these days, and in the Middle Ages and renaissance too, was a pelvic massage.

So we come to Victorian England. Such was the demand for the treatment doctors just couldn’t cope. It appears that male doctors did not really enjoy providing pelvic massage treatment. A very time-consuming task, it could take them up to an hour to bring the treatment to a satisfactory conclusion. Many of the doctors found themselves suffering from fatigued wrists and hands.Mainesalso claims that most of them did not even realise that the climax of the treatment they were offering was an orgasm.

These struggling doctors were about to get a helping hand. The inventor would be a doctor himself, Joseph Mortimer Granville. His electromechanical vibrator was thus invented as a labour saving device. “The Manipulator”, a steam-powered vibrator, had been invented in 1869 by another doctor, the American George Taylor. It does sound rather cumbersome – the patient-interface component was about the size of a dining room table and the steam engine that provided the power was located in a separate room from the patient. On the other hand, Dr. Granville’s electromechanical vibrator was portable, although it had a wet cell battery that weighed about 18 kilos. Nevertheless, these early vibrators reduced the time it took to achieve paroxysm in female patients to around five minutes. Now that’s what I call a game-changer. There was a massive buzz in London and female patients were queuing up to be treated by Doctor Granville.

But this was the start of the process. This is the genius of capitalism. With gradual incremental improvements what once took up a whole room became more compact, easier to use, cheaper and available to more and more people. I can see certain parallels with the development of computers. From the late 1800s to the 1920s a revolution took place as the vibrator migrated out of the doctors’ surgeries and into homes. Of course doctors opposed this move, but fortunately they were unable to stem the tide. The vibrator was in fact the fifth domestic appliance to be electrified, after the sewing machine, fan, tea kettle, and toaster. But it came some ten years before the vacuum cleaner and the electric iron. The home versions soon became extremely popular and appeared in magazines and catalogues. They were advertised as benefiting health, beauty and general wellbeing. In fact in 1909 Good Housekeeping magazine road tested a number of vibrators giving them a glowing report. By 1917 there were more vibrators in American homes than toasters.

The appearance of vibrators in 1920s blue movies blew away the device’s social camouflage. Their sexual connotations could no longer be ignored and vibrators went underground for a few decades. It was the sexual revolution of the 1960s that brought them back to the fore. Women wanted to take their pleasure into their own hands. In 1968 Jon H. Tavel obtained a patent for the “Cordless Electric Vibrator for Use on the Human Body” and the modern personal vibrator was born. Since the 1980s, vibrators have become more visible in mainstream public culture. Sex and the City captured the turn-of-the century zeitgeist. Research in America in 2009 indicated  that about 53% of women and about 46% of men in the United States between the ages 18 to 60 had used a vibrator. Unless you happen to live in Alabama,Georgia and Texas, where state legislatures have banned their sale, vibrators are now widely available. The ban in these states reflects the morality of some conservative Christians who believe that the use of vibrators is immoral and prohibited by the Bible.  Dan Ireland, a Baptist preacher, has been an outspoken critic who has sought to ban them on religious and ethical grounds. According to Ireland there is just no moral way to use them:

“Sometimes you have to protect the public against themselves….These devices should be outlawed because they are conducive to promiscuity, because they promote loose morals and because they entice improper and potentially deadly behaviours”

A landmark ruling by the 11th Circuit Court of Appeals in 2008 overturned the Texas ban and the legal provisions in George are rather vague. To all intents and purposes Alabama is now the onlyU.S.jurisdiction where such toys are illegal. Alabamans who sell sex toys, even in an adult context, face up to a year in prison and a $10,000 fine. Repeat offenders risk ten years in jail.

We have come full circle. We started off with Victorian values and we have finished talking about Alabama, a state that wants to go back to that kind of morality. Anyway, I think the image of the strait-laced Victorians is too much of a caricature. Be that as it may, we do live in a very different world. Pornography has gone mainstream. While I certainly wouldn’t want to go back to Victorian morality, perhaps now everything is too in your face. However, I do want to salute Joseph Mortimer Granville, a great Victorian, whose invention has brought pleasure to millions.

Indistinguishable from magic – 3-D Printing and the third industrial revolution

Arthur C Clarke once observed that “any sufficiently advanced technology is indistinguishable from magic.” This quote surely applies to 3-D printing, which I first became aware of when I saw the video above last year. In fact, engineers and designers have been using 3D printers for more than three decades. Only now though are they beginning to filter into public consciousness. There is the same kind of buzz around 3-D printing now that there was around personal computers in the late 1970s. You have the geek hobbyists, but a lot of companies can also see the huge potential of this emerging technology. Could we be on the cusp of a third industrial revolution?

A 3-D printer is a machine that can turn a blueprint into a physical object. It is a bit of a misnomer as it’s not what you or I would understand as a printer. Initially, 3-D printing was known as rapid prototyping, as it its main use was to quickly fabricate conceptual models of new products. For example an architect could design a new building on a computer and print out a 3D model to show a client. But now these amazing devices are being used to produce real things. Additive manufacturing was its new name. Traditional manufacturing is subtractive – you take what you want from a larger piece of material. Sometimes an aircraft manufacturer will throw away 90% of the titanium they were using. But in additive manufacturing you build the object up one layer at a time. However additive manufacturing is not a name to capture the public’s imagination so it is now known as 3-D printing. It may not be the most accurate name, but I think they should stick with this one.

How does it work? First you need to create a 3-D model using computer-aided design (CAD) software. Alternatively, a 3D scanner can create a CAD design by scanning an object. Another program then “slices” the model into two-dimensional representations and instructs the printer to lay down an exact replica. You need to prepare the machine checking that it has all the polymers, binders and other consumables that the printer requires. Then you let the machine do its stuff. It builds by adding very thin layers one by one. Once it has been removed, the object may need some post processing such as brushing off any remaining powder. And then you have a 3-D object ready to be used.

Someone looking at the internet 20 years ago would probably not have foreseen Facebook, Netflix, the effects on the music and newspaper industries and the other disruption that it has caused. What can we expect from 3-D printing? It has been used to manufacture customised, fully functional prosthetic limbs and plastic and metal parts for cars and planes. One example that illustrates their potential is dental crowns. With 3-D printing they can be tailored for an individual patient. One machine can produce 450 in one day; traditional craft producers struggle to turn out a dozen a day. EOS, one of the leading companies in the e-Manufacturing sector, makes everything from cranial implants to shoes. And there is even a Chocolate 3-D Printer, which allows confectionary lovers to produce their own custom-made 3D creations. At a price of £2,500, I don’ think I’ll be rushing out to buy one.

