Erik's Rants and Raves

Political debate on the right after Twin Attacks

2011-07-31T03:02:00.001+02:00

Norway is not as innocent as it once were, crime has risen sharply over the last years as membership of the European Economic Association has allowed criminal gangs to travel freely between European countries. This has mostly been causing a big increase in theft, burglary and similar. The most serious offense however homicide has been going down though. And it was already fairly low to begin with.

Now with the bombing and shooting massacre carried out by Anders Breivik, the homicide numbers have shot through the roof and I am not sure what to think of my beloved country anymore. Where is this all going? Will we be able to get back to normal?

I seriously struggle with what to think about crime, immigrants, conservatives, free speech, tolerance etc. On the one hand most immigrants I have personally met have been quite nice people. Actually let me rephrase that. It is really about what should I think about muslim immigrants. As I said most I have met have been really nice. But at the same time I keep hearing stories from friends and others about all the problems. A friend recently got mugged in the middle of the day by what looked like a middle easterner. People too often seem to end up in fight with muslim gangs, when staying out partying late on a saturday night. Often for ridiculous things like looking at a guy in the wrong way. When the fight starts the muslims are often quite cowardly in bringing in lots of people. It never seems to be one against one but more like one against twenty. These kind of stories I have hear from people in both Norway and Netherlands (where I recently lived). In the news you can read about how most rapes by unknown attacker in Norway and Sweden are done by muslim immigrants. Something like 70%-80% of the cases despite constituting less than 10% of the overall population. Most people in prison are apparently non-norwegians too.

Sure this is a minority of bad apples among a great majority of muslim immigrants who are peaceful and law abiding. But still the fact is that there are more bad apples to be found among these group of people, than the rest of the population. Then we have the increasing ghetto. I live in an area were I have become an ethnic minority in my own country, just like many other Norwegians living on the east side of Oslo. I am trying to think positive about it. After all everybody I have met speak fluent Norwegian and seem very friendly. Except I can't get passed the feeling of alienation looking at all the women walking around in hijab and almost never seeing anybody that looks like me. I worry about my son, being a small minority of white people in his preschool. Maybe it will be fine, but I don't know.

That is the problem. I just don't know where this is all ending. Will more whites flee the area? Will my son be in danger of being bullied or teased because he is a minority? One can read about stuff like that in the papers, but how serious should I take that?

All these problems don't go away just because Anders Breivik tried to attack Norwegian multicultural society. What he did can not really be described well with words by me. It was horrible and shattered Norwegian sense of innocence and safety. Now it seems like it will in many ways create a better society by brining the whole of multicultural Norway close together. Maybe integration will work better this time. Maybe muslims and ethnic Norwegians will get along much better after this. I hope so. But I also see the danger of this potentially destroying the debate about the problems.

Anders Breivik really destroyed our ability to debate the problem areas of Norwegian multicultural society. Can we solve the problems if we can't debate them? I think a lot of the points he brought out was quite valid and not crazy at all. But because of heinous acts these points have become invalidated, and people like me on the moderate right side will suddenly be embarrassed to hold some of these views in public.

Review of Malcolm Gladwell's Blink

2011-04-28T18:44:00.000+02:00

Malcolm Gladwell's book Blink is about the power of our unconscious decisions. How we can make a judgements in a blink which are better than judgments done consciously with elaborate reasoning.

To do kind as the book is about, my immediate response to the book, is that I like it but I feel it is making something fairly obvious magical and mysterious. Our life is full of things we process unconsciously that most people should be very familiar with. When I e.g. read english I can usually point what sentences look right or wrong, even though I can't explain it. I had the same experience when teaching Norwegian my native tongue. Often I was asked why is this sentence structure wrong. Often I could not answer. I just "knew" it was wrong. I would know it at an unconscious level. Similarly when I do touch typing, if somebody asked me where a particular key is, I couldn't answer. I would need to pretend trying to type the letter to be able to figure out where it is.

Basically all this is pattern recognition. Our brains are trained to do that through a long iterative modification of networks of neurons in our brain as we are practice recognizing the pattern. We can't consciously look at or explain the configuration of this neural network. Most "thinking" we do is like this. We immediately recognize a face through an unconscious process. We can seldom articulate why a face looks like a particular person. We can tell a female face from a male face without being able to articulate it. A female face has finer lines, more relative distance between eyebrows and eyes, smaller nose, shorter fuller lips etc. But most people would not be able to consciously identify this.

We don't consciously calculate the trajectory of a ball to catch it. We do this unconsciously. We can't explain why we placed our hand at a particular height.

This is all around us, I don't have to give more examples. But that does not mean our gut feeling will always be better than our conscious calculated reasoning. If our neural pattern hasn't been trained to recognize the pattern, then our gut feeling is worthless. This is common when e.g. learning a language. For instance when I started with German, it was impossible to tell whether a sentence was right or not. If I tried I would get it wrong. When starting I would have to consciously reason about the rules or grammar. However as you have been consciously constructing grammatically correct sentences over a long time, you gain the ability to "feel" what is right or wrong. After some time you forget all the grammar. You can't consciously reason anymore why a sentence is right or wrong. You only got the gut feeling. However you have to start with using conscious reason over a long time before we can get there.

Same with reading we start by meticulously identifying each letter in a word to figure out what a word is. However as we get used to reading we don't really see the individual letters. We identify the whole word as one shape. Just as we identify a face as a whole unit. We don't look at each sub feature and carefully construct who it is.

But you don't have to consciously learn something to be able to do unconscious pattern recognition of something. Rather than meticulously learn the grammar of a language you could read a lot of correctly formed sentences. Over time you will get a feel for what is right and wrong. Sometimes that is the only way because it is not possible to articulate the structure of something.

A friend of mine talks of how she was struggling with learning to identify medieval script. There are many kinds from different time periods and you have to be able to look at a script and tell what time it was written, in what tradition, area etc. She struggled hard and gave up because the teacher was not able to articulate how to do the identification. He said "you just have to look at it and feel it". You might think this teacher is an idiot. But he is probably right. You can't articulate it, so you have to feel it. But he's flaw is that he could not convey to his students how you would learn to feel it.

It is rather simply though. Just like language. You have to look at a lot of scripts until you just gain the feeling for it. One way would be to say use a computer that would present you with two images of scripts and you would have to select which one is of a particular script. First you would train on just two types of script and show a large number of image pairs texts in different script. Sometimes two images of the same script and sometimes of different script and have the use identify which one is which. Each time you make a choice the computer would tell you if you were right or wrong and what is the right answer. Immediate feedback. After enough testing you would develop a sense over which one is which. Then one could continue by throwing in another script. Then another script until the student is able to do the identification. This will of course a very long time, but at least then the student will know how to learn it.

This is quite similar to how we would train an artificial neural network created in computer software. We would present it with a series of pictures and have it try to do the correct pattern recognition and then correct it in a long feedback loop until it got properly configured.

It is nothing magical about this. We know that we can use our gut feeling if we have practiced on something for a very long time with proper feedback. If we haven't practiced on it we would probably have to use conscious reasoning.

The teacher and the CEO

2009-08-14T13:15:00.003+02:00

Both teachers and CEO affect the performance of the work of a large number of people. A CEOs decision can make millions in difference for how a company performs. Ultimately it is about directing a large number of people towards there most productive or profitable work.

Likewise a good teacher will over the years result in several hundred people who will perform better in their jobs and careers than they would otherwise. Of course just as with the CEO we talk about very small percentage difference for each person, but which adds up when you consider the number of people.

And yet a teachers salary is minuscule in comparison to a CEO's salary. Why is that? The extra benefit they bring to society is probably similar. However a teachers students do not belong to a company which performs better or worse depending on their performance, so that the owners will see it as profitable to get the maximum performance from the teacher. The extra value a teacher brings to society suffers from the free rider problem. Just as nobody would pay you much to clean the air, because the benefits are distributed over too many people.

I is just a thought that recently occured to me. I think this is an example of a market failure but I am not sure. One might still wonder why good teachers in private schools don't make loads of money, perhaps it is an information problem.

And even if there was a way to compensate better teachers, would it really make much of difference to society apart from making more smart people chose to be teachers? It is not obvious what an optimal distribution is of teachers across all the students of a country. Should the best teachers teach the brightest students or the less able?

Peoples dislike of the top menu bar on OS X

2009-07-22T16:05:00.003+02:00

I just stumbled across a discussion about simplification of the Nautilus file manager toolbar (used on the Gnome desktop environment on Linux).

A fellow who calls himself Aigars Mahinovs wrote this:

I know very well what Fitts law is, the problem is that it is useless in case of multiple windows (as mentioned before) or if you need to get back to the window. And it is even worse for dealing with menus, because they drop down.

It is great that I can disregard the vertical component while getting my mouse cursor to the menu. It is not great that I have to move my eye focus from one side on my large 1080p monitor to the top left corner of another 1080p monitor. It is not great that after I click on the menu, I still need to position my mouse *exactly* on the sub-menu items and the sub-sub-menu items. And then when this whole thing is done I need to travel with my mouse and focus all the way back to my original window.

It is a horrible design.

As an additional fun exercise, try working out how to implement global menu with focus-follows-mouse.

I see this kind of arguments against the Mac menu bar every once in a while, often people seem to not know very well what they are talking about. But Mahinovs seem to know quite well what he is talking about and seem to have put quite a lot of thought about it. Which makes it all the more puzzling to me. I wonder has this guy really tried to use a Mac for an extended period?

At home I use a 24 inch iMac. That should be ample space to get this terrible experience he speaks of, but I have yet to experience it. He describes mouse movement as if it involved running and you should move as short as possible to not strain yourself. But moving far distances with a mouse across the screen if you do not need much precision is very easy. That is exactly why fitt's law shows that hitting large objects on the screen is faster than hitting small objects. If there was any truth to Mr. Mahinovs assesment then buttons should be as small as possible so one would not have to move the mouse so far to get between them. But we know that it is quite the contrary, they should be large. That is quickest. It is just the need to balance screen real estate with fitt's law that don't make them huge.

Of course there are other important reasons why a top menu bar makes sense: It makes it possible to have windowless applications, and to have small windows for your apps. Frequently when using Gnome at work I need to resize a window to be able to access all the menu entries. I end up with wasting screen realestate because I need to have windows bigger than I need just to get space for the menu bar.

And finally the case of multiple windows is irrelevant as one spends most of the time accessing menu entries in one app at a time.

Review of "How Rich Countries Got Rick", part 1

2008-11-02T23:33:00.001+01:00

I recently stumbled on a book called "How Rich Countries Got Rich ...and Why Poor Countries Stay Poor" by Erik S. Reinert a fellow Norwegian. This is a topic of great interest to me and from what I could read in the first pages it took a more historical approach to economics, rather than the mainstream mathematical one.

Background for interest
I found this interesting in context of the current financial turmoil. Neo-classical economic theory has just taken a hard blow. Greenspan has admitted that he was "wrong", in the sense that markets are not as self regulating and self-correcting as neo-classical economists often like to think.

So that is why I started reading this book with interest, only to be majorly disappointed. Well, it could get better. I have only read the first chapters, so that is why I call this part 1.

Method of reasoning
What I strongly dislike about the book is excessive name dropping and what in my mind amounts to cheese Hollywood "one-liners". All through the pages I have read Reinert mentions countless economists, scientists and philosophers, but without doing much more than mentioning a single sentence they said about something to backup his own ideas. Just to pull a random example:

Recognizing this in the middle of the Cold War, in 1955, Nicholas Kaldoor (1908-86) wrote that "the Marxian theory is really only a simplified version of Ricardo, clothed in a different garb"

For us to understand why Communist economic theory and neo-classical is very similar Reinert should explain concretely why by mentioning concrete examples of assumptions and predictions in both theories. Instead he pulls quotes like this full of irrelevant information for almost anything he asserts. Do we need to know that this was in the middle of the Cold War? Do we need to know when Kaldoor wrote this? Do we need to know when he lived? Name dropping a bunch of people who said single sentences that amount to back up your view on economic theory, does not assist the reader in understanding why that is so. We are just invited to believe you because apparently so many smart people seem to think what you think, but we don't need to know why apparently.

Reinerts flawed understanding of science
Reinert goes to great length to ridicule current economic theory based on abstract math. Of course this is not completely unwarranted. The mathematical models are based on assumptions which are often crude approximations to reality. Economics also suffer from the problem that unlike a lot of other science one can not conduct experiments were one can control variables properly.

But from there to completely dismiss the validity of using abstract mathematical models for economics is big step. Reinert argues that mathematical economic theories today assume each person is identical, each labour hour is equal etc and thus reach the wrong conclusions because in reality differences are considerable between humans, type of work etc.

But Reinert is completely missing the point. Nobody who do mathematical abstractions of the real world pretend that these abstractions are the same as the real world. But that does not mean that these abstractions are worthless. These abstractions are also contrary to what Reinert seems to suggest not unique to the field of economics. It applies to every science.

Reinert likes to compare todays math based economic theories with theories in physics, but physics makes the same kind of generalizations and abstractions as made in economics. In physics we also have to assume things that don't exist in the real world like perfect spheres, frictionless surfaces etc. Even in physics you can't just apply theories willy nilly without considering context. Sometimes one has to use the wave-theory for describing the behavior of light and sometimes one has to use the particle theory to describe behavior.

Abstractions and assumptions are necessary to be able to reason about particular aspect of a system. When we make economic theories, we don't need to consider human beings digestive system or hair color to make a useful theory. The key is to extract those traits which matter to economic behavior. That current theories make assumptions about economic behavior which is wrong does not make the approach of abstraction wrong. It simply indicate that we need to find better assumptions and adjust our theories.

Failure to understand the concept of comparative advantage
Reinert paints a caricature of what comparative advantage is about. In fact I am wondering whether he actually understands it at all.

He takes the example of comparing a waitress to an engineer or a country of dishwashers and shoeshiners with a country of lawyers and stock brokers. In fact he makes these comparisons repeatedly with rehashing the same point over again and over again without bringing anything new to table. The last paragraph I read about comparative advantage he is ridiculing the idea that a stone age labour hour should produce the same wages as a Silicon Valley labour hour according to Richardian trade theory.

There are a number of flaws in these comparisons and I will try to address the most obvious I can spot.

First of all comparative advantage does not imply that we will get the same wages. It simply states that wages will be better than if each one did not stick to their comparative advantage.

The principle of comparative advantage is not really that difficult. It is clearly explained at wikipedia. I am a software developer by trade. I could in theory build my own house and a builder could in theory write software. Except neither of are very good at what the other one does and would have to spend a lot of time learning the other trade and then do a shitty job at it. So rather than my taking some days of each week to build my house, it is better than I work the whole week writing software and paying a builder to make my house. He can use that money to buy my software rather than spend ages creating it himself. We are both better off even if that doesn't mean that the builder will make the same amount of money as me.

I believe the core of Reinert's misunderstanding is that he equates a way of performing a trade with the trade itself. If you specialize on washing dishes by hand of course you can never get rich. But if you specialize on simply washing dishes you could eventually automate it in some way, increase productivity and get higher returns.

Secondly Reinert takes a too static view of comparative advantage. We are of course talking about a limited time scale. Richardian theory doesn't ban you from educating your population. Even if a country focus on its comparative advantage and that happens to be say agriculture that doesn't prevent manufacturing from entering naturally. If one continuously improve productivity in the farming sector then eventually there will be a lot of unemployed people. They got to do something. We see this thing all the time. Simpler types of manufacturing moves from developed countries to developing countries thus spreading development.

Look at e.g. China it is a developing country and even if it opened up its borders to complete free competition they would still be manufacturing things for the whole world. Why? Because it is still cheaper to manufacture in China than anywhere in the western world. Factories would move there regardless.

And yet according to the theories of Reinert, a country like China should be stuck being poor. It would only develop industry if it protected its own. But China doesn't need to protect any domestic industry. Industry moves in from abroad regardless.

Joe the plumber

2008-10-19T22:38:00.001+02:00

John McCain pulled used the example of Joe the plumber at the last presidential candidate debate with Barack Obama, as a way to bash him for his tax policies.

Now I think Obama actually gave, quite a good answer on the whole issue so I don't see how the republicans and the media can make this into such a big deal, but regardless it does raise some important fundamental questions.

Joe (which wasn't his real name) was upset about the fact that Obama's tax policy would mean that he would have to pay more tax (than with McCains plan) when taking over the plumbing business, which he claimed would make more than 250 000 dollars a year. Of course we have the fact, which Obama pointed out, that he would be paying less tax now with Obamas plan.

Still the main question is, is it fair that you have to pay more taxes when you have worked hard and finally made it? Why should not people be allowed to enjoy the fruits of their hard labor?

Present Joe vs Future Joe
That is one way of looking at it. But I would invite the reader to try to look at it from another angle. If we assume most people will follow a Joe the plumber career it means that they will spend many years working long hours not making much money before they finally make it and make loads of money.

If one simplifies this means that people will spend most of their young years poor and they old years rich. That kind of sucks doesn't it? It is not when you are old you need the money. Joe the plumber has been needing a lot of money already to give his 13 year old kid a good upbringing. That means giving him access to good schools, and getting enough time to be home and help him with homework or all other problems of life. Simply to be there to be a good role model.

Wouldn't it be great if present day poor Joe could borrow some money from future old and rich Joe so he could spend more time with his son and give him better opportunities. Old and rich Joe has no son living at home. No mortgage to pay and no college for his son to pay, so he really doesn't need all that money.

Well turns out there is a way for future Joe to give some money to present day Joe. That way is Obamas tax plan. It doesn't make Joe pay less or more taxes through his life, but it lets present day Joe pay less taxes today, by taxing future Joe a little harder.

To me that sounds like a good trade off. Future Joe has a lot more money so he can afford to pay a bit more tax while present day Joe could really do with a tax break.

Michael Moore Hates America

2008-10-19T01:17:00.003+02:00

Today I got down to watching Michael Wilson's documentary about Michael Moore called "Michael Moore Hates America". I don't really know what I expected.

But I was curious about it because I had heard quite a lot about how Michael Moore twists the facts before, which made me interested since I have seen Fahrenheit 9/11 and Sicko and thought both of them were quite good.

By quite good I mean I found them entertaining, interesting and that they had quite an important main message. That doesn't mean I agree with everything Michael Moore says or does. I do think he paints things a bit black and white and attempt to suggest connections were there are non. But I don't think that is a huge problem. Viewers should be able to judge for themselves based on the footage they see and make their own conclusions. As long as the footage is authentic and hasn't been tempered with or altered viewers should be able to make their own conclusions, especially when they have already been made aware that Michael Moore does employ quite creative ways of stringing together footage.

So having said that I must say that "Michael Moore Hates America" was an extremely disappointing piece of documentary. I don't think Michael Wilson is being dishonest. In fact I think he is probably more honest in his documentary making than Michael Moore is. He really does seem to be a good guy that wants to do the right thing, etc.

So why do I think it is such a disappointing piece of documentary? First of all the documentary is just really boring. It has no entertainment value. Often it just feels like a bunch of talking head blabbering away without ever getting to the point. At least Moore's movies are to the point and entertaining. Secondly it is surprising how little it has to show for. At the end I was thinking "This is all they got?" I was sure there would be lot more factual errors by Moore that they would report on. The documentary made me almost think that Moore was a lot more truthful in his documentaries than I had given him credit for.

Liberties with the truth Michael Moore style
While my impression was that Wilsons tries to be more honest than Moore, it doesn't mean he is. Someone else should probably take their time and look through his documentary for factual mistakes more thoroughly the way others have with Moore documentaries. But it was quite obvious for me early on that Wilson employed a lot of the same tactics in his documentary as Moore does. I think that is a bit hypocrite when one makes such a big point out of how bad it is that Moore does it.

Specifically he tries to discredit Canada as being any safer than the US, stating that Canada has twice the crime rate of the US. While this is in fact true, it is misleading the viewer by not giving any further specification. From wikipedia and by following its references we can read that the US that robbery rate is 65% higher, homicide rate is more than 3 times as high, more than twice as many aggravated assaults per capita etc. In short for any serious crime the US is far above Canada. Canada has overall more crime than the US because there are more of things like bike thefts, shop lifting and more theft of Trucks etc. Really, I don't think bike thefts make Canada a more unsafe place than the US;-)

Secondly all the Americans he interviews in the movie are your stereotypical hard-working american, while the few Canadians you see are stereotypical teenage dope-heads (not that I claim they are drug users, they just look like it). They got piercing, long hair and what they said can essentially be distilled to: "Dude, America is so stupid. We are like some much better in Canada".

Thirdly Wilson doesn't seem to try to make in balance in his movie by interviewing people of different political stripes on their opinion of Moore or analysis of his movies. They all seem to be well known far-right conservatives. Now Moore might do the same with liberals, but wasn't Wilson supposed to be more honest and truthful than Moore was?

Some general observations on the show a positive side of America part
Apparently one of Wilson's other stated goal in the movie was to show a more positive side of America and American values. To a non-american it didn't really do that. Quite the contrary. There were sentences like: "People are downtown enjoying all the freedoms this country gives them". Which prompt me to wonder, what freedoms? The freedom to go to a bowling alley and get pissed drunk in a bar afterwards? No, seriously as one of the worlds oldest democracies the freedoms Americans should in that case be enjoying are freedoms given to you in a democracy, like the right to vote, the right to write and say anything you want etc. That is not stuff you go downtown and enjoy on a saturday night. Suggesting that is just meaningless hot air.

Most other sentences proclaimed by one guy after the other seemed to be along the lines of: "America is the best country in the world, and it offers more opportunities and freedoms than any other country in the world. It is the best place to live. You can do anything. You can become anything etc".

I do think America is a great country and I think it is good to be proud of your own country, but somehow I have the feeling that 95% of all those people proclaiming these things in the movie have never set their foot in another country, aside from perhaps Mexico and Canada. And judging from my own impression from traveling around the American heartland, they haven't read or learned much about other countries to be able to make such bombastic claims about America and other countries.

Hence the impression that the movie does not give a positive image of the US, but rather a view of a country made up of people you are quite ignorant.

Michael Moore movies on the other hand give a much more positive image of the US, because it shows people who are aware of Americas flaws and want to fix them and make it a better country. If anything Moore movies make the American system look bad. But they certainly don't make regular Americans look bad. Quite the contrary.

The lack of innovation in large companies

2008-03-30T17:56:00.002+02:00

From following news in the tech industry and my own experiences working in the corporate world it has occurred to me how useless in fact a lot of large companies are. Both in software and medical industry real innovation seldom seem to happen within the companies. Instead it happens in small companies and these get bought by the big companies who make the inventions widely distributed and used.

In many ways it reminds me of the relationship between the Romans and the Greeks. A lot of what we consider as Roman inventions were in fact greek. If the Roman empire was the big multinational, the greeks were the small upstart company with all the good ideas, however they lacked sales channels, production facilities etc. When greek inventions got adopted by the Romans they got spread to the whole world (or what was the whole world then rather). Roman sense for organizing, standardizing etc made sure that inventions got put to efficient and widespread usage.

I worked for a small upstart company once competing against a huge multinational company. With a handful of software developers we managed to do what the behemoth with its army of thousands of programmers proved unable to do despite endless attempts. In the end lack of infrastructure for sales channels put limits on growth despite the spectacular progress we experienced, so in the end my upstart company decided to get bought up by the multinational. And then things suddenly snowballed. The product really gained ground when the big corporate machine with its huge sales channels and large network of people knowing each other the the board rooms were able to push the product to each other.

From reading the tech news I realize that this is just the common way things happen. Apple got their iPod software from a small software company. Their iPhone touch interface they got from another small tech firm they bought. Microsoft got MS Office from another company. Even DOS, the foundation of Microsoft's dominance, was bought from another hacker by Bill Gates. Visual Basic was bought from yet another company, and so I believe their ubiquitious COM technology was as well. The list goes on and on. Likewise the new drugs that big pharma "invents" almost exclusively comes from universities or small biotech companies.

I don't mean to say that these big companies aren't useful and don't serve a purpose. They obviously do. However I think they greatly exaggerate their own importance. Now that wouldn't matter much it if it was just about bragging. However they use this constantly in favor of giving themselves fat rewards for their "innovation" and whine about the need for protection of their intellectual property, usually in the sense of never expiring patents and the likes. Without it they say they can't protect they investment in research and development. And without that no innovation and society would suffer. Only problem is, they are not the ones inventing anything. It is the small companies which do, the ones who typically can't afford to protect patents in courts or file a patent to begin with. So what this really ends up being about is how to basically buy monopoly rights so you can milk the customer for what he or she is worth as long as possible.

But this isn't really unique to tech industry. It is the same with the content creation industry. The big record companies get copyright to songs they never wrote. They are not the creative geniuses, and yet they are the ones which by far get the biggest benefits. But they got all the leverage. Without them an artist cant distribute his or her music to people or let it be known.

Hopefully the world will change when technology like the internet will allow artists to spread their music and sell it without having a big corporation behind you. When you can sell from iTunes you don't need big companies with CD manufacturing facilities and CD distribution networks to reach the consumers.

Big corporations reap the benefits not because they are innovative but because our current technological limitations, favor them. When products and ideas can more easily be spread and realized they will be made superfluous.

Corporate Greed

2008-03-30T16:22:00.003+02:00

I used to be outraged at peoples complaints about CEO pay in Norway. Nobody ever seemed to complain about the huge salaries which fotball players get payed, despite the fact that running a company in my view is a much more important business than kicking a leather ball around on the field. CEOs do a very important job and should be rewarded for it.

However something has been bothering me for a long time: the feeling that something still isn't quite right. The CEO pay might not after all reflect market value, and it might not work as incentive in the right way. Looking at numbers for how CEO pay is increasing much higher than pay for all other professions and it does this in time without comparable increases in corporate performance. Add to that the fact that a lot of CEOs make a lot of money even when they screw up.

I think a lot of us who are believers in the free market easily get apologetic about this. Economic text books tells us that valuing things at market value is the most efficient way to allocate resource and make the economy grow. So if the market says CEOs need to make 10 million dollars that must be the best for the economy? Never mind the fact that we feel very uneasy about this fact. I think what really made me rethink the idea was reading about the insane salaries of CEOs in the US. They are so beyond anything I imagined that they start to look like some sort of caricature of the free market.

Most influential for my change of views is probably reading books like Freakonomics, The Undercover economist and about the prisoners dilemma from game theory. It shows clearly how market sometimes fail spectacularly and that often we forget that money is not the only thing with which we can buy goods or services. Social standing, reputation, positive feedback also factor in on our evaluation. The high regard and fame one would get for say curing cancer would to many be worth much more than a given amount of money.

In the case of CEOs I believe that is an example of market failure. Adam Smith the father of modern capitalism even pointed out 250 years ago how companies were best run when there was few owners and the owners were engaged in the operations of the company. He observed that the bigger the companies got the less people care about performing well because ones own performance matter less and less to the overall result of the company. And when the leader (CEO) of the company isn't even owning part of, he or she will have less at stake to make it perform.

So one has tried to alleviate this by giving stock options. Only problem is that since CEO don't get to stick around for very long time, they never get in the habit of doing things which are particularly good for the company in the long run. It ends up being all about short term profits. Whatever will make the stock go up while you are still in the CEO chair.