All this new technology is going to change the way we make things. Until now manufacturing has been dominated by economies of scale. Assembly lines and supply chains can be reduced or eliminated for many products. Some de-globalisation may begin to take place, with production coming closer to the consumer. A manufacturing facility will  be able to print a huge range of types of products without needing to retool and each printing could be customized by tweaking the computer model at no additional cost. Products can be printed on demand without the need to maintain large inventories of new products and spare parts. This customisation may seem a bit frivolous at times, but when it comes to the human body, being able to make personalised implants could help save lives.

It doesn’t mean that mass production will disappear because some things are best made in large production runs. But the factories of the future will probably have 3D printers working alongside the more traditional milling machines, presses and foundries that dominate manufacturing now.

A lot of these production innovations have important environmental implications. In general there should be a more efficient use of resources with an important reduction in waste. Not having to ship goods half way across the world will substantially reduce manufacturing’s carbon footprint. 3-D printing could help build greener aircraft. Lightness is crucial for making aircraft more ecological – a reduction of just 1kg in the weight of an airliner will save around $3,000-worth of fuel a year cutting carbon-dioxide emissions. At the moment the size of printable parts is limited by the size of 3D printers, but bigger machine will be possible, and could be used to build airplane wings.

There are some things which may be seen as downsides. Competitive advantages will be more ephemeral than they have ever been. 3-D printing raises the spectre of mass piracy of objects. Battles over intellectual property are set to become even more intense. At the beginning of this year The Pirate Bay launched a new category on, their site. As well as music, films and software they now offer “physibles” – digital objects that can then be made on a 3-D printer. And what about the effect on manual labour? Will people be able to scan objects using a 3D scanner and share them online? In a recent Observer piece John Naughton the paper’s technology journalist expressed fears about job losses. While I think there will undoubtedly be disruption, I think that he is falling for the Luddite fallacy.

3-D printing is just part of a broader digital revolution in manufacturing with more new processes, sophisticated robots and collaborative manufacturing services available online. This is what we mean by a third industrial revolution. The first one took place in Britain in the late 18th century with the mechanisation of the textile industry. Henry Ford and his assembly line heralded the second revolution and the rise of mass production. There is obviously some degree of hype about this third industrial revolution, but I  disagree with the commenter on the Guardian website who argued  that it would only be useful for making custom dildos and bootleg Disney key fobs. 3-D printing is going to transform the landscape of manufacturing. Competition and cooperation from around the world promise many exciting new developments. This is what Matt Ridley memorably described as “ideas having sex.” There is a lot of doom and gloom around at the moment. Things do not look too good. But it is this type of human innovation that shows us how to create a brighter future.

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*According to one commenter on YouTube the wrench in the video would actually cost about $250 just in materials.

If you are interested in 3-D printing, there is also  a talk at TED,com by Lisa Hourani.

To boldly go: some thoughts on space travel

We have been observing the stars since before recorded history. In 1865 Jules Verne published From the Earth to the Moon a tale of a lunar expedition. In Verne’s novel the Baltimore Gun Club decide to build an enormous cannon, large enough to fire a projectile at the moon. This appeared to an extravagant flight of fancy by the French author. But with the development of large and relatively efficient rockets during the first half of the 20th century space exploration became a reality. But before humans could go into space we would require the help of other animals.

Contrary to popular belief the first animal in space was not a dog, but a fruit fly. The Americans define space as beginning at an altitude of 80 km. The diminutive astronauts were loaded on to an American V2 rocket along with some corn seeds, and blasted into space in July 1946. They were used to test the effects of exposure to radiation at high altitudes. Albert II, the first monkey in space, went up in 1949. he was known as Albert II because there had been an Albert I, who had suffocated to death in 1948 before reaching the 100 km barrier. Albert II also had an unfortunate end when the parachute on his capsule failed on landing. In 1951 Albert VI managed to get back from space, only to die two hours later. There was one exception to all this death. Miss Baker, a squirrel monkey, lived for another 25 years after she spent 16 minutes in space 1959 mission. Baker died of kidney failure after breaking the record for oldest living squirrel monkey. Her gravestone frequently has one or more bananas on top.

The first animal in orbit was indeed a dog, Laika, who was sent up by the Russians in 1957. She died of heat stress during the flight. And a further ten dogs were launched into space before Yuri Gagarin, made it up there in 1961. Six of the dogs survived. The Russians also sent the first animal into deep space in 1968 – a tortoise. Guinea pigs, frogs, rats, cats, scorpions, wasps, worms, beetles, cockroaches and spiders have all been into space. In 1973 the mummichog became the first fish in space when carried on Skylab 3 to use for biological. The first Japanese animals in space were ten newts in 1985.

The Soviet launch of a Sputnik in October 1957 was a traumatic moment for the United States. The satellite, which was the size of a basketball, orbited the Earth nearly 1,550 times. It was a stunning propaganda victory for the Soviet Union. President Eisenhower immediately declared the “Sputnik crisis” – there were important military implications – a country able to launch a satellite into space could also effectively deliver nuclear missiles to American soil. In 1958 The National Aeronautics and Space Act created NASA. But the effects were more far-reaching. There was a massive boost given to science in general.

The Space Race was won by the Americans in 1969 with the first moon landing. Of course you could argue that the Russians had already won after Gagarin went up. The Americans simply invented a new race. It was President Kennedy who set the challenge of reaching the moon by the end of the sixties. The Americans were spending 5% of GDP on the space program. 400,000 people worked on the Apollo project for nearly ten years, a total of four million man hours. Kennedy would not see his dreams fulfilled, but the Americans were able to set foot on the moon just before the decade ended. Between July 1969 and December 1972 they would land on the moon six times and twelve astronauts would walk on the moon. And then it all stopped.

The next challenge appears to be Mars. But any manned mission would present serious difficulties. The journey would be long and extremely boring. The astronauts would be living in cramped conditions with no privacy. And the food would be awful too. It would take six months each way. They would then have between 30 days and a year and a half on the red planet. If the astronauts stayed the latter time it would be 1,000 days in Space twice the previous record.

Space can have very negative effects on humans Astronauts spend most of the first 24-48 hours feeling or being sick. You remove gravity, which has been a constant as life on this planet has evolved over billions of years.  Bones and muscles waste. The heart atrophies. You come back less than you were; it has been estimated that on a Mars mission, astronauts would lose one-third to one-half of their bone mass. There are problems of hand-eye coordination.

There are also the psychological effects of being cooped up in confined spaces for extended periods of time. Last year saw the finalisation of a record-breaking simulated mission to Mars. Six male volunteers, from Russia, Italy, France and China, travelled 100m kilometres without moving a centimetre. The experiment, known as Mars500, had the six brave guinea pigs living in a “spacecraft” for 520 days. The simulation took place at the Institute of Biomedical Problems in Moscow. The crew managed to survive without killing each other, even if nerves were a bit frayed at times. It was a challenge for the men: one of them claimed that what he most missed was the randomness of life.

What does the future hold for space travel? A manned Mars mission seems decades away. There is much less optimism around. Space exploration now represents just 0.5% of American GDP, although the U.S.still spends more than the rest of the world put together. There are still some possibilities. Perhaps we could send robots. Other nations, especially China, will surely play an increasing role. Given the complicated economic situation and the prohibitive costs, greater international cooperation could be another solution. Finally I imagine there will be more commercial activity in space. However I do rather miss the visionary rhetoric of the last century. I will finish with just such an inspiring quote.  It comes from Pale Blue Dot: A Vision of the Human Future in Space by Carl Sagan:

Whatever the reason we first mustered the Apollo program, however mired it was in Cold War nationalism and the instruments of death, the inescapable recognition of the unity and fragility of the Earth is its clear and luminous dividend, the unexpected final gift of Apollo. What began in deadly competition has helped us to see that global cooperation is the essential precondition for our survival. Travel is broadening. It’s time to hit the road again.

Return of the tech Wars

There was a time, not long ago, when you could sum up each company quite neatly: Apple made consumer electronics, Google ran a search engine, Amazon was a web store, and Facebook was a social network. How quaint that assessment seems today. The Great Tech War Of 2012, Farhad Manjoo in Fast Company Magazine

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Amazon, Apple Facebook and Google: these four companies, dubbed “the gang of four” by Eric Schmidt, the executive chairman of Google, will be fighting it out for control of what has been called the post-PC era – a brave new world characterised by the emergence of smartphones, tablets, and other small, mobile, easy-to-use computers. There is potentially a lot of money to be made as these devices encourage and facilitate consumption, in just about every form

We need to put the power of the four into some kind of context. I was looking at the Fortune 500 and Apple was the first of the four to appear in the list, but at a modest 35. Even that old dinosaur IBM comes in at 18. Few of us could name the CEOs of the companies at the top of the list: Michael T. Duke (Wal-Mart), Rex W. Tillerson (Exxon Mobil), and Brian T. Moynihan (Bank of America Corp.) are hardly household names. However, something about Mark Zuckerberg, Jeff Bezos, Larry Page, and the late Steve Jobs has captured the public’s imagination.

Now we are told that these four companies will be at war with each other. Some of us are old enough to remember another tech war – the struggle between Sinclair and Acorn in the early eighties. Little did we know in those heady days how irrelevant that fight would be. Then in the eighties IBM Microsoft and Apple slugged it out with Microsoft emerging as the undisputed victor. During the late 1990s we had the browser wars as Microsoft’s Internet Explorer took over from Netscape’s Navigator as the web’s dominant browser. These battles have continued as Explorer has to deal with a series of aggressive usurpers such as Google Chrome, Mozilla Firefox and Apple’s Safari. And Apple has turned the tables on         Microsoft with the iMac, the iPod, the iPhone and the iPad.

So the tech wars between these four Titans are nothing new. This is a battle of products, but is also a battle of business models. Each company has its own way of making money. As the quote at the beginning of the article states, the four tended to specialise. But now they’re branching out into all kinds of new areas. This is going to bring them into conflict with each other, and a by-product of their rivalries will be to cause disruption in many sectors of the economy. As a consumer it will be fascinating to see how this all plays out.

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What I am going to do is look at the situation of the four companies:

Google

Google’s core business model is to provide search and advertising services. The genius of Google is their extraordinary ability to organise the information on the Internet. Their physical network has always been extremely fast and they offer consumers incredible value without charging a penny. The advertisers are their source of revenue. And the company has an unparalleled facility for monetising Internet traffic through a highly efficient targeted advertising model. They control a whopping 46% of digital advertising. Every decision Google takes has to be understood in terms of advertising; they are constantly on the lookout for new applications that can drive traffic through their search engine. Most of what Google offers is free. Among other things they have Gmail, Maps, YouTube, a bookstore, Google+ (a social networking site), a new music service and Android, a highly successful mobile phone operating system. Android gives us a clear insight into Google’s modus operandi. They don’t actually earn any money giving away their smartphone operating system to different phone manufacturers. Instead they make money by showing you ads every time you search on Google or look at your email on your Android phone. The more people use Android phones, the more advertising revenue they generate. They are now going head-to-head with Apple on smartphones and tablets.

But they do have other interests. They want to get into the cloud and they are working on a driverless car. In August this year one of these autonomous vehicles was involved in a collision – the project’s first crash.

Amazon

Amazon’s propensity for losing money in their early years led to them being called amazon.org. They wanted to build up the business and the profits would eventually come. Amazon nearly doubled in size from 2008 to 2010, when it reached $34 billion in annual revenue. Analysts expect it to reach $100 billion in annual revenue by 2015, faster than any company ever. I remember hearing about the Kindle when it first came out. It sounded exciting, but I had no idea it would be so successful. Now Amazon has a new product, the Kindle Fire, which is not just a reader, but a tablet. It is clearly a potential rival for the iPad. The Kindle Fire is smaller than the iPad and has different specifications but there is a huge price difference. Compared to the cheapest iPad which costs $500, the Fire is a bargain at $200. The device, which is clearly linked to Amazon’s Web store, allows you to get books, movies and TV programmes downloaded directly on to your machine. So Amazon’s rationale is not about making money from sales of the device. They appear to be selling it for no profit at all. But they want you to use this device to buy a lot of stuff from their store.

In a ranking produced by Forbes Amazon was ranked as more innovative than both Google and Apple. They are particularly well positioned in cloud computing, which is surely one of the key areas in the future.

Facebook

Facebook’s aspiration is to be an alternative way to organize the Web, a platform for consumers to spend their time online. What drives Zuckerberg’s strategy is the fact that Google’s search engine cannot reach Facebook content. Thus the more time people spend on Facebook, the less time they will be exposed to ads on Google. Until now people have found content by searching. Facebook is out to overturn that model. They want friends to direct other friends to content. Google has recently created a rival social network, Google Plus, but it is so far behind Facebook they need Google Maps to find it.  Facebook is not interested in supplying media products, like Apple or Amazon.com. However, It is teaming up with companies that distribute music, films, information and games. An example of this is their deal with Spotify. They have features that allow you to see what your friends are doing online: Bill Pringle is listening to Mantovani or Norman Fletcher has installed Facebook on his HTC Wildfire. Facebook has been called a directory of human desire and is able to collect valuable data about its users’ habits and desires, which can then be used to sell highly targeted advertising.