That is one problem, but perhaps the most serious one is related to the prisoners dilemma. Just as the prisoners end up choosing a strategy which is bad for both of them, the arms race between companies in giving their CEOs higher salaries aren't really helping society or the companies, but they have no way to end the race, because they can't simply agree among themselves to not pay more.

Obviously CEOs need a better compensation than a lot of other workers. Otherwise companies wouldn't get talented people to run companies. They would go do something else. Maybe even something that pays less, if it is less stressful. However the problem is that American CEO salaries are now so high that even if you cut the salaries to one tenth, being a CEO would still be more desirable from an economic point of view than anything else. So one wouldn't loose any bright heads to other professions. Likewise as long as the relative difference remained, big companies wouldn't lose heads to smaller companies because there would still be more to earn at big companies.

Of course one couldn't just slash their salaries by fiat or by setting maximum ceilings on income etc. I am not a socialist so I don't believe in force. No, the main problem the way I see it is simply the culture of greed. Greed has become accepted, almost saluted. Many might point out that among average Joe this isn't always the case, but the problem is that the CEOs and the corporate fat-cats themselves, see it as admirable. They all think they deserve it. They think their contribution to the company is so great that they need to be rewarded with tens of millions of dollars. As long as they believe this, the problem can not easily be fixed.

Not until they realize that this is pure greed and selfishness can one see any change. So in my belief what is needed is a change of values and ideals. And that is not something which can easily happen. It can certainly not happen by government passing a new law. What we need is a great leader or person to step forward and change public opinion. To make greed and flaunting your wealth embarrassing again.

I am sure many die hard Libertarians will denounce all of this either jealousness, or say that the CEOs really deserve what they get due to the extra value they bring to the company. Of course this is all rubbish, in more ways than I can count. First of all a lot of people high up in the system get there from going to the right school, not for being bright but because their parents had a lot of money. Companies higher these people not because they are bright but because of the connections they get at ivy league universities. Companies value those connections. And thus the system perpetuate itself. A lot of potentially bright people who could have been great CEOs never make it because they didn't belong to the right social circle.

Secondly the contributions of a CEO pales in comparison to the result a company gets from a a bright engineer or scientist coming up with a bright idea. Yet, even if inventors typically contribute the most to both the companies and the countries economy as a whole, their reward is often miniscule. In fact it is surprising that people become scientists and researchers at all because it makes next to no economic sense at all. Yet they do. If people can put endless hours each day into the pursuit of curing cancer, without being paid millions of dollars, why shouldn't a CEO?

It all comes down to bargain power. Scientists are not typically trained in the game of economics and they have less bargain power than a CEO, because their work has less short term impact on the company's economic performance.

I am not asking for CEO salaries to scientists and engineers, but merely pointing out that people who are equally hard working, equally intelligent and over the long run has equal influence on the economic performance of a company still manage to be motivated to do a good job, with a much lower salary. Perhaps because because people do in fact also value rewards which are not measured in pure monetary terms?

Proving existance: God vs Dawkins

2008-01-14T22:36:00.000+01:00

Some time ago I read an article called Does Richard Dawkins Exist?. It was quite intelligently written, as a way of making fun of Richard Dawkins or any other atheists rebuttal of the existence of God.

What strikes me however is that it is like every other argument by religious favoring the existence of God. It is the same flawed argument they have been using ever since the days of Darwin. The arguments are always the same, except they get update with new shiny wrapping every so often and presented as a new killer argument.

Basically this parody is trying to appeal to our common sense. The reader is invited to believe that only an idiot would be this skeptical about the existence of Dawkins. It is self evident that he exists. From this the reader is tricked to draw the conclusion, that likewise only a fool would doubt the existence of God. Just look around you at the wonders in nature and it should be self evident that he exists. The fact that dispel this kind of argument in "God Delusion" the very book the essay writer makes fun of is a bit ironic.

The key, which Dawkins explains at length is that the argument is based on the flawed assumption that the existence or non-existence of anything we don't have solid evidence for or against is always the same.

It is true that we can't know for 100% sure that Dawkins exists. In fact we can't know anything 100% sure. But that doesn't mean that everything is equally probable. Some things are more likely than others. Evidence always weight more towards one conclusion than another.

In a murder trial we might have technical evidence like the blood of the suspect at the crime scene, the gun is found to have been registered on the suspect, he doesn't have an alibi for that night etc. Sure the cynic can say that we don't have 100% proof that he did it because we weren't there and saw him do it. But as evidence piles up, it becomes very likely that he did it. At one point it becomes so probable that we simply conclude "He did it" and put him behind bars.

Likewise I can't know for sure that Dawkins exist, put if I was a lawyer in a trial, trying to prove his existence I would have quite a lot of evidence to support me. I could show books which he wrote. I could show footage of him speaking. I could make calls and get witnesses which can attest to the fact that they have seen him etc.

Witnesses could be cross examined. I could check that they described Dawkins in the same way. I could find records at the university he went to saying there was a certain mister Dawkins who got examined there. All this combined with the fact that we know biology professors exist already. It does not take a huge leap of faith to believe a particular one by the name Dawkins exist.

God on the other hand is completely different. While the creationists could present so called evidence like nature in supporting their case, there would alternative explanations which are just as good. Combined with the fact that none of us see beings like god on a regular basis. It is more likely that a man like Dawkins exist because we already know for a fact that men exists. We met them many times before. We might even have met biology professors. However nobody has ever seen or met anything remotely similar to God, and that makes God that much more improbable.

Gambling, prostitution and drugs

2007-12-16T22:24:00.001+01:00

As a follow up to the previous post I want to highlight some other aspects of illegal activities not related to property ownership. As Hernando De Soto clearly explains in his book "The mystery of Capital", when the common peoples understanding of the law diverges too far from the official law, the official law stops being followed and stops having any meaning. The result is what corresponds closely to gangster rule. Since people are illegally settled and run illegal businesses they can't depend on the police for protection against thieves, swindlers, land disputes etc. Gangsters will take the role of police in providing protection and settling disputes. For the authorities fighting the gangsters became impossible because they are part of a whole world that is illegal. The people in the world are not going to help the authorities in fighting the gangsters because the authorities represent a threat to the common people. To the authorities their property and businesses are illegal so of two evils they will chose the gangsters.

This is hardly an ideal world and the common people would love nothing more than to be part of the official law if they could. Whenever they are brought into the official law, the gangsters lose their power because the police is allowed to operate normally again.

To me these observations about the problems of the third world also show a clear parallel to why we in the west have so much problems with drugs, gambling, prostitution etc. Just like with property laws in the third world, which are based on an idealized reality that doesn't exists and take no considerations to the peoples law, our laws on drugs, prostitution and gambling are also based on high ideals which have nothing to do with the real world. As probation showed in the 1930s USA, when you make laws which a significant part of the population don't believe in and don't want to follow you open up for gangster rule and crime. Gangsters and crime will always fill the vacuum left when the official law leaves. When the bars and drinkers don't get what they need from the authorities they will turn to the gangsters. The response from the authorities is always condemnation, blaming the people for lack of moral, criminals, aiding gangsters etc. The faint belief is always that strong moral campaigns, and stricter punishment will make people finally turn around and behave as the authorities want them to.

This is what I think is the problem with drugs and prostitution. A significant number of people will always want to do drugs. The legal system has to realize this and make laws that reflect that reality. This doesn't meant that I think everything should be legal. Surely because someone thinks it is okay to kill people doesn't mean that it should be legal. Even gangsters have rules, and don't allow you to kill anybody. The bosses at the top should sanction it and there should be a good reason. There will always be deviants. The law is not supposed to cater for any deviation, then there wouldn't be any point in having a law. But when something is sufficiently common and accepted it should be worked into the official law in some way.

Soft drug usage e.g. is so common that making it illegal serves no purpose anymore to make it completely illegal. Instead it should be brought into the official law and regulated. Take e.g. the dutch policy on soft drugs. It doesn't allow you to freely use and sell drugs wherever you want. Rather it provides a law that is close enough to reality that it get accepted by the majority of users. In Holland most soft drug users chose to be within the official law.

Prostitution has much of the same problem in my view. There has always been men paying for sex and women selling it. Laws should reflect that reality. When they don't it leads to a lot of crime. Gangsters make profit from prostitution. Prostitutes are subject to abuse and violence. It is not much different from a shop owner operating illegally. He or she will be subject to abuse and violence from gangsters or customers but can never report it to the authorities because he/she is already illegal and would risk losing his or her business if contacting the authorities.

Trafficking victims suffer the same faith. Because they are illegally in the country they will not contact authorities despite abuse. Had they been there legally they would never have been in that situation.

Again Holland dealt with part of this problem through extensive legalization and regulation of prostitution. But people don't always realize the benefits. They point to the fact that the number of prostitutes have indeed not declined. Or e.g. the example of sweden were buying sex was made illegal it was pointed to the fact that street prostitution had gone down as proof of success. However that is much like saying more severe punishment against squatters have led to fewer squatters. The question is, are the people who would have been squatters under milder regimes or the ones that are squatters under the new regime any better off? Probably not.

Likewise swedish prostitutes are likely not any better off, even if there are fewer of them. And in the case of Holland, and important fact is that even if there are not any fewer prostitutes in Holland, their lives are considerably better. They enjoy strong legal protection, they have police looking after them. Video cameras surveying the red light districts, alarm buttons to push if a customer is violent etc. All adding up the the fact that surveys have found, that dutch prostitutes are quite happy with their work. Now that is of course a very politically incorrect thing to say. It as if I feel guilty for saying it. But that is just the facts. But for some reason it seems like our society has defined prostitution as infinity misery in itself so that there is no gradation of it. It is all bad, so the only measurable improvement in the situation is merely how many there are of them.

It is just like with drug usage. We don't care about the horrible lives that junkies live. All that matters is how may of them there are. If we can reduce to number by 50% through draconian laws and punishment, then we deem it a success. Even if it means that the ones left get their live worsened several times over. In fact one of the problems, prostitution is in many ways caused by our failure to tackle the other problem. Of course there will always be prostitution, but the problem is exacerbated by the fact that many drug addicts can't find enough money for their habit without resorting to prostitution. Had drug usage been legal the prices of drugs would have been so low that prostitution would have been unnecessary.

Why capitalism fails in the third world

2007-12-16T21:33:00.000+01:00

Imagine a world were it is impossible to get a bank loan. You need a house to live in, but you can't afford one without getting a loan. No problem you think. I will just rent. But then imagine there is nowhere to rent in the area where you work and live. To a westerner this sounds like quite a hypothetical and unrealistic situation.

However this is in fact the situation facing most of the people living in the poor world. Getting back to the scenario, what you would probably do is to build some temporary living quarters on a piece of land. Except to further complicate the issue, you are not able to purchase any land to build on. Actually you can but it will take you 14 years to get legally. Obviously you need shelter now and can't wait that long. So you put up something at a location illegally.

From these simple principles it becomes apparent that you will run in to a whole host of problems. You probably can't put up a tent or something downtown or in the yard of someone in the suburbs. That would make you run into trouble with the authorities and local people living there. So you will go out of town and make a home out of the materials you can afford to buy cash right now.

I think what becomes pretty clear for any reader by now is that you will be living in quite a poor and shitty situation. You will end up living in a shanty without any proper road connection, sewage system, water, electricity etc. All this while you have a regular job making a good wage. This actually give a good description of the problems that face the majority of people in the poor world. It is not poor peoples lack of wealth that is the major problem. As in our example, you are not living in shitty conditions because you are poor, but because you don't have access to simple things like a bank loan.

Why this is the case is described in fascinating detail by Hernando De Soto, a Peruvian economist in "The Mystery of Capital". The book explains why capitalism works in the west but has failed everywhere else. His great discovery was that poor people actually has a tremendous amount of wealth but they are not capable of utilizing it. The reason why they can't get simple things like a bank loan is because they don't have official papers showing that they are owning the property they live on. Without security banks don't give loans. The poor can't get these papers either or obtain legal papers for any property.

To a westerner this might seem like a mystery. But the fact is that in many developing countries up to 70% of the population occupy their land illegally. The problem is that the law is written with complete disregard for reality. Complying with the official law is so difficult that people opt out. What De Soto found was that registering property, businesses, making property transactions official etc, had to go through dozens of government institutions and so much red tape that years could pass by. In many countries more than 10 years. This effectively rendered the official law useless for most people which instead have to live outside of the law, instead following their own made up laws.

I am not going to retell the whole book, but the main point was human laws are not that different from natural laws. Scientists don't make the natural laws they discover them and codify them. The provide elaborate descriptions of how the work. In the same way real laws are not made by legal experts but rather "discovered" and codified. Anywhere in the world the common people already have their own laws and customs governing their interaction. In the poor countries people have made up their own titles for land, their own way of solving property disputes etc. All the legal experts need to do is discover those laws and codify them. Laws made from the top without consideration to the peoples own understanding of the law will never be accepted.

This might sound like some exotic problem only related to the third world. However a couple of 100 years ago the western world faced exactly the same problems. America in the 1800s was a country basically filled with illegal squatters, just like third world countries today. Most people lived outside the official law, but that didn't mean they didn't have laws. They were just not official. The feat that the US and other western countries pulled off was to realize that the law of the people had to be codified and adopted in the official legal system. Countries that did this prospered and countries which failed to do so became failed states.

The Toyota Production System explained without management speak

2007-05-22T16:34:00.000+02:00

The Toyota Production Sytem (TPS) is explained as a sort of philosophy. We are given rules to follow. The problem with this is as with any commandments, we do things without knowing why and because we don't know why we frequently do the wrong thing.

I believe TPS should be explained as an optimization approach. To better understand what the optimization is I suggest an analogy that is easy to mentally picture and which correspond as closely as possible to real production.