Apple

I have already done a post about Apple: I’ll buy almost anything if it’s shiny and made by Apple. In terms of the tech wars the struggle is between Apple and the aforementioned Android operating system. Although the iPhone has lost market it is still hugely profitable given Apple’s huge profit margins. Some estimates say that Apple has half of all the profits made in smartphones. They know how to exploit the global production cycle and the enormous economies of scale. Despite this rosy picture Apple are out to get Google and their Android operating system. For Jobs it’s something very personal:

Our lawsuit is saying, “Google, you fucking ripped off the iPhone, wholesale ripped us off.” Grand theft. I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong. I’m going to destroy Android, because it’s a stolen product. I’m willing to go to thermonuclear war on this. They are scared to death, because they know they are guilty. Outside of Search, Google’s products—Android, Google Docs—are shit.

How will they cope with the loss of Steve Jobs? Tim Cook the new CEO appears to be an excellent organiser, but he doesn’t have the artistry or the monstrous ego of Jobs. He has already been at the helm for long periods during Jobs’s sick leave and the company has been thriving. The long run could prove more complicated. One key relationship will be between Cook and Jonathan Ive, the Senior Vice President of Industrial Design at Apple. Ive was the man behind iMac, iPod, iPhone, and iPad. One area where they would like to put their distinctive stamp on is the TV. An Apple TV could prove a reality soon. However, given past history, will it be possible to watch porn on it?

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The legal issues have got a bit ugly in the last few years. Everyone seems to be suing everyone else over patents. I understand the need to protect intellectual property rights, but I wouldn’t want to see further innovation stifled. And now in an ironic twist of events the government, egged on by the likes of Microsoft, is considering an antitrust suit against Google. I tend to be sceptical of this kind of lawsuit. I agree with economist Don Boudreaux who argues that the motivation behind many of these cases comes from industry players, who use antitrust to throttle more successful competitors and get relief from the rigours of competition.  Many observers have an incredible lack of imagination. They see a market outcome they regard as negative and they project it into eternity. I don’t know about you, but the anti-trust case against Microsoft seems pretty irrelevant given what has happened in the last decade or so.

Who is going to win? I have no idea. There probably won’t just be one winner- I also think other companies have a role to play and I certainly wouldn’t write off Microsoft. We are going to see another bout of creative destruction as these products and models fight it out. As we have seen these companies employ very different models. People do tend to get quite sectarian about these questions. Apple in particular seems to inspire extreme reactions. I have a piece of advice: if you don’t like a device, don’t buy it.

The best tech companies have tended to stay at their peak for a decade at most. Amazon, Apple, Facebook, and Google will be trying to buck this trend. But right now there is probably some Californian geek plotting the downfall of the big four. The sad thing is that if and when rivals emerge it probably won’t be in Europe. Apple, Amazon and Google were al started in garages. It may be an apocryphal story, but apparently it’s illegal to run a business from a garage in Germany.  Still, have no fear in Britain we have Silicon Roundabout. I’m sure the Yanks are quaking in their boots!

Jumpers for goalposts: FIFA at war with technology

Why? Why does a fantastic team need this? Frisk, Stark. Why? Why? Football is equal for everyone. The team that deserves to win should win. If they won by merit we would accept it. Why in a balanced game like tonight did it happen? Why? Why did they leave us with ten men? Why did they turn down four penalties against Chelsea in the semi-final a few years ago? I hope one day I will have an answer. I always try to be honest. I just want to know why. Jose Mourinho on Bacelona and referees

 It could regress further down the technology line and use jumpers for goalposts. At least then the football furniture would be in line with FIFA’s Dark Age thinking, which is rooted in a period when the wheelbarrow was the height of innovation. Kevin Garside

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Last week I did a post about the Luddites and this week’s topic is most definitely connected – the antediluvian FIFA and its attitude to technology. In this aspect football’s world governing body is Luddism incarnate. Indeed Sepp Blatter was seen at Wimbledon this summer with an axe (nothing too high tech for our Sepp), but the authorities managed to stop him before he was able to wreck Hawk-Eye. I wouldn’t want to give the impression that football, a multi-billion dollar industry, has turned its back on technology. The top clubs play in luxurious modern stadia. The players wear cutting edge hi-tech fabrics. Nike and Adidas are constantly developing new and innovative products. Even the humble ball undergoes constant tweaking. And now we are beginning to see the introduction of 3D to the football watching experience. The one area where technology is absent is in refereeing decisions. The sport’s most prestigious tournament the World Cup has a long history refereeing howlers, which come in all shapes and sizes:

Geoff Hurst’s goal against Germany in 1966,

Harold Schumacher’s unpunished assault on Battison in 1982

Diego Maradona’s Hand of God in 1986,

Graham Poll showing three yellow cards to the Croatian player Josip Šimunić in 2006

Frank Lampard’s “goal” against Germany in 2010. 

Most other important sports seem to have little trouble accepting technology. Tennis cricket and rugby have all successfully adopted it. For me the gold standard of refereeing is the NFL. They have seven officials – referee, umpire, head linesman, line judge, field judge, side judge, and back judge. They have embraced the use video technology. Coaches can make three challenges per half. This limit helps avoid frivolous challenges. What’s more teams lose a timeout if their challenge is unsuccessful. The referee goes over to a video booth and has two minutes to either uphold or overturn a decision.  The criteria is that there has to be overwhelming evidence to change the original call. I am well aware that football has a different ethos to the NFL. I don’t think we should lose the dynamic, fast moving character of the game.  I wouldn’t want the two minutes it takes in the NFL, but rugby seems to manage alright. Indeed it has become part of the spectacle.

The body which will decide whether to adopt new technology or not is the IFAB – the International Football Association Board. Perhaps Apple could rebrand it as the iFAB. However the IFAB is as far removed from Jobian innovation as you could possibly imagine. Even its composition is anachronistic; it is made up of 4 FIFA members and four members from each of the United Kingdom’s pioneering football associations—England’s Football Association (The FA), the Scottish Football Association (SFA), the Football Association of Wales (FAW) and Northern Ireland’s Irish Football Association (IFA). To reach a decision at least six votes in favour are required. The only technology that is currently being considered is for the goal line. But FIFA are very demanding – they expect a decision in one second, and with 100% accuracy; you get the impression that they are just looking for pretext to throw it out.

We need to look at the nature of the enterprise. Refereeing is exceptionally complicated. Take the offside rule. It is just impossible for a referee to be able to see the exact moment a defender hits a pass while simultaneously looking at the position of the striker who receives it. Our eyes cannot be in two places at the same time. And the way modern footballers dive around, it is a nightmare for any match official to know if we are dealing with a serious foul or a bit of thespian interpretation.

FIFA like to create a false dichotomy between humans and machines, but technology could be the referee’s friend. Jorge Larrionda was the man in charge of the match between England and  Germany in South Africa. After he saw the replay of Frank Lampard’s 39^th minute strike clear having crossed the line, Arrionda was said to be dismayed, gasping “Oh my God!” He played no further no part in the tournament.  Yet he was in no way to blame for what happened. Technology could be godsend for referees.

What we really need is in-depth understanding of where the problems are. Luckily such analysis is available. Tim Long, an English freelance journalist, spent 250 hours analysing 713 incidents from the 380 Premier League games of 2010-11, each of which on their own could have or did lead to a goal. According to Long’s analysis more than 500 of the decisions out of 713 were right, leaving a total of some 200 mistakes. Long produced a revised league table. Without the refereeing blunders Arsenal, who finished fourth with 68 points, would have had 72 points and finished second to Manchester United.ManchesterCity, on the other hand, were “gifted” nine points and would have finished fourth. In the bottom half of the table the effects were more dramatic; it would have been Wigan and Wolves who joined West Ham in the Championship, instead of Blackpool and Birmingham.

I love counterfactual history, but this kind of table uses a seriously flawed methodology. It is true that you can see which teams have suffered the worst refereeing decisions particularly the smaller clubs. But if one decision is changed then this will affect how both teams play the game from that moment on. You can’t just do this simplistic kind of accounting. However there is a lot you can learn from Long’s research Of the 713 incidents identified by Long just 20 involved goal line incidents, of which just four were clearly wrong. I do think that these cases have been given too much publicity. Compare this with the other key incidents identified by Long:

361 involved penalties given or not given.

152 involved goals given or not given as a result of offside calls

129 were for sending offs.

713 incidents works out at just two per game. Of these 713 key decisions 432 occurred when there was already a natural stoppage – events such as bookings, disallowed goals and penalties often entail interruptions anyway. All this undermines the FIFA claim that there would be constant interruptions. And we all know that whenever there is a controversial decision, the referee is surrounded by both teams, and it often takes him a long time to establish order.

Long’s statistics inform my vision of what decisions should be reviewed. I am in favour of goal line technology, but we need to apply technical solutions in more areas. Penalties would be a good place to start. It would be great if we could do offsides as well, but I’m not sure about the technology available. The third area would be red cards. When you reduce a team to ten men, you want to be pretty sure that you have made the right call. The red card for Pepe in the Champions’ League semi-final last season was a controversial decision. I know that the Portuguese defender is a red card waiting to happen and the challenge on Dani Alves was unnecessary in that area of the pitch but I think the red was extremely harsh. This type of decision should always be reviewed because it can change the course of a match.

What can be achieved? Perfection is not an option. There is no way that we would be able to get rid of all controversy in football. The FIFA attitude seems to be that unless you can achieve 100% accuracy in one second, you may as well keep the present system. What a perverse argument! Surely life is about incremental improvements. What I would like to do is eliminate the most egregious errors – the ones that are just so obvious. I am sure there would be problems but these changes could be rolled out gradually. Maybe some of them would be too time-consuming or would not give the desired results. But at least give them a chance.

I have been highly critical of the FIFA in this article, but one thing I will say is that they have done a fantastic job in promoting football around the globe. I am sure that football will maintain its popularity with or without the changes I propose. But why not do the things better when we now have the tools available?

The Luddite fallacy

2011 marks the 200th anniversary of the Luddite movement. 2011 is a fitting year to commemorate them as it has also been a year of popular protests with the “indignados” in Madrid, the recent attempts to occupy Wall Street and the St Paul’s protest camp in London Today’s protesters could learn a thing or two from the Luddites; . They certainly knew how to create a lasting brand. Will we be talking about the “Indignants” in 2211? Something about Luddites has captured the public imagination for the last two centuries.

Ned Ludd, the man who gave his name to the movement was a, a sort of Robin Hood-like figure among the protesters. There had been a young apprentice called Ludd or Ludham from Anstey near Leicester. Admonished by a superior for shoddy workmanship, he took his anger out on two frames for knitting hosiery, wrecking them completely. Word got around. After that whenever a machine was destroyed someone would say, “Ludd must have been here.” This is how a mythical leader was born and he became a source of inspiration for the protesters.

The Luddites emerged at the time of the Napoleonic Wars. The industrial revolution was in full swing. It should be pointed out that they were not opposed to technology per se; many were highly skilled machine operators in the textile industry. What they objected to was the automated looms that could be operated by cheap, unskilled labour, with the loss of jobs for many skilled textile workers. On March 11,1811, in Nottingham, a demonstration of textile workers demanding more work and better wages was broken up by the army. That night the disgruntled workers went to a nearby village and smashed up textile machinery. The movement spread rapidly throughout England in 1811 and 1812 with Yorkshire and Lancashire as two hotbeds of revolt. Mills and factory machinery were the typical targets of these handloom weavers. They publicised their actions in circulars mysteriously signed, “King Ludd.”

For a short time the Luddites created panic in the British establishment and they even clashed in battles with the British Army.  The Luddites would meet at night on the moors surrounding the industrial towns, practising drills and manoeuvres. They were also into cross-dressing. However this seems to have been a way of disguising themselves. They often enjoyed local support, but once the government decided that they posed a serious risk and decided to repress them, their days were numbered. Machine breaking became a capital crime in 1812, legislation which was opposed by Lord Byron, one of the few prominent defenders of the Luddites. In order to suppress the movement mass trials were held resulting in many executions and penal transportations. By around 1816 the Luddites were a spent force.

The Luddites had clearly tapped into a common feeling. The nightmare vision of a world in which technology has eliminated human productive labour has been around since the early years of the Industrial Revolution. Automated production lines, computers and industrial robots have only reinforced this feeling. Each generation believes that the latest technology will be the one that eradicates employment. I tend to be very sceptical of economic populism and contrary to these populist beliefs, there is scant evidence to support the claim that technological development is responsible for rising levels of unemployment in the medium to long term. But these bad ideas keep coming back to haunt us. Whenever there is significant long-term unemployment, machines get the blame.