Water tank analogy
Production can be compared to control the flow of water in and out of a water tank. Water flowing into the tank can represent finished products or work in progress. The tank itself represent factory space allocated to inventory or buffers. The water in the tank represents the finished goods or work in progress stored.

Water flowing out represents sales of finished products or work in progress going into the next machine for further processing. On both tubes going in and out of the tank have different diameter. For incoming water this usually represents maximum production capacity. For outgoing it can mean the same or maximum demand for finished products by the market.

On both tubes there will be valves that control the flow, from either no flow to max flow or something in between. For the different valves one has different control. The production valves can obviously most of the time be turned up and down and will. The demand valve on the other hand is totally out of control for the factory. But even the production values will not be under full control because machines:

Break down occasionally

Need maintenance

Have irregular production speed

Optimize flow and water level
There are two elements in in this setup which needs to be optimized. That is the flow of water out of the tank and the water level in the tank. Water flowing out can represent sales or goods going to further processing. So naturally we want this as high as possible otherwise we lose sales or lose production capacity.

We also want to have the size and the water level in the tank as low as possible. We could pretend that the weight of the tank and water represents capital bound in work in progress, finished goods and factory floor space consumed. Capital is of course not free. If we assume it was borrowed we have to pay interest on it. Thus the more we have of it the more we money is spent on paying interest.

So while water level represents cost, water flowing out represent income. We need to find a balance to generate as much revenue as possible.

Two extreme approaches
There are two extreme ways of optimizing this problem. Either ignore the water level and seek to bring the flow out to the max. Or ignore the flow out and seek to have the water level as low as possible.

Traditional Production
Traditional manufacture represents the first approach. To get as utilization of machines or sales as possible, one builds huge tanks and allows the water level to reach enormous levels. This creates a lot of weight from the tank and thus a lot of costs. The problem with this is that squeezing out a little more production or sales when one already is at high utilization requires disproportionate high water level. The same is known from queuing theory. For the shopkeeper to be fully utilized the queue of customers have to grow extreme.

Misunderstood Just In Time Production
In the other end of the specter people have gotten so obsessed with cutting inventory that according to our analogy they entirely removed the water tank. In case of sales, one can now never sell more than maximum production at any given time. A lot of sales are lost or alternatively a lot of production capacity is lost. Cost is reduced dramatically, but sales is reduced even more dramatically. This conclude that TPS doesn't work and leave it.

Real Toyota Production System
The optimal solution is of course something in between. One can do this by regulating the water level in the tank at a certain level. Then we don't get as much water in it and we don't need to make it so large. This reduce costs. When water level starts falling we increase flow of water in (we increase production). When water level increases we reduce flow of water. In a few instances the tank might run empty. But because it is seldom the amount of lost sales or lost production capacity is minor. On the other hand the low water most of the time leads to low costs.

So how large should the tank be and what should the water level be? This all depends on the irregularity of the outflow of water. The more regular the water flows out the smaller we can make the tank and water level. This is perhaps the key insight of TPS: It is the irregularity that decides water level. If we want to reduce water level we have to reduce irregularity.

Some places we can reduce irregularity and other places we can't. Between machines we can reduce irregularity by letting in-tubes and out-tubes have very similar diameter and by making sure that valves don't open and close too frequently out of our control. On the factory floor this corresponds to getting machines that are more compatible with each other in production speed and which are more dependable. They can be made more dependable by either getting better machines, maintaining them better or drive them less hard to avoid breakdown. Getting very high output in periods is worthless if it creates more breakdowns because that creates irregularities which require higher water level.

But in some places we can't affect irregularity. There is nothing to do about the random fluctuation in product demand.

From this it becomes obvious that in some places we need larger water tanks and higher average water level than other places. Specifically we need more inventory for finished goods than for work in progress.

But also if no dependable machines exist for a certain production step we need to have a bigger buffer.

The tree steps of TPS
For this reason I suggest 3 steps for implementing TPS. Note this is not Toyotas own recommendation but my own based on reinterpreting what TPS is all about in terms of a optimization technique similar to regulating the flow of chemicals in a chemical process.

Identify the irregularities. This can be done by reducing lot size or as in the water tank example by reducing the size of the water tank and the water level. On will quickly discover were irregularities exist because flow of water will stop in parts of the system.

When irregularities have been identified, determine which ones one can do anything with and try to replace machines, improve their maintenance etc at the problem areas.

Reduce buffers or lot sizes in the areas were irregularities have been reduced but retain buffers were no reduction of irregularities was possible.

By following these steps it should be possible to improve the production process without going to extremes that will just hurt the process. However trying to balance machines with each other and reduce irregularities will lead to periods of production loss, while one figures out what needs to be improved.

The God Delusion

2007-05-07T11:29:00.000+02:00

In "The God Delusion", Richard Dawkins makes a frontal assault on religion. Dawkins is well known oxford biologist who have written some of the best known books on evolution. "The selfish gene" is perhaps his best known book. Personally I think it is one of the best books I have ever read. The God Delusion is also a very good book in my view. But I still have trouble deciding on what exactly to think of it. At some passages you start thinking that Dawkins is perhaps a bit unreasonable only to change view shortly after when his position becomes clearer.

Perhaps for this reason the book has become controversial. That I call it a frontal assault does not mean that Dawkins is unreasonable or disrespectful. Dawkins still comes off as a friendly and respectful person. But it is in the nature of the topic that it can't be discussed without offending some people.

Preaching to the choir?
Many people dismiss the book as preaching to the choir. And that is perhaps true. But that doesn't make it irrelevant. I did for a moment when starting to read it wonder why I was reading it. "Who is he trying to convince" I thought, "I am already an atheist". But as I kept on reading Dawkins won me over. It is not just about whether God exists or not, but also about why so many people believe in God, and a great awareness raising about the damaging effects of religion. Before Dawkins I was not fundamentally anti-religion. I thought if people want to be believe in God, sure why not, whatever makes your boat float. As long as you don't bother me I am all cool about it.

The damaging effects of religion
But it is not that simple. If religion was just a personal choice you did later in life when you have considered all options it would perhaps be harmless. But this is not how it works. Religious "indoctrinate" their children to their religion. The kids are never given a choice. It was saddening to read stories from many letters of people who told their stories about how their childhood had been filled with fear because of religion. The fear of going to hell. The fear of God seeing every little wrong doing, even wicked thoughts. For some religion has such a strong grip on them because it was feed them at such an early age that they have real problem getting out of it.

And I can actually relate to this myself. I was never really raised in organized religion. But I was exposed to a lot of super natural phenomena. I remember being quite afraid of ghosts, poltergeist and other supernatural things. As I started studying science, my belief in these things started fading and I found it a great relief. And Dawkins book just reinforce this feeling that for many people atheism is in fact a great relief. Religion represents a cage for the mind in so many ways. It is not just fear of hell and damnation. Just something as simple and natural as sex, which human beings were constructed for. We were made to enjoy it. Yet religion has put our desires in a cage, telling us it is a sin. Making it impossible for many humans to truly appreciate intimacy without being riddled with guilt.

Dawkins doesn't merely state the case for why there is no God. But he makes you realize that is okay to be an atheist. It is not something to be ashamed of. It is something to be proud of and it doesn't mean you can't have any morals. He shows the way to how you can see the beauty in life and living a good and moral life without a God. Something I never quite thought was possible before. I must confess I had somewhat of a cynical world view were nothing mattered. But Dawkins has an almost religious admiration of nature, its complexity and beauty. Many people have often mistaken Dawkins for being religious because of his almost poetic way of talking about nature.

How religion came to be
But even if non of this matters to you I think many would find Dawkins explanation of why so many people believe in Religion and how religion came to be, very interesting. Dawkins has some fascinating ideas related to meme theory. A meme is a piece of information: an idea, a word, a concept much like a gene. Like genes it mutates and spread in the population. The idea came to be when one observed that languages develops and mutates much the same way as genes. Methods to analyze genes can even be applied to language. Dawkins compares religion to the moth flying into a flame even though it is certain death. Why do we engage in such harmful behavior? Like the moth, it is an unintended bi-effect of another beneficial behavior (navigating relative to distant light sources). He also compares God to the fact that children frequently have imaginary friends. To them they are quite real and important. And then there is a very interesting story about the so called Cargo Cults: Religions that we have been able to see being created and developed from the very start. Unlike Islam or Christianity were our knowledge of the beginning is quite fuzzy.

Born again atheist
To lend some vocabulary from the religious I think Dawkins book made me a born again atheist. I realized more clearly than ever before why religion is a bad thing and we should actually fight it. Religion should not be given the respect it is given today. As Dawkins points out if you do hate speech or make racist remarks publicly then you are not tolerated. But as soon as someone claim their views to be religious they are to be respected. Because religion needs to be respected. A boy walked around at school with a T-Shirt that said: "Homosexuality is a sin, Islam is a lie and abortion is murder". The school asked him to not wear it, but they couldn't because the court ruled that he should be allowed to because of freedom of religion. What would normally be treated as hate speech can pass because you tag it as religion. And you always got to respect religion. As the Danish cartoon controversy showed. Respect for religion trumps anything.

Criticism of Dawkins
While people might be justified in saying this is not his best book ever and it might be preaching to the choir, a lot of criticism of his book seem to make the same mistake as they claim he is doing. E.g. he is criticized for not knowing enough about theology. Thus he is apparently criticizing something he doesn't know enough about to have a sound opinion on. Except the people who makes these claims can't possibly have read the book fully. As Dawkins anticipated this criticism in his book and replied to it. Just as he anticipated several of the other types of criticisms leveled against him.

There are two popular criticisms against him:

Religion is no worse than atheism because non religious movements have caused equal amounts of suffering. To this Dawkins replies in the book that while ideologies like Nazism and Communism caused a lot of suffering they did not cause this suffering in the name of atheism. Atheism or the lack of belief in God was not used to justify wrongdoings. The ideology was used for that. With religion on the other hand, injustice is done in the name of God. Communism and Nazism would have done the same harm whether the proponents were strong believers in God or not. Atheism had nothing to do with it.

He does not know enough about theology. It is funny how religious people always seem to think they are entitled to have a strong opinion about the theory of evolution despite having no training in the field. But Dawkins should not be entitled to have an opinion on religion because he is not a priest. But there is a major difference. Religion is dogma. It has no scientific basis. You can't dismiss someone's opinion on pink unicorns just because they are not scholars on pink unicorns. I only need rudimentary knowledge about norse mythology to be able to conclude with certainty that it is rubbish. And yet what the religious people are saying is that I can't do that. I need to have in depth knowledge of the mythology. Know about everything written about it. Biology on the other hand is a science, with wealth of evidence backing it up.

Conclusion
The book is probably not going to convert any born-again christians or other strong believers, even though many people seem to think that is Dawkins mission. But then they didn't read his book properly. Dawkins says on the very first page:

As a child my wife hated her school and wished she could leave. Years later, when she was in her twenties, she disclosed this unhappy fact to her parents, and her mother was aghast: "But darling, why didn't you come to us and tell us?" Lalla's reply is my text for today: "But I didn't know I could." I didn't know I could.

I suspect - well, I am sure there are a lots of people out there who have been brought up in some religion or other, are unhappy in it don't believe it, or are worried about evils that are done in its name; people who feel vague yearnings to leave their parents' religion and wish they could, but just don't realize that leaving is an option. If you are one of them, this book is for you.

"I don't like to stand next to an American"

2007-05-07T10:56:00.000+02:00

Yesterday was a high school reunion. I met people I haven't seen in 10 years. My best friend from middle school which I have barely seen from that time made a career in the army. He served in Bosnia among other places.

He made a comment about his experience from peace keeping operations in Bosnia, that I think goes a long way towards explaining the mess America got itself into in Iraq. Where ever there is a peace keeping operation he said he preferred not to stand next to an American. I asked why. "Because American are the ones who usually get hated and those who hate Americans are bad at aiming", was the reply I got. So I asked "why do they hate Americans?" American soldiers walk down the street in full armor, sunglasses, their guns ready and then ask at the end of the street "Why doesn't anybody talk to me?"

This is actually not the first time I heard such comments. Other friends of mine have served in Kosovo with soldiers of different nationalities. And as in Bosnia the American soldiers were the ones sticking out. They were the ones scaring the local population walking around in full military gear with their guns ready, while other soldiers walked around in light uniforms with no guns and tried to interact with the local population. Every time the story is the same: American soldiers have no understanding of other peoples culture. And they don't even seem to try. But everybody agrees that the American military is a formidable fighting force.

I read many letters from American soldiers in one of Michael Moores book "Will they ever trust us again?". As an example of what some of the soldiers say. A soldier named Jacob A. Brooks wrote:

I went to tech school during the beginning parts of the war in Iraq. While there I was involved in such activities as protesting anything French related and screaming "Bush... Bush.. Bush" at the top of my lungs. Most of this was led by my instructors. They'd gather us together and give us the famous "F... this and F... that speeches. They led us in making fun of the French by calling them cowards and other nonsense. Throughout it all we kept on hanging from Bush's left nut.

Needless to say after reading some of these letters to more by American soldiers it dawned on my why American occupations go so wrong. The soldiers are trained to be killing machines and be full of hate. Understanding your surroundings and other cultures is pushed to the bottom of the priority list. The result is predictable. An army that can destroy any opponent in no time but is incapable of winning the hearts and minds of the people in the country occupied.

This is indeed a sad development. The American GI used to be the hero. The easy going soldier that handed out candy to the kids. During WWII American soldiers were known as the best liked ones by the local people. And it showed. The WWII occupations were big successes.