These fallacies are regularly trotted out in the media. Earlier this year Jesse Jackson Jr. lamented the dangers of the iPad, wondering what would happen to all the jobs associated with paper:

“A few short weeks ago I came to the House floor after having purchased an iPad and said that I happened to believe, Mr. Speaker, that at some point in time this new device, which is now probably responsible for eliminating thousands of American jobs. Now Borders is closing stores because, why do you need to go to Borders anymore? Why do you need to go to Barnes & Noble? Buy an iPad and download your newspaper, download your book, download your magazine,“

And this summer President Obama was on NBC News trying to explain why companies weren’t hiring:

“There are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller, or you go to the airport and you’re using a kiosk instead of checking in at the gate. So all these things have created changes. . . .”

George Bush was rightly criticised for many of the things he said, but I find it shocking that a President who is constantly praised for his stunning intellect could display such wilful economic illiteracy. Actually I’m not shocked at all by politicians spouting this kind of nonsense. Indeed, Obama may well be aware that it is bullshit, but is trying to make an appeal to populism. Either way it’s depressing that this is the man responsible for economic policy in the world’s most powerful economy.

A dynamic economy will see radical changes. This is what Joseph Schumpeter called this process creative destruction, the transformation that accompanies radical innovation. I did a piece about creative destruction in the financial sector in 2008. It has to be said that there has been precious little of this since the onset of the current economic crisis. Creative destruction has been around since we started inventing tools. The printing press was bad news for those who produced manuscripts. This process has been on steroids since the industrial revolution. Agriculture is a prime example. In 1900, nearly forty of every hundred Americans worked in farming to feed a country of ninety million people. A century later, it takes just two out of every hundred workers. There are many more examples:

• Modern office technology has cut the number of secretaries.
• Undergoing LASIK surgery allows consumers to throw their glasses away.
• Digital cameras have forced photo labs to close.

There has been massive destruction of employment. There should be no more than five people working in the whole world! But as economist John Kay has pointed out, in the two hundred years since the Luddites first went around wrecking machinery productivity has increased more than fifty-fold. So we don’t have 98% unemployment; we produce fifty times as much.

We need to see the interconnectedness of all this; these ongoing processes cannot be understood in isolation. Resources no longer needed to feed the nation have been freed to meet new consumer demands. Over the decades, workers no longer required in agriculture moved to the cities, where they became available to produce other goods and services. Economist Walter Williams has a better grasp of economics than Obama and Jackson Jr.:

Certain jobs are destroyed by technology. You’re right, but many more are created. Think about it. If 90 percent of Americans still had been farmers in 1900, where in the world would we have gotten workers to produce all those goods that were not even heard of in 1790, such as telephones, steamships and oil wells? We need not go back that far. If there hadn’t been the kind of labour-saving technical innovation we’ve had since the 1950s – in the auto, construction, telephone industries and many others – where in the world would we have gotten workers to produce things that weren’t heard of in the ’50s, such as desktop computers, cell phones, HDTVs, digital cameras, MRI machines, pharmaceuticals and myriad other goods and services?

Creative destruction actually makes societies wealthier, by putting scarce resources to more productive uses. The savings from higher productivity don’t just go to the evil capitalist owners. They lower costs of doing business. In the short term this may mean higher profits. However, new competition tends to lead to lower prices as firms compete with each other to attract consumers. These consumers benefit from a higher standard of living as they have to work fewer and fewer hours to earn enough money to buy food, shoes or a car. It is technology that brings us a higher standard of living. It isn’t just the rich who get cheaper stuff. And I don’t know about Obama, but I love the convenience of using an ATM whenever I feel like it.

The problem is the time lag. While the disruption of the labour market and the destruction of businesses are immediate and very visible, the benefits from creative destruction are in the long term. As a result, societies there will always be a temptation to try and block the process of creative destruction, implementing policies to resist economic change. These attempts will almost always have a deleterious impact on the economy as inefficient producers, who should have gone out of business, hang around at a high cost to consumers or taxpayers. It prevents the shifting of resources to emerging sectors. The tragedy is that by trying to hold back the tide, you do not avoid pain. The ultimate cost of these misguided policies is stagnation, job losses, bankruptcies and a lower standard of living.

I don’t know what will happen in the future. The Luddites and their intellectual heirs may simply have been premature in their dire predictions. Will job creation match job destruction in perpetuity? With robotics and artificial intelligence set to advance rapidly this century, even many skilled jobs could come under threat. But I believe that jobs are created by what economist Julian Simon called the “ultimate resource” – our natural human resourcefulness and ingenuity. Human wants are insatiable -people always want more of something. This is what will create jobs in the future – jobs that we cannot even conceive of now.

Progress and its discontents

To complement this week’s post about The Luddite fallacy I have a couple of extra bits:

The first is a letter from Don Boudreaux of Café Hayek to the U.S. Representative for California’s 9th congressional district, the Democrat, Barbara Lee:

Dear Ms. Lee:

Fred Barnes reports in the Weekly Standard that you refuse to use computerized checkout lanes at supermarkets (“Boneheaded Economics,” Oct. 24).  As you – who are described on your website as “progressive” – explain, “I refuse to do that.  I know that’s a job or two or three that’s gone.”

Overlooking the fact that you overlook the lower prices on groceries made possible by this labor-saving technology, I’ve some questions for you:

Do you also avoid using computerized (“automatic”) elevators, riding only in those few that still use manual elevator operators?

Do you steer clear of newer automobiles equipped with technologies that enable them to go for 100,000 miles before needing a tune-up?  I’m sure I can find for you, say, a 1972 Chevy Vega that will oblige you to employ countless mechanics.

Do you shun tubeless steel-belted radial tires on your car – you know, the kind that go flat far less often than do old-fashioned tires?  No telling how many tire-repairing jobs have been destroyed by modern technology-infused tires.

Do you and your family refuse flu shots in order to increase your chances of requiring the services of nurses and M.D.s – and, if the economy gets lucky and you and yours get seriously ill, also of hospital orderlies and administrators?  Someone as aware as you are of the full ramifications of your consumption choices surely takes account of the ill effects that flu shots have on the jobs of health-care providers.

You must, indeed, be distressed as you observe the appalling amount of labor-saving technologies in use throughout our economy.  It is, alas, a disturbing trend that has been around for quite some time – since, really, the invention of the spear which destroyed the jobs of some hunters.