So what happened. Where did they go wrong? Perhaps they were a victim of their own success. Studies from WWII showed that the majority failed to kill the enemy when face to face. They simple couldn't pull the trigger. This is supposed to be something hardwired into most species, an aversion against killing your own species. Up to the Gulf war the military has improved this statistic dramatically. By extensive physiologic training (brainwashing?) and demonizing of the enemy they have manage to make the majority willing to kill the enemy face to face. This is unprecedented in modern history.

Perhaps in the course of this "success" they lost the soldiers capacity to show compassion for the enemy. By that I mean that while it might not be necessary to show compassion for enemy soldiers it should be necessary to show compassion for civilians who are of the same race or nationality as the enemy soldiers. But such distinctions might easily be too complicated for the army to sell. It is much easier to depict all Iraqis as non-human, rather than just Iraqis soldiers.

Or perhaps the problem is that the American political leadership, especially the neocons never thought America would need to act as occupants. That overthrowing the regimes you don't like would be enough. That the people would take care of the rest themselves.

Employers dilemma

2007-05-02T15:20:00.000+02:00

On wikipedia one can read about the prisoners dilemma. The classical prisoner's dilemma (PD) is as follows:

Two suspects, A and B, are arrested by the police. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal: if one testifies for the prosecution against the other and the other remains silent, the betrayer goes free and the silent accomplice receives the full 10-year sentence. If both stay silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a two-year sentence. Each prisoner must make the choice of whether to betray the other or to remain silent. However, neither prisoner knows for sure what choice the other prisoner will make. So this dilemma poses the question: How should the prisoners act?

The dilemma is that it is best for both to cooperate, but in practice most will choose not to because they can't thrust that the other will cooperate it is thus safest to rat the other one out.

Inspired by thought from the previous post I suggest a Employers dilemma: The economy goes up and down. Sometimes demand is high and there is a lot to do, and sometimes demand is low and there is little to do. Should the employer keep an employee in bad times or fire him? Likewise an employee has the option of staying in good times or quit and work for a company that pays better.

So for this thought experiment we consider each part have two choices. The employer has the choice "keep" and "fire". The employee has the choice "stay" and "quit". Over a certain time were the economy goes up and down the combined benefit for both employer and employee will be best if employer chose "keep" and employee choose "stay".

So cooperation is the best choice for both. However for the employer it is very tempting to fire the employee in bad times. He will make more money if the employee stays in the good times but is kicked out in the bad times. Likewise it is very tempting for the employee to quit in the good times and stick around in the bad times.

If employer and employee can't trust each other they have to play their safest card which is "fire" and "quit".

As mentioned in the wikipedia the prisoners dilemma can be played as an iterative game. Meaning one can make choices based on how the other player played in the previous game. It shows that in games were players chose to screw each other early on quickly degenerates into a game were nobody ever cooperates. The most successful strategy is to try to cooperate in the start and then retaliate if someone doesn't.

If one views the workplace is an iterative game of this type. It is clear that to foster cooperation which is the best for all one has to go forward with a good example early.

An assumption in the game is that cooperation has the largest total benefit, but is that true? I believe it is reasonable to assume that. If you can trust your employee to stay you can also invest a lot of resources in training of that employee and make him/her much more productive. This means the employer makes more money and he/she can thus pay the employee a higher wage. Even if there was no benefit for extensive training any job requires some training and having to retrain people all the time because of high turnover is not economical.

The game might explain why cultural traits are hard to change. If the American workplace corresponds to a iterative prisoners dilemma game were people are used to getting screwed by the other one would be stupid to play the cooperation card. Anyone who does will lose because nobody else does it, and they will soon revert back to screwing the others. In a game of many players what is the best strategy depends on what most do. So in e.g. Japanese work place were cooperation is the norm, screwing the other might be a benefit, but for most cooperating will still be worth doing because the majority is already doing it.

Thus a culture will quickly be self enforcing. Making changes might require great sacrifice without any guarantees of success. E.g. you will have to let yourself get screwed repeatedly hoping that in the end it will change other peoples behavior. But if the other people have become too cynical they will view you as stupid or naive and continue to screw you.

Toyota: the company analogy to a welfare state?

2007-05-02T14:43:00.000+02:00

Intro
Today American style capitalism is marching victorious through the world. We are told that the only true way is the American way. All other capitalist systems are doomed to fail in the end. Europe must give up its employee protection and social welfare programs, because they are inflexible and hinder growth.

One points to examples like Ireland which have liberalized in American direction with its spectacular growth and point to the sorry state of France and Germany. One might easily conclude that the welfare system does not work. But what always bothered me about this simple explanation is that it can't explain the economic success of nordic countries. Nordic countries are still able to produce high economic output despite high taxation, generous welfare benefits etc. Is this just an abnormality?

What can we learn from Toyota about society?
At the moment I am reading a book about the car company Toyota: "The Toyota way". It might gives some clues. Toyota is a spectacular company. Its success is astonishing. They develop car models 2-3 times as fast as the competition. They have earnings 8 times the car industry average. The quality of their cars is way above the competition. By that I mean the percentage of cars that experience trouble or need repair later. Productivity is also much higher than in other companies.

Myths about Americans and Japanese car manufacture
What is the key to this enormous success? It is easy to imagine that imagine that it has something to do with the japanese working themselves to death. That they work much harder and faster than people elsewhere. That in style with the hierarchical japanese society the workers are like slaves obey the orders of their corporate masters to every little detail thus producing products exactly according to specification.

Americans on the other hand are seen as a ragtag gang with creativity, individualism and easygoingness. So they must be behind the japanese in car manufacture because they are an unwieldy bunch right? If only they were obedient like the Japanese it would all work out. If only they did as they were told. What is needed is more force and more discipline right?

Reality
Wrong on both accounts! Reality is almost exactly reverse. Workers in American car factories are the ones who frequently overwork themselves. It is in American car factories that the superiors try to force employees to do their task in minute detail. This is all in the spirit of Scientific Management or Taylorism pioneered in America. Workers are seen as machines that need to be told exactly how to operate by their superiors. They should not think for themselves.

Does this mean that in Toyota everybody do as they please and the bosses don't do anything? No, the difference is that in Toyota there is the notion of best practice. Superiors distribute a template for how to do things in the best way. But this is just a starting point. It is something the employee is encourage to improve on. Taylorism on the other hand says there is only one right way to do it and you should deviate from it.

There is a lot more to the Toyota system, and I can't cover everything here. It is better to read the book. What I want to focus on are the aspects related to the welfare state.

When Toyota started production in the US in the 80s they did this in partnership with GM. They took over a GM plant that had been plagued by wildcat strikes from a militant labour union. GM had managed to throw out the leaders of the trouble makers, but it was by no means a stable plant.

Contrary to all logic and against GM's insistent advice Toyota actually let the union leaders come back. They let the very people who helped cause a lot of the trouble come back. Like others a the time the unions were very skeptical towards Toyota because they though the Toyota system was all about forcing the workers to work harder. But instead of fighting the unions through force, Toyota tried to win their support. They took the leaders to Japan for them to see that Toyota car manufacture plants are based on work yourself to death ideas.

Over the years Toyota showed their commitment to the community and their workers. In bad times when other companies would fire workers Toyota would keep them. Toyota would see to that workers were not overworked etc. Over time they won their respect. The Toyota plants turned out to be the plants in the US with the least amount of labor disputes. The troublesome factory that Toyota got from GM dropped to zero labor disputes. Despite the fact that the so called militant union was still there.

A Toyota worker gives a 100% for the company because he/she knows that the company stand behind him/her. Employees know will not be fired as soon as there is a slump in demand. The company is loyal to the employee and the employee is loyal to the employer. As a manager in Toyota mentioned in the book: Companies today talk excessively about how their workers are their most important resource. That they prioritize people etc. And yet this is all talk because as soon as there is a downturn people are fired to save money.

Short term vs long term
Keeping employees in bad times might not make short term economic sense. But it does in the long run as it builds loyalty. In another book I read about a Japanese starting a company in the US he noted one big difference between Japan and the US: People quit their job too fast. As soon as his company had finished training their employees they quit for better jobs. The turnover rate was a 100% in the course of a year. Meaning in one year all the employees hired at the start would be gone.

Of course this makes sense. Why would people bother to stay in a company if they can make more money elsewhere? The only thing to counteract this is loyalty. If employees are loyal they will not quit. But how do you build loyalty? Americans are probably not loyal to their company in general because they know the company would fire them as soon as they were not needed so why should they stay loyal to the company when it is not loyal to them?

Examples
I heard similar thoughts from my brother. He worked for an American company. And never before had he started to act so disloyal to a company before. Why? Because over the course of employment they never showed him any loyalty. They would screw him over money for petty little things, like a day of sick leave etc. They would be control freaks, not thrusting their employees own judgement. The company seemed to believe that employees needed to be monitored and told what to do all the time.

Until I read about Toyota I thought the sense of loyalty was embedded into the culture and could not be exported. However Toyota showed they could manage to make their American car factories operate just as efficiently as their Japanese ones. They showed that through example one can also build loyalty and trust between workers and employees also in America.

For Norways part I know of similar stories. One of our big shipbuilding companies Kvaerner bought a large shipyard in the UK. It was dysfunctional and running with huge losses. Like the US, the US has quite militant unions. Thrust and loyalty between employers and employees is often low. The Norwegian shipbuilders were shocked to find this. But gradually they managed to build thrust and get the Yard up and running again.

What can we learn from this
It is of course too much to let the welfare state system take all the credit for Toyotas success. There are much much more to Toyota than just trust and loyalty. For instance the Just in time production system and many other things. However it does illustrate well that a company that does things contrary to standard capitalist theory can still thrive. It is not because economics as a field is flawed but because many theories today are simplified and idealized models that don't take into account thing like loyalty and trust.

Higher flexibility in the labor market in Europe makes sense in the short term. But in the long run firing and hiring workers at a whim creates resentment, dishonesty, disloyalty and distrust.

However I am still not in favor of a too rigid system. The best is if the companies like in Japan see keeping workers as in their own best interest. Sometimes there are structural changes in the economy so that less workers are actually needed in a field. Keeping employees around in a company which is in a marked that will never go up is folly. But it is equally stupid to fire workers just because of a short time temporary slump in the market.

Gangster rule

2007-04-30T02:03:00.000+02:00

Yesterday I watched a program on NRK (Norwegian Broadcasting Channel) about property rights in contemporary Russia. Two things struck me. The beauty of parts of Moscow and the rottenness of society. We met a women and a mother owning a family restaurant, a guy running a cement factory an opera director, a DJ and en entrepreneur. The DJ and the entrepreneur essentially representing two bad guys and the others victims. It was about how regular people get squeezed in Russia today. Business are taken by force. Property is stolen through falsified documents. When you don't give in they burn your house down or worse. The program saddened me. The Russians don't deserve this. They have lived through so much shit. It never seems to end.

One might be tempted to think that these are just a few sporadic incidents. But I know personally that this is all too common in ex-communist countries. A Romanian friend told me not so long ago bitterly about how their property had been stolen through false signatures. They were not a rich family. Their grandmother had bought up a small plot of land for all her savings. Hoping it would be a good investment. As soon as it turned out to be valuable because the city was going to expand in this area, others apparently got interested. Property right papers were falsified and their property stolen. Little help is to be gotten through the legal system. The case drags out in court. Depleting them of money they don't really have.

Which is what seems to be the problem in all these cases. There is no rule of law. Government is corrupt and will side with crocks for bribes. It is all about connections.

Even in the more well functioning and modern communist countries this happen. My previous landlord runs a business in Czech Republic. He tells me stories of dishonesty, hostile takeovers and Russian gangsters. Nobody trusts anybody. Everybody cheats everybody. He tries to set a good example by showing trust to his employees. But it is not easy when thrust is almost seen as stupidity or a weakness.

So many of my friends from non western countries have so many stories about corruption, about politicians that care about nothing else but to line their own pockets. I often get called naive by them. But my world is not like theirs. I am used to honesty and the rule of law. The Romanian girl told me: You are not from the real world. Maybe she is right. The more I hear about the insane things happening around the world the more I wonder whether Norway is indeed a real place.

Capitalism more than privatization
The great economist Milton Friedman was asked once what Russia should do once communism was gone. He said something to the effect of "privatize, privatize and privatize". He thought somehow that by turning property and business over to private hands everything would turn out good. It didn't. And he admitted that himself in retrospect. What Friedman did was to forget what Adam Smith wrote 250 years ago.

Adam Smith noted how the North American colonies prospered so much more than the ones in South America. Even within North America there was a division. British colonies prospered by far much more than colonies from other nations. Why this difference? The others were no less well endowed in resources than their British counterparts.

Every man equal before the law
The crucial difference Smith observed was the rule of law and property laws. In British colonies every man was equal before the law, whether rich or poor. In the South American colonies like todays Russia, the law only protected the rich. Those who had the money to bribe and had the right connections. In South America a few rich people could also claim vast tracts of land, while in british colonies you could claim no more land than you could grow. Thus almost every man was given the chance to own his own plot of land and could fully enjoy the fruits of his own hard labour. Because there was a rule of law, this land was protected from rich and powerful people and the little man could start business knowing that the law protected his property and business. South Americas problem wasn't the lack of private enterprise. It was the lack of law.

It is striking that despite our very advance mathematical economic models today, understanding of economics seem often to fall short the insight Adam Smith had so many years ago. Capitalism isn't about private ownership of property. Capitalism is about the rule of law and strong protection of every mans property. It was first and foremost a strong tradition of law that made modern capitalism and the industrial revolution happen in Britain. Perhaps it strong legal traditions all the way back to Viking times which allowed Scandinavian countries to prosper in modern times?

Turbo capitalism
Capitalism in Russia has often been called turbo capitalism, raw capitalism and other derogatory words. I strongly object to this characterization. As it seems to imply that the problem in Russia is that there is too much capitalism. That there is no restraint on the market. When the the exact contrary is true. Capitalism does not equal lack of laws and a society run by greed, violence and corruption. We have a better name for that: Gangster rule. The fundamentals of capitalism on the other hand is the rule of law and strong legal protection of property.

Unemployment

2007-04-01T00:59:00.000+02:00

Unemployment can be have many different causes they say. It can be cyclical, structural, classical, marxian etc. Cyclical is supposed to be because of lack of demand, structural because people don't have the skills for the advertised jobs and classical because the wages are too high.

I think this is a over complication of the issue. And I think it exists because there are so many people with political agendas with regards to unemployment. For any other product in the economy one would not make up such convoluted explanations.

If one compares unemployment to not being able to sell enough units of a certain good then this can be explained in the following way: number of units sold and price is determined by the intersection of the demand and supply graphs. Both demand and supply determine number of units sold not just one factor. Which I think is the problem with the unemployment explanations which try to narrow it down to just one factor.

If too few units are sold one could say that that is because the demand is too low. That would correspond to cyclical unemployment. But it is equally valid to say that too few units are sold because the price is too high. Which would correspond to classical unemployment. A third person might argue that too few units are sold because you are selling the wrong product. You should be selling something else with which there is more demand for.

In all these examples everybody is actually right. It all depends on perspective. Since every explanation is equally good, different groups will chose the one that best fit their agenda. The buyers (employers) will say it is because the product cost too much. The sellers (workers) will say it is because there is not enough demand. While a third party observing the whole thing might suggest that it is because the seller is selling the wrong product.

Since every explanation has equal merit, one should not be caught up in who or what is to be blamed. Instead what is of interest is what action will be most effective in reducing unemployment.

If we compare to good sold again the question is how to we increase the number of units sold, while at the same time making a decent profit. If profit was of no concern we could simply give away our products (work for free).

First option is reducing the price. This can be done in two ways either by reducing our own profit or by doing cost reductions which will give the same profit but lower price. In labor market terms this corresponds to either accepting a lower wage or work longer hours or more efficient. If this is effective or not depends on price elasticity. If consumers wont buy more goods unless the price is dropped considerably this is a bad strategy.

Second option would be to sell another product. If we can find another product that more people are willing to pay for and are willing to pay a good deal for than this is a good option. Of course it is limited to what we are capable of making. In labor market terms this means getting different skills.

Both first and second option is about things you can do yourself. Increasing demand for a product is typically now within ones power. Either other people have to develop different tastes, or get more money from increased wages or tax cuts. Whether government should do this or not depends on how people are likely to spend their money.

If money from tax cuts are saved or used for other things then sales will not increase and this was a bad measure.

Friedman's laissez-faire an unrealistic dream?

2007-03-22T19:24:00.000+01:00

For a brief moment one easily gets sucked into Friedman's reality distortion field about the wonders of laissez-faire economic policy. One wonders can the private enterprise actually solve all the issues that government frequently does today?

Hong Kong is Friedman's model society. So I started reading up on it. What would it be like to live in a society seemingly modeled after Friedman's ideals? That quickly became disheartening. Not only is wealth distribution terrible but most Hong Kongers aren't even in favor of it.

Looking at other super capitalist societies like Singapore and Chile shows similar reality: terrible wealth distribution. I guess it goes to show that you can't have a cake and eat it too. The Friedman model might create unprecedented growth but it can't do so without great inequality.

Nor does Friedman's argumentation that the free market and democracy goes hand in hand. Quite the contrary when people are allowed to chose they will never chose a Friedman society. This is both the experience of Chile and Hong Kong. If government hadn't forced it upon them they would never have chosen it in the first place. One might think people are stupid and don't know their own good. But even after they have been shown the pros and cons they reject the idea.

The free market does not seem to be a prerequisite for democracy either. The socialist countries in eastern Europe all transformed from socialism to democracy right? It rather seems to be the other way around. A democracy can't exist without the free market.

Now, one might argue that the only thing that matters is equality of opportunity and not equality of outcome. And that by sacrificing even wealth distribution today the "have nots" of today will be the "haves" of tomorrow. Of course that only works if you believe absolute wealth is the only economic factor that determines peoples happiness. And as pointed out in earlier blog posts research shows that wealth distribution does affect peoples happiness.

Perhaps this is why politics is so difficult because their is no one right solution. The only thing we know is that extremity at either side of the spectrum whether socialist or capitalist doesn't work.

Is IKEA a socialist idea?

2007-03-22T02:16:00.000+01:00

In a moment of clarity it seemed to me from reading Friedman that IKEA is essentially a product of socialism (socialism in the American meaning of the word). Friedman himself never makes this connection in his book. But it is something that dawned on my when reading a passage about the results of high taxation. Sweden was mentioned as an example.

What was said was that Swedes didn't object against taxes through their voting, but rather through their actions. Sweden has become a country of extensive barter, service exchange and a do-it yourself society.

The reason for this being explained as being because of high taxes hiring people to do a task costs too much. Thus you can save money by doing it yourself or doing one favor for another person in return for another favor.

It occurred to me that that pretty much describes Norway as well. I always attributed the do it yourself thing as a sort of national trait. Not the result of taxation. I simply assumed that in Scandinavia we liked to do things ourself. I think about tasks like painting your walls, making simple shelfs etc. We all know that that is prohibitively expensive to get someone to do. I never took the thought one step further to reason why it was so expensive. It probably is because of all the taxes. The carpenter has to pay sales tax, income tax, employment tax and what not. Doing work favors for each other also has a long tradition in Norway. I always thought of it as some sort of ideal about being helpful towards each other. It never occurred to me that this is essentially a tax evasion scheme.

These thoughts lead me to IKEA. With the Scandinavian tradition of doing so much stuff yourself to avoid taxation, it seems natural that a company would try to capitalize on this. By providing furniture only half finished taxes are paid on only half of the work done to make IKEA furniture. Since we do the assembly ourselves we avoid the extra cost of taxes on the the work of someone assembling the furniture for us.

Finished Friedman

2007-03-22T01:32:00.000+01:00

Okay, so after an intense reading period I finished reading the "Free to Choose" book by Milton Friedman. It is strange how short time it takes to read a book when you find it interesting. It took me two days, while books I was forced to read at high school would take me weeks.

I think I might have changed my original assessment of Friedman. I think from growing up in a Social Democratic country many of Friedmans ideas are quite hard to swallow at first. The idea that society needs a lot of regulation is quite ingrained in my way of thinking. It is hard to imagine houses being built without any regulations specifying standards or food to produced without any government standards on hygiene and food preparation. Or that you can go to a doctor without government approval or certificates.

That this wouldn't lead to malpractice and houses falling down requires a great leap of faith. Friedman's basic idea seems to be that private companies will come into existence to provide the services government earlier did. These companies will provide us with information about the standard of different houses or perhaps create an approval system for physicians etc. Whatever we need to be able to make good choices as consumers.

But even if some regulation might be needed Friedman does give a lot of examples of superfluous regulations that seem to have no benefit to us as consumers. Rather they are there to benefit special interest groups. The extent of this is what leads me to wonder whether Friedman is perhaps right in that barely any of these regulations are needed. We have just grown so accustomed to them always being there.

Friedman and Education

2007-03-21T20:01:00.000+01:00

One area that Friedman talks extensively about is Education. Which also happens to be one of my pet projects. What is wrong with education today, and how can we fix it?

Here as many other areas I think he is very quick to put the whole blame on government. While a lot of his argumentation makes sense. He doesn't acknowledge that government controlled education can in fact work quite well. For instance if the government interference into education is only bad, how come countries with far less private schools and school choice still manage to achieve very good school results? E.g. Finland?

Although what speaks in Friedman's favor is that he argues in favor of more local control. That there should be less centralized decision with regards to education. And this happens to be the case in Finland even if it is under a government controlled system.

A second point Friedman mentions is that when people spend other peoples money on other people the results are not very good. If I buy lunch to a random person with money from another person I will naturally not care so much about getting the best lunch for that person or to economize on the money spent as if I bought the lunch for myself with my own money.

Friedman brings this over to the realm of education in arguing why free government education is bad. The argument essentially being that since you don't pay for the education you wont take it that seriously because you loose little and the institution wont care much about you because you didn't pay them.

But there are several facts here overlooked by Friedman. E.g. going to University in Norway is free, but it is by no means free to be a student. Living is not free. Comparing to my studies in the US were I had to pay tuition fees I probably payed less there in total to be a student than in Norway because of lower living expenses. So even if there is no tuition it does not allow a student to be indifferent to his education.

Furthermore even if education is not payed for by the government it doesn't mean that it is payed by the one taking it. Few of my peers at the University in the US seemed to pay university themselves. Rather their parents paid it. Consequently a lot of them didn't seemed to take the studies very serious. In fact their results probably mattered less to them than to me. I knew I had to repay my student loans to government eventually in the future. It was not free money. My peers on the other hand did not seem likely to have to repay their parents in the future.

Just one of the examples where Friedman in his eager quest to demolish government seem to overlook other possible ways for market failure.

The problem is with monopolies not government per say. Although government often act as a monopoly. Health care provided through your employer were you can not chose your service is probably less efficient despite being private than a national health care system provided by the government where user can freely chose their hospital. The former is a monopoly the later uses the market mechanism.

Free to choose

2007-03-21T19:35:00.000+01:00

I haven't finished reading Milton Friedmans book "Free to choose" just yet but I haven't quite been able to put it away so I have read quite a lot. Since Milton Friedman is quite well known contemporary economist with quite vocal political opinions I was interested in reading him. Not at least because he won the Nobel Prize which kind of gives a certain quality stamp. You know he has to be intelligent and must know what he is talking about.

Despite writing quite well I can't help but continue my admiration of Adam Smith from reading Friedman. I still found Adam Smith more interesting to read and I also found it astonishing the depth and breath of Adam Smiths knowledge. It is just amazing all the little pieces of information he can spin together and how he manages to combine so many different disciplines like economics, history, psychology, social sciences and philosophy.

Like Smith, Friedman gives a strong argument in favor of free trade. While Smith gives examples from his time to support his arguments, Friedman gives examples of the present day which is equally interesting to read. Actually it is not quite the present since it is from the 80s. In a sense though that just makes it more interesting because you can compare his prediction from that day to realities of today.

For me it is also interesting to read about the American welfare system. Especially since from growing up in Scandinavia one tends to think that America has no welfare system, that it is just a pure capitalist society. As it becomes clear from reading Friedman it is anything but. It is interesting to not e.g. that many of the failing of American society which we in Europe attribute to its turbo-capitalism has more to do with government and socialist like policies than the market. The US also suffers from massive bureaucracies and over regulation. The failure of the American health care system e.g. can not be purely placed on the market. While market failure exists it has perhaps been exacerbated by bad government policy and excessive regulation.

Another interesting in fact is that mass transport system like trains might not be in such a bad state in the US because of unfettered competition and lack of public support of railroads but rather because of over regulation. The same goes for inner city slums and the poor state of public schools.

In fact the US has many of the same anti business policies as Europe but often with a slightly different twist and draped in a different slogans. In Norway we might complain about child labour, bad pay and conditions of the workers in the competition as arguments to favor protectionism measures. In the US the same measures will be advocated by saying things like "Japanese goods are unfairly cheap because of artificially low Yen". Or like Bush said recently "In America we want and are ready to compete with anybody, but only with the rules of the game are fair". This wasn't exactly his words, but the essence.

It is funny that while Norway will use anti-capitalist rhetoric to justify socialist policies like protectionism, the US will use anti-socialist rhetoric to justify the same policy. E.g. while Norwegian politicians might talk about the capitalists exploitation of workers in other countries, the US will talk about unfair subsidies given by government to industry in other countries.

But as Friedman points out, you can't possibly lose from another country subsidizing their goods or giving their workers too low wage. The other countries tax payers or workers are the ones who lose out by giving us the products cheaper.

Although a lot of criticism of government and regulation is definitely warranted, Friedman does strike me as a bit too strong believer in the free market. He bases too many of his assumptions on people acting economically rational at all times or of the buyer having more information about the market than he/she typically does. His criticism of government also seem a bit one sided. Adam Smith stroke me as more balanced in his criticisms.

Rediscovery and the problem of information flow

2007-03-20T23:30:00.000+01:00

I have pondered many times lately about our societies present problem of information overload. Our society needs information more than ever to work efficiently. The problem is that the amount of information has grown to such immense proportions that finding the right information gets ever more difficult.

I have experienced this first hand with my thesis. I always face the option of spending hours on google finding the right information and then reading several documents trying to understand it. Only to perhaps later decide that it wasn't quite what I was looking for and loads of time was wasted. The other option is essentially to reinvent the wheel. Sometimes it seems quicker to rediscover or reinvent than to find existing information.

Sometimes we don't even know that we are reinventing the wheel. Because we had no idea that someone else had already figured it out. This is just one thing that stroke me especially today. I went to my favorite Utrecht bookstore today. I was considering getting Richard Dawkins latest book on religion and God. I knew it was going to be release in a cheaper version though and I didn't like the price in the store, so I started looking at other books. Thinking I might as well since I am already here.

In the economic section there is almost a dizzying number of books about China. People seems to be falling over each other trying to tell us that China will be the next big thing. As if we didn't already know that. Well to be fair a number of the books are interesting in the sense that they try to explain how the formidable change could have happened in China.

Browsing the books I couldn't help noticing all the speculation about why China was so backwards before. Why it trailed behind the west when it started off so good in ancient times. A multitude of theories were presented. As with many other circumstances I couldn't help feel a bit of disappear knowing Adam Smith already explained why better 250 years ago than any of these "new" theories. In fact it seems like a lot the basic economic understanding he brought forth so many years ago has been forgotten or gets rediscovered today. E.g. the dutch disease was essentially described by Adam Smith in the form of inflation in Spain from American gold.