The second is an anecdote from Russell Roberts in an article about technology and jobs:

 The story goes that Milton Friedman was once taken to see a massive government project somewhere in Asia. Thousands of workers using shovels were building a canal. Friedman was puzzled. Why weren’t there any excavators or any mechanized earth-moving equipment? A government official explained that using shovels created more jobs. Friedman’s response: “Then why not use spoons instead of shovels?”

 

Roast pigeons in the mouths of comrades‏

We are and always shall be in favour of a centralised economy, and companies will have to conform to the Government’s planning.  Salvador Allende

They (the socialists) have criticized freely enough the economic structure of “free” society, but have consistently neglected to apply to the economics of the disputed socialist state the same caustic acumen, which they have revealed elsewhere, not always with success. Economics, as such, figures all too sparsely in the glamorous pictures painted by the Utopians. They invariably explain how, in the cloud-cuckoo lands of their fancy, roast pigeons will in some way fly into the mouths of the comrades, but they omit to show how this miracle is to take place. Ludwig von Mises, Economic Calculation in the Socialist Commonwealth

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The other day I was listening to a fascinating podcast with Tim Harford.  Harford has a new book out now called Adapt, which deals with the role of failure. In it he tells a story which I had not heard before and I immediately went to check it out. The story was about an unlikely collaboration between Salvador Allende, the democratically elected Marxist leader in Chile and Anthony Stafford Beer, a British theorist, consultant and professor at the Manchester Business School. Project Cybersyn, sought to avoid the pitfalls of the planned economies of Cuba and the Soviet Union by applying cybernetics,  the study of communication, feedback and control mechanisms in complex systems.

Project Cybersyn used a network of 500 Western Union telex machines to rapidly transmit data between the factory floor and the government. It was supposed to be in real time, but in reality each firm could only transmit data once per day. The futuristic operations room, with definite airs of the bridge of the Starship Enterprise, was furnished with seven swivel chairs, as they were deemed best for creativity. These chairs, which were arranged in an inward facing circle, had armrests with buttons which controlled several projection screens, each displaying the data collected from the nationalised enterprises.

Allende was to hold power from 1970-73. The role of the United States’ government and companies in his downfall and substitution is notorious. On the morning of 11 September 1973 Augusto Pinochet launched a coup against the Allende government. By 2 p.m. Allende lay dead, his dream of democratic Marxism vanished as the flames engulfed the presidential palace, La Moneda. Following the coup, the military made a number of attempts to understand how the Cybersyn Project worked. They eventually decided to dismantle the operations room.*

It became one of the many casualties of the Pinochet dictatorship. His dictatorship would last until 1998 and many people would be tortured. Fortunately for Stafford Beer, he was in London on the day of the coup. Afflicted by survivor’s guilt, he ended up abandoning his family and moving to a cottage in rural Wales. He died in 2002 at the age of 76.

How can we judge this ill-fated experiment? I realise that it was carried out under extreme duress, but it does raise some intriguing questions about the role of information in decision-making.Chile’s economy collapsed, due to a number of interrelated factors: the chaos created by Allende’s ambitious programme of nationalisation, strikes that paralysed the country and the ceaseless efforts of theUnited Statesto undermine the regime. Moreover, Chile did not have much computing power. They had a single I.B.M. 360/50 mainframe. We need to put into some kind of perspective. Not only was it far less powerful than an iPhone, it had less storage capacity than most flash drives today.

However, the underlying problem with this kind of central planning may well have nothing to do with computing power.  Perhaps there just aren’t enough molecules in the universe to make a computer capable of mapping the interactions of a country of millions of people who constantly interact with the outside world. Moreover, it would be impossible to know all of the critical information required to make such decisions ex ante. So much of what we learn about the economy is after the fact. The planners had to rely on people in the factory giving the information that you want, but many of these would have their own agendas.

The complex nature of economies has been one of my tropes since I began blogging three years ago. The question needs to be seen within what is known as the Socialist Calculation Debate. On the left were those who believed in market socialism. At the beginning of the last century some socialists began to believe that they could manage the economy scientifically, blending neoclassical economics with social planning. In 1908 Enrico Barone proposed the concept of market socialism. The invisible hand would be replaced by the ministry of planning. Barone advocated the establishment of a planned society in which markets would operate. Then the baton was taken up by Oscar Lange. He believed that the development of high-speed computers would make planning a reality:

“Were I to rewrite my [1936] essay today my task would be much simpler. My answer to Hayek and Robbins would be: So what’s the trouble? Let us put the simultaneous equations on an electronic computer and we shall obtain the solution in less than a second. The market process with its cumbersome atonnements appears old fashioned. Indeed, it may be considered as a computing device of the pre-electronic age.”

Opposing them were the Austrian school, notably Ludwig Von Mises and Friedrich Hayek. The first critic to enter the fray was Von Mises, who set out his stall in a famous article in 1920 – Economic Calculation in the Socialist Commonwealth. Von Mises made the argument in a very interesting way. Traditionally the criticism of  communism had been that socialism was a wonderful ideal but humanity had somehow failed to live up to it. This view is reflected in the entomologist  Edward O. Wilson’s famous quip about Communism: “Great idea: wrong species.” But Mises goes much further. What he shows is that socialism is a bad idea because it cannot deal with the demands of a  complex world. In a small band of hunter-gatherers this kind of system may work, but when you have a lot of strangers together, it becomes impossible. You have the intractable problem of how to use scarce resources. As there are no real prices, the central planners would not know how to allocate the available resources efficiently.  Murray Rothbard summed up Mises’s critique:

All right, suppose that the socialists have been able to create a mighty army of citizens all eager to do the bidding of their masters, the socialist planners. What exactly would those planners tell this army to do? How would they know what products to order their eager slaves to produce, at what stage of production, how much of the product at each stage, what techniques or raw materials to use in that production and how much of each, and where specifically to locate all this production? How would they know their costs, or what process of production is or is not efficient?

In his groundbreaking 1945 essay, The Use of Knowledge in Society Hayek foresaw many of the problems that would be beyond the scope of even the most powerful computer. Hayek argued that the market was the best mechanism for calculating and coordinating choices; markets and competition were the best way to discover information. Prices were an information signal in the market; competition led to decentralized social planning. Here is Tim Harford writing about Hayek:

What Hayek realised, is  that a complex world is full of knowledge that is very local and fleeting. Crucially, the local information is often something that local agents would prefer to use for their own purposes. Hayek’s essay pre-dated modern computers, but his argument will retain its force until the day that computers can read our minds.