In the book I finally did end up bying "Free to Choose" by Milton Friedman, there was another funny mentioning of Adam Smith. In the 80s at a meeting of western and eastern economists, a Hungarian Socialist economist had rediscovered Adam Smiths "Invisible Hand". I guess you could say: "Welcome the 18th century" ;-)

Market share and Quality

2007-03-17T16:24:00.000+01:00

In a world of with perfect information and were prices of products in the same product category were the same people would chose the product with highest quality. By quality here I mean the product that meet the needs and desires to most people. Or alternatively has the most utility to most people. In such a market most people would perhaps get a Lexus.

Thus one can derive the product of best quality from the market share. However our markets are not that simple because products of different quality also generally have different price points. And price affects demand and supply.

We could look at this from another angle. Assume that all products have the same quality. E.g. that every piece of meat has the same nutrition and tastes the same. That all petroleum will make your car go equally far and fast.

Price will then be determined by supply and demand. Market share will then have no meaning. However we can derive some things similar to market share from this.

Every person would typically not buy the same quantity of every product. More wealthy people might buy more meat or more petrol to be able to drive farther with their car. In fact we can assume everybody wants as much meat and petroleum as they can get but their limited amount of money prevents them from doing so.

We can translate this into quality. 2 liters of petrol has twice the utility as 1 liter of gas. Likewise 2 pieces of meat has twice the satisfaction as 1. In reality this is of course not true, because of diminishing utility of items as we get more of them. But lets assume this is true for a moment.

We could then say that 2 liters of petrol has twice the quality of 1 liter. If we look at how much petrol different people buy in the market place we will find that perhaps most buy 1 liter, a few buy 2 liter and a very small minority buys 4 liters. We could bundle these amounts into product categories. Saying that 1 liter petrol is a different product than 2 liter petrol and that it has half the quality.

Then we can actually start looking at product market share. We will find that the 1 liter petrol product has much higher market share than the 4 liter petrol product.

From this can we derive that market share reflects product quality? Obviously not. Because of perfect information we can however derive that the 4 liter is of higher quality, because it has a higher price. Why? Because it sells despite its higher price. If you could travel equally far with 1 liter as with 4 liter, nobody would buy the 4 liter.

Likewise if 4 liter sold for the same as 1 liter, then nobody would buy 1 liter. Leading to 100% market share for the 4 liter product. Thus deriving product quality from market share is only applicable when products have the same price point.

Now lets go back to the real world. Well almost. We still retain the assumption of perfect information. In the real world items have diminishing utility. 4 liters of petrol is not 4 times as good as 1 liter. Perhaps only 3 times. 8 liters might only be 4 times as good and so on.

If we consider MP3 players then two MP3 players has little extra value to a customer over 1 MP3 player. But even with MP3 players we can make analogies to petrol. All things being equal an MP3 player with 2 GB of storage is obviously better than one with 1 GB of storage. If two players have the same storage then the one with better sound is the best.

We could abstract this into quality points. A player with more quality points has better sound or/and more storage. We assume that quality point is like petrol in our previous example. 2 quality points is twice as nice as 1 quality point. In other words the law of diminishing returns does not apply.

We want to do an experiment. We assume all the buyers of MP3 players have perfect information. Meaning they do know which player has the highest quality. We on the other hand are passive observers and know nothing about the quality of the products. But we want to infer from market share numbers which one is the best.

If all players are sold at the same price then we can infer that the one that sells the most must have the best quality. Why would anybody that actually knows the quality of all the products get one of lesser quality?

Another possibility is that several products get the same market share. This must mean that all players have the exact same quality.

If players are sold at different price, then we can infer that the player which manages to sell at the highest price is the best. Because the person who can afford to pay the highest price like anybody else knows the quality of every product and would not pay extra for something that isn't better.

What about the products that are not sold? They fall in two categories. They they are either too expensive or overpriced. Too expensive means that it is indeed a higher quality product but nobody can afford to buy it. Which that our previous conclusion needs some extra specification. The player that manages to sell at highest price is the best one of those sold. There might still be a better one, except it was too expensive for anybody to afford. The second category are products are players sold at prices above the price of other players with higher quality. They will not sell even if people can afford them because a better one can be had for lower price.

So can we look at a product price and determine which one is better? Probably not. Since first of all you have to determine whether the products really are in the same category. A 2 GB iPod and a 1 GB iPod are in the same category, but a 1 GB iPod with great sound and a 2 GB iPod with bad sound are not really in the same category. One is not inherently better than the other. It all depends on preference.

Of course you could attempt to sell both at the same price and thus use market share to determine what combo most people prefer. But if they are sold at different price, one might sell less because it is a less preferred combo or because it is a more preferred combo but too expensive (or possibly both). So to sum it up a low market share can mean that the product only has features that appeal to a minority or that it is too expensive for the majority.

So does that mean that price and market share can't tell us anything? Not quit. The majority will buy either what is the majority preference or the cheapest. If a product is both more expensive than the competition and has the highest market share, then price can be erased as reason for high market share and preference must be the reason.

Likewise if a product is cheaper than the competition and still has the lowest market share then low preference for the product must be the reason.

Some conclusions to draw from this? iPod must be a product with high preference since it is not the cheapest player by any stretch. With Macs we don't know. They are more expensive that PC's so the market share could be either because of high price or low preference or both. But we don't know.

Who reads MS Office magazines?

2007-03-15T18:38:00.000+01:00

I used to buy a lot of computer magazines before. Somehow they seemed more interesting back in the day. Still I occasionally browse computer magazine section at the news stand. I don't know why, because I never ever buy anything there and haven't done so for many years. Perhaps it some old reflex. There is not really any point anymore because it is all on the internet anyway and more up to date.

Today I looked at a magazine about MS Office. No, it was not a magazine that happened to have an article about MS Office. The whole magazine was dedicated to Office. Every single issue! It occurred to me that I have seen this type of magazines many times before. But today I couldn't help but get intrigued by the worthlessness of such magazines. Or perhaps not entirely worthless but so utterly uninteresting. Why would anybody want to buy a magazine about MS Office? I mean who give a shit? It is like reading a magazine about Vacuum cleaners for fun.

I picked up a copy of it to look inside. The magazine was just so mindbogling boring, that I wondered whether frequent reading of it would lead to permanent brain-damage. Perhaps I should do humanity a favor, take all the magazines in the stand and burn them before yet another person is transformed to a grey office rat by them.

Or maybe just stick around discretely for a buyer to approach it and sound a warning "Don't pick it up sir! It might seem like a harmless action today. But you don't know were this will lead you. A few years from now your life will be an empty shell. Your entire existence devoid of fun."

Perhaps they should sell them in Pharmacies on prescription? Only people which have been diagnosed as mindbogling boring will be allow to buy them. Ok, I think we will stop there before I loose my mind.

Gun control

2007-03-11T00:01:00.000+01:00

At one of my favorite forums on the web the topic was recently on gun control. The thread starter presented different options for types of gun control to vote for. Surprisingly most voted for a minimum gun control that only disallowed felons to own a gun. Everybody else could own anything from artillery to assault rifles.

I tried, but I couldn't wrap my mind around the philosophy of the pro gun owners. They think it is so important to own guns to protect yourself. But I really don't see how it protects anybody. It is like martial arts for self defense. Usually it is the bad guys who are really good at fighting not the good guys who need it. They are the ones that are going to get clobbered. Likewise I would expect the bad guys to on average always be better with handling guns that the good guys.

The most interesting add-on to this thread compared to previous ones I think was a Swiss citizens view (under the nick Vlip) on gun control:

In Switzerland weapons are looked as evil things kept in the locker for when the big bad evil invaders come. Noone in his right mind is going to grab his assault rifle to repel a burglar and the burglars knows that.

He goes on to say:

Now, make the psychological step of seeing guns are self-defense tools and suddenly everyone is carrying one and noone thinks twice about using them.
That same burglar knows that if he doesn't pop the ass of the homeowner first he'll get shot.

The final quote, below is what I think sums up a very good point. It hits me that that is exactly how I feel about gun control except I was never able to express it that clearly myself. He hit the nail on the head.

I don't like the idea of using guns to defend yourself. As I said, to me a gun is a weapon of war and shall not be used offensively for anything but war. That separation is very strongly imprinted in my mind and shall I say in most Swiss people's mind. Once you remove it, the usage of guns grows as the arms race is started between the good and bad guys. Then it becomes trivialised and people start capping each other's ass because they looked at them funny.

Perhaps it resonates with me because Norway also has a system which is a bit like the Swiss on a small scale in that a segment of the population permanently keep assault rifles in their home in case of a war. Something which has gotten increasingly on my mind, ever since I found out that I have been picked to keep an assault rifle at home.

Like the Swiss person I can't imagine that the first thing I would do if I experienced a burglar in my house that I would run for my assault rifle, load it and point it at the burglar. I just seems odd to use a tool of war against a burglar.

Apart from the idea that people need guns for self control, I find it insane that so many think there should be no restrictions.

If anybody can own a tank, fighter yet, artillery, mines, bombs etc what would stop a group of people from forming their own little private army? A group of terrorists could in theory create their own little private army and create havoc on society. Remember terrorists are seldom previously been convicted of any crime. So laws against felons owning guns would not help.

The pro gun owners provide theoretical arguments in favor of gun control by claiming that citizens need to be able to defend themselves against a government gone wrong. But their ideas seem to rest on the assumption that citizens are a unified democratic minded group. What would happen in the US in case of a major crisis? For instance if the US came in a situation similar to that of the Weimar republic of Germany when Nazis and Communists fought it out in the streets. When society was split. How would America look if every extremist group could arm themselves to the teeth with military weapons? I believe society would quickly fall apart. Nobody would be able to prevent a heavy armed fraction from taking over control of small towns and cities. When government is not the one with the sole right to use violence then there is nothing to prevent society from falling into an anarchy of violence.

It is ironic that it is the far right in the US which speak so warm about the right to own guns. That government should not be telling them what to do, when the Bush administration has limited civil liberties in so many areas without any protests from the far right.

The freedom to hire and fire

2007-03-08T02:04:00.000+01:00

My girlfriend just mentioned talk on CNN about Bill Gates "wanting" to destroy the American middle class. Or rather that was the popularized version. I doubt that was exactly what Gates wanted. Anyway I was intrigued by the story and tried to look up more info about it. Gates wants more people on H-1B visa to the US. Which to Bill typically means software developers. Naturally that is of interest to me since I am one.

I will blog about this later, but while reading about this there was one comment that caught my attention. If there is such a shortage of software developers. Why don't Microsoft trains people to become software developers themselves?

Following that thought, I wondered, why do we even have universities and schools at all? Can't companies hire people and do all the training themselves? That way they can do it exactly as they want. While this is basically the idea behind apprenticeship and internship it strikes me that there are a number of problems with this approach.

The irony here is that doing something like this which seems like a more free-market approach to education is in fact in direct opposition to the free market.

The problem is actually that the flip side of companies being able to fire and hire employees at will in the US is that employees are also free to quit at a whim.

Lets take a detour before we address that question directly. In Mao's China food production was very inefficient. Deng Xiaping studied the problem. He found that the problem was that rice growing is extremely labour intensive. Getting higher yield often involves building terraces and watering systems for fields. This requires a lot of work and effort. A farmer could thus potentially work extra hard one year to improve his land to get higher yields the next year. Only problem was that in Maos China the farmer didn't own the land and be transfered to another land and any time. Thus there was no point in putting in extra effort because you might not be the beneficiary of that extra effort. To make a long story short, this lead to privatization which dramatically increased the yield. The key to harnessing the power of the market and capitalism is thus property ownership. You have to be able to own the property which you can improve otherwise you wont improve it.

Now replace land for growing rice, with employee for writing software. Like with investing in land, the employer would be wise to invest in the employee in the form of education to improve the employees output of software. Only problem is that the labour market works land property in Mao's China. The farmer could lose a plot of land at any time, likewise an employer can lose an employe at any time. There is in other words no way for the employer to protect his/her investment.

Likely the employer WILL lose the employee, because other employers will not have had the expense of training the employee. They can thus offer a higher wage and attract the newly trained employee over to them. It should be quite obvious that with this system it is not in the interest of any employer to train their workers.

One can thus never expect companies to provide the education of the countries people in an American style capitalistic system. Without having looked into, my speculation is that Japan (and perhaps to some degree Germany) has been able to have highly skilled factory workers because companies can put a lot of resources into training their workers. Why can they do that? Because in Japan workers feel loyalty to the company. They would probably not leave even for better pay. Thus companies can protect their investment in their workers. The flip side of this is of course that companies also have loyalty towards the workers.

I think the two often go hand in hand. Which is why I think it is premature when a lot of economists urge countries to make their labour markets more flexible like the US. By doing so they might eradicate particular advantages those countries had in certain fields. For instance one could speculate that the high quality of german craftsmen, and german vocational training might be related to trust and loyalty between workers and employers.

Anyway I think incentives which are not given in money is often overlooked by economists. Even though economics is largely a study of incentives.

Atheism vs Religion

2007-03-03T17:14:00.000+01:00

The New York times has an article about hackles raised by books like Richard Dawkins' "The God Delusion". Neither have I read the book nor have I extensively read the critics, but from what I have seen it seems to me like the critics are missing the mark.

It seems to be a classical mistake to compare any atrocities committed in the name of religion to those committed by secular movements like Communism and Nazis. It makes me wonder when well known public figures which are supposed to be highly intelligent makes that kind of confused comparisons.