Who won this great intellectual battle? What is interesting is that there has a certain ideological to and fro since it all  began in the 1920s. I find the Austrians’ critique of Marxism utterly devastating. However, there will never be a definitive solution to these questions. The idea of an efficient market has taken rather a battering since the onset of the current financial crisis. But all the problems that have bedevilled central planning cannot be just made to go away. We would be making a tragic mistake if we went back to the kind of grandiose top-down planning that has failed time and time again.

Could technology become a game changer in the future.? Lenin was quoted as saying that the West was so hungry for profits that they would sell us the rope to hang them with. I have often wondered what would happen if a capitalist firm came up a computer that was so powerful it would actually make centralised planning feasible. I don’t really see it ever happening but it’s a tantalising thought.

* What I also noticed was the different strikingly different interpretations given to this fact. In the Guardian Andy Becket had a rather different take:

But they found the open, egalitarian aspects of the system unattractive and destroyed it.

These differing interpretations are typical of this whole episode.

There are some excellent resources about Project Cybersyn online:

Designing Freedom, Regulating a Nation: Socialist Cybernetics in Allende’s Chile.  

Free As In Beer: Cybernetic Science Fictions. A 22:56 video.

Planned obsolescence

I accost an American sailor, and I inquire why the ships of his country are built so as to last but for a short time; he answers without hesitation that the art of navigation is every day making such rapid progress, that the finest vessel would become almost useless if it lasted beyond a certain number of years. Alexis de Tocqueville, Democracy in America, 1840.

Planned obsolescence is not really a new concept. God used it with people. Robert Orben

The article that refuses to wear out is a tragedy of business. Advertising manual, 1928

 Much so-called planned obsolescence is the working of the competitive and technological forces in a free society—forces that lead to ever-improving goods and services. Philip Kotler, marketing guru.

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The other day TVE showed a documentary Comprar, Tirar, Comprar (Pyramids of Waste) about planned obsolescence. The tone of the programme was anti-capitalist but I suppose that is par for the course. The subject is definitely worth further consideration.

Planned obsolescence is a policy of deliberately designing a product with a limited useful life, so it will become obsolete or non-functional after a certain period. The idea behind the strategy is to generate long-term sales volume by reducing the time between repeat purchases. The notion that it takes place has gained widespread credence but how real is it?

The programme made some interesting points but I think they failed to look at the benefits of the process. There was one French professor, Serge Latouche, who suggested that we could somehow stop in the 1960s. that seems absurd to me. We humans have many flaws, but we are fantastic innovators. What we should be doing is looking at more sustainable designs.

The term planned obsolescence is associated with Brooke Stevens, an American industrial designer, who used it at a talk given in 1954. However, it probably goes back two or three decades more. In 1932 Bernard London published a paper called Ending the Depression Through Planned Obsolescence. His solutions to the crisis echo Aldous Huxley’s Brave New World:

“I maintain that taxes should be levied on the people who are retarding progress and preventing business from functioning normally, rather than as at present on those who are cooperating and promoting progress. Therefore I propose that when a person continues to posses and use old clothing, automobiles and buildings, after they have passed their obsolescence date, as determined at the time they were created, he should be taxed for such continued use of what is legally “dead.” He could not deny that he does not posses such goods, as he might hide his income to avoid paying an income tax, because they are material things, with their date of manufacture known. Today we penalize by taxation persons who spend their money to purchase commodities, which are necessary to create business. Would it not be far more desirable to tax instead the man who is hoarding his money and keeping old and useless things? We should tax the man who holds old things for a longer time than originally allotted.”

There are important kinds of planned obsolescence:

Functional obsolescence is a type of technical obsolescence in which companies replace old technology with a newer one with more capabilities. How evil of them! Of course sometimes they try to speed up the process by making repairs to an old model nearly as expensive as buying a new model. 

Systemic obsolescence is the deliberate attempt to make a product obsolete by altering the system in which it is used in such a way as to make its continued use difficult. For example, technical support may be withdrawn.

Style obsolescence occurs when marketers change the aesthetic elements of its products so customers will purchase products more frequently. The style changes are designed to make owners want to purchase the latest version even if their one is working perfectly well.

One of the examples in the documentary is the light bulb The idea of a conspiracy to prevent the manufacture of a permanent light bulb is a perennial topic for discussion. There is a famous light bulb, the Centennial Light, which has been lighting a fire station for 104 years (911,020 hours). The documentary refers to the Phoebus cartel, which included Osram, Philips and General Electric, and whose goal was to banish ever long-lasting light bulbs from the face of the earth.

This is the stuff of great conspiracy theories but according to John Kay it is all a myth. He describes the following scenario: Imagine there are several competing producers of light bulbs. An inventor approaches one of them with his everlasting light bulb. While sales will fall when all the world’s bulbs have been replaced, until then it will enjoy a 100% market share. It would be its competitors who would be losing sales. Innovation is a fundamental part of a competitive market. What firm would be willing to let such a business opportunity escape? Kay argues that it was always possible to manufacture light bulbs that would last for many years. The problem was that the higher cost and lower efficiency made them unattractive to consumers. It is just recently that new technology has emerged that enables low energy bulbs to be manufactured at a cost close enough to that of a conventional bulb.

In what situations can companies get away with planned obsolescence? Economists tend to be very sceptical. In many cases we are the ones who demand it. The planned obsolescence isn’t necessarily because manufacturers are purposely building cheap crap that has to be replaced in a few years. I would also argue that not everything should last forever. Manufacturers suppose that you will  buy a newer model in a few years, so there isn’t any reason to spend a fortune making the product last longer than you plan to keep it – it would be absurd to have materials that lasted 15 to 20 years in a mobile phone.  We all love to nostalgically remember how things used to last much longer in the good old days but the reality is that we probably won’t be using them long enough to care. We may say we want our products to last, but our actual behaviour tells another story.

We may well need to look at the negative externalities of disposing of so much stuff. These costs may well not be reflected in the prices of many goods. Ultimately we have the power. Capitalism is very good at giving us what we want. If we hear that a company has installed a chip in a printer that will automatically stop it working after a certain number of uses, then we should boycott that product. Thomas Sowell has argued that capitalism is a misnomer:

“What is called “capitalism” might more accurately be called consumerism. It is the consumers who call the tune, and those capitalists who want to remain capitalists have to learn to dance to it.”

If we want longer-lasting products, we will get them; we have that sovereignty. Let’s make sure we use it.