Atheism or Science does not have any ethics or moral. It doesn't call upon people to act in a specific way. It is not an ideology has thus nothing to do with Communism or Nazism. The same can on the other hand not be said about religious fundamentalism. Religion consists of two components. One component is explaining the world around us and the other component is about how we should liver our lives. It is only the first component which is comparable to science. The second on the other hand is comparable to an ideology like Communism or Nazism. Although it doesn't need to be a negative ideology per say.

So comparing atrocities committed by secular ideologies to those committed by religious ones is like comparing apples or oranges. What makes religion different is that it does make suggestions to how you should behave, live your life and act towards others. Fundamentalism is an extension of this. It is what happens when people make a very narrow interpretation of religion. Science or atheism on the other hand does not have an theories for how you should live your life. A narrow interpretation can thus not lead to Nazism or Communism or similar.

A second mistake these people make is the belief that you can not argue anything about a matter without an in depth knowledge about the philosophy and thinking around the subject. I don't need to study the scripture of the flying spaghetti monster in very great detail to conclude that the idea is total rubbish. Nor do I need to read every possible text on Nazism before I am able to conclude that it is an evil ideology.

I find it ridiculous that Dawkins should be required to be an expert religious scholar before he can criticize the basic idea of religion.

Veldhoven a place slightly different from the rest

2007-03-01T00:27:00.000+01:00

At the moment I live in a small City in the Netherlands outside of Eindhoven named Veldhoven. As you may know Eindhoven is the "capital" of Philips, the electronics multinational. Veldhoven is not a particular exciting place. There are no canals or grand old buildings to look at or any magnificent landscape or scenery. But it has a bit of small town charm. Unlike Utrecht, my previous place of residence people say hi to you here on the street. And just like in Ireland or Britain (I am sure there are other places but these are ones that come to mind) people frequently say bye to the bus driver when they jump of. And he responds! Even the way of saying bye is slightly different here from Utrecht, Amsterdam and all the other dutch cities I have become accustomed to. Instead of "doei" they say "hadoo".

Lately I have noticed other small details. The Veldhoven Albert Heijns are not quite like other Albert Heijn. For those who wonder Albert Heijn is the ubiquitous dutch grocery chain. In Veldhoven the stores have machines you can put in a special plastic card. When the machine registers you, you can pick up a device about the size of a large shaver. You can carry the device around in the store and scan all the stuff you want to buy yourself. A display on the machine shows how much you need to pay for the current amount of items. Then all you need to do when you get to the register is to pay. At first I thought it was a totally new thing, and I wanted to sign up right away. However it turned out that this thing had been in Veldhoven for years. But only in Veldhoven! No other place in Holland. It had been such a great success that they planned to introduce a similar system all over Holland. Because of this they wouldn't let me sign up. The current system was about to be phased out.

Today I noticed the second little Veldhoven quirk. The buses accepted chipknip cards! Chipknip cards are used in Holland to store electronic money. Cool, maybe I should try that later.

Is globalization bad for us?

2007-02-20T11:06:00.000+01:00

Forget about attac, anti-globalization protesters at Seattle and all that. They think globalization is bad for everybody.

But what if it turns out that globalization is bad for us? By us I mean people in the rich west. Europe, America and Japan. Globalization is supposed to be good because it lowers the price of products and as consumers we are then supposed to be able to buy more stuff than ever before.

But they say that despite the economy in western countries showing strong growth, wages are hardly moving. In fact all the profits are turning up in the pockets of share holders and companies.

Normally this is nothing to worry about. Traditionally when capital is scarce and labor is plentiful, wages will be kept low and profits high. But because of the growth that causes soon all the labor will be sucked up and there will be shortage while capital has accumulated so it is no longer in shortage. Then wages begin to rise. So it should just be a question of time before wages increase.

And time is exactly what the problem is. Before globalization it didn't take long before all the labor in one country was sucked up and there was a shortage. Now the labor force is essentially the whole world.

What is good for the whole country is not always good for a special interest group. Falling food prices is bad for farmers but good for everybody else. But we allow this to happen because in sum the whole country benefits and farmers can over time be relocated to other tasks or their difficulty eased with temporary government aid.

However today we can look at the whole world as a country. And we in the west happen to be a small special interest group that is very wealthy. Something called globalization is happening in our country. It is good for the country as a whole. The whole economy is growing and more people are moving out of poverty. Too bad this happens at our expense. Our wages are barely rising, even slightly falling in some case. Even though everybody else is making considerable gains.

However sooner or later everybody will be as rich as us right, so then our wages will start to increase too. So we have nothing to worry about. Right? Wrong!

It all depends on when the rest of the world gets that rich. At current trend China would spend 40 years to reach the level of the US economy today. India will take even longer. Are we willing to wait a whole generation before our own economic situation improves. Perhaps we can comfort ourselves with the fact that everybody else are getting better lives. But try to tell that to the voters.

If life for Joe Average does not improve over 40 years, then I doubt that globalization is going to retain much support.

When a Rolls Royce cost less than a Skoda

2007-02-20T11:02:00.000+01:00

Software like drugs is a bizarre product in that cost of production is insignificant. Instead all the cost is in development. Another peculiar property is that it can be stolen (or pirated as would be the most correct term) very easily.

I have talked about this before, but I thought I'd dwell a bit deeper into the implications of software piracy.

Piracy allows you to essentially get a Rolls Royce for the same price as a Skoda. By that I mean that the very expensive software is usually just as easily available on the piracy market as the Skoda. In fact it is usually more easily available because more people want it.

So in a world were cars were like software everybody would essentially be driving Rolls Royce. This sounds great right? Everybody is better off? Not quite. In the short term yes. Somebody obviously lose. Which one can vary. There are different scenarios.

If nobody is honest and pays for their Rolls Royce then the Rolls Royce factory makes no money and thus never improve their cars. If this had been the case with the car industry from its inception, then we would all still be driving T-fords today. So obviously we, the pirates, are the big losers here. And so would Ford because they would have been bankrupt long time ago.

In another scenario honest people exist! However most people still pirate their cars. The car companies will then make some money and be able to invest some money in improving their cars. To be able to improve the cars as fast as if everybody bought their car the price of the cars would have to increase a lot. The big losers then are the honest people. We assume that the car companies hire engineers depending on how much they can spend on car improvement. So the car companies would not lose out.

If however they wont pay more than normal, the car companies will make less profit and can hire less engineers and improve their cars much slower. Everybody is a loser but the pirates are loosing the least. But over time they still lose because they will not get their cars upgraded very quickly.

So software piracy is in the short term benefitting people. Because everybody get to drive a Rolls Royce, but the problem is that this model doesn't improve much over time. If we all payed for our software we might be running Skodas and Fords today, but within a few years those types of cars have probably surpassed the quality of a present day Rolls Royce.

To jump out of the analogy, what I mean is that piracy causes an unnatural shift of resources away from software development and into everything else. Thus software is not improved as fast as it could. And we lose out. Another problem is how resources get allocated. The ones who pirate the most are those that would normally be buying the cheap software. While wealthy corporations that don't pirate as much. They will buy the big expensive software packages. The result is that balance of resource allocation to software development is shifted towards the big software companies like Adobe and Microsoft.

In a software market without pirating, on the other hand much more money would be spent on cheaper shareware programs. Thus a lot of innovative new software never gets created.

I admit to having pirated software thinking it doesn't hurt anybody. The logic being that as a poor student I could never have afforded an expensive software package anyway. So if I pirate that software it is not like they lost a sale. What I didn't realize is that it is the little home developer making cheap shareware that lose out. Pirating essentially kills the market for cheap alternative software.

But that is only one of many reason why I think software piracy is evil. The attitude of young westerners towards it is especially hurtful to the west itself. Expensive software represents capital that can be used to increase productivity and create an advantage. Except the west gets none of that advantage, because easterners just pirate the software.

E.g. under normal circumstances farmer in a western country could compete with one in a poor country even if he has a higher wage because he can employ more expensive and efficient machinery. In theory a software house in the west would have access to more capital and could buy more expensive software and thus be more productive than a software house in India or China with less available capital. But they don't need a lot of capital because they can just pirate that very same software and then any competitive advantage in having more capital is lost.

How can we expect developing countries to respect intellectual property if we don't do it ourselves?

Why aren't wages increasing in the West?

2007-02-18T03:02:00.000+01:00

Several news papers in recent times have reported on the fact that despite the strong economic growth in most western countries today. In particular in the US, wages are not increasing.

So where is all that extra money going? It is going into profits. Meaning stock owners and companies are making more money than ever.

I have been thinking of why. Labor is affected by demand and supply in the market like commodities. High demand will bring high bring high price. Adam Smith noted that in the North American colonies in the 1700s the wages were far higher than in Britain despite Britain being a far wealthier country.

He explained this by the fact that the American economy was growing faster. There was more than enough land and resources and so farmers could not get new workers fast enough. Essentially Europe could not supply the US with new immigrant works fast enough which pushed up workers wages.

Now what would have happened if workers could have moved easily over to the the American colonies? The demand for workers would be met and wages would fall.

I suspect this is essentially what has happened today. The world is better interconnected than before. Moving factories and businesses is easier than ever. In a tight labor market a factory can get extra workers either by getting more immigrants or by moving itself to the location of the immigrants. Thus demand for labor can easily be met. If neither is possible, the factory will have to increase wages to attract workers from other companies.

So in some areas globalization results in falling prices. In other it results in rising prices. E.g. in Norway a lot of hydroelectric power was produced. It was sold very cheaply because production was above demand. This was because power could not be easily exported. As soon as power cables were built to Europe the artificial limit on the market was removed and power companies were no longer producing in excess. Thus Norwegian market prices increased.

Now all these might make it look as if globalization is a bad thing. But the questions is rather for whom. Consumers for electricity on continental Europe now get cheaper electricity than before. So there is no net loss to the world. Likewise workers in non western countries get higher salaries than before because companies now place demand on their labor, which was not the case for the artificially restricted labor markets of the past.

But of course the problem remains that increased output mainly goes into share holders and companies pockets not workers in the world. Of course this is not money that just disappears. The result of this is that there is more money left for investment which should mean higher growth.

In the past this growth would hit the wall eventually because there would be no more labor left and labor prices would increase to such high levels that profits would be whipped out an there would be little incentive to increase production.

Now growth might continue for much longer periods as there are less supply problems for labor. This is all good for the world as a whole in the long run.

But the problem is, what are we who work in the west supposed to do in the meantime while we wait for the rest of the world to catch up to our level?

There probably isn't any other way than to try to move our populations up the value chain. By educating people to professions that require more skills. These types of workers will be in limited supply and thus wages will be forced up.

First impression of Windows Vista

2007-02-06T22:16:00.000+01:00

One sentence: I am not impressed! Microsoft spent five years to produce this?

To be fair I only tried it for 20 minutes or so and I did so in a language I am not proficient in, dutch. So i will not claim to be objective. I will look more properly at it later.

However I doubt that the verdict will improve noticeably. But to get this straight: I am not claiming that it is not an improvement. From the little I saw I think it was a noticeable improvement over Windows XP. The graphics is nicer looking. The user interface has improved. For instance there are search boxes all around, both for global search and in applications.

However despite 5 years of development and Microsoft's enormous resources they have not been able to produce something that is any better than the current incarnation of OS X. By better I mean it in a bit shallow way. I don't know if Vista has better OpenGL performance, better threading model, higher performance network stack, better tools for the enterprise etc. But from an end user point of view and user experience it is no better. In fact I would claim that OS X is still quite far ahead.

OS X still looks better, as more fancy effects and still manages to do this with less resources. Of course looks is not the most important. But in every other area I found Vista lacking compared to OS X. Applications have an inconsistent and cluttered user interface. MS has introduced something that is sort of like a mix between a toolbar and a menu. Now menu entries and toolbar buttons can be on the same row. However some programs still have the normal menu in addition. This seems quite confusing since their functionality is overlapping and the distinction between the two is not clear cut.

Just like Mac OS X there are now applications like Address-book and Calendar. However they are unnecessary complicated. Instead of being standalone applications they are integrated with the windows file manager. So while editing and adding contacts you see a whole file hierarchy.

The photo organizer application is overly busy with buttons and options. The tree view were you would normally see a list of your albums or rolls in iPhoto on OS X, shows keywords, rating symbols and a whole host of other data. While iPhoto is quite obvious how to use at first glance I was quite confused with the Vista counterpart. It presented too many options and information to the user at the same time.

The configuration panel was equally confusing. Way too many icons and options. On OS X it is far less icons and they are more properly organized. I was not able to change the language in the operating system. On OS X this happens on the fly. But in Vista it seemed quite broken. I would suddenly get one application that showed information in Norwegian but buttons would be labeled in dutch.

Apart from that I can't say I saw much original ideas in the user interface. Most seemed to be copy of things already done other places. Integrating all these application into the file-manager has already been done in different Linux desktop environments. I know MS did this first by having the web browser in the file-manager. But KDE was first to make it pervasive. Actually it looked like the whole thing was a combination of rip-offs from Linux and OS X. Now I don't have anything against copying good ideas. I just seems a bit pathetic that after five years they couldn't come up with something more original by themselves.

All in all it felt too much like the old Windows with all it short-commings. Drive letters are still there. The task bar is less versatile and efficient than the dock. The interface still suffers from clutter: too many options and button visible to the user at the same time.

But I agree as many people have already said. It is probably good enough for current Windows users. It would bring Windows up to a level were it is not all that tempting to switch to Mac. Although I believe Mac will still offer an advantage that will keep switchers trickling in.

People still don't get the iPhone

2007-01-22T17:01:00.000+01:00

It has been a while now since the iPhone was announced by apple. There has been a multitude of comments both from prospective buyers and experts. While a lot of people are excited I am surprised by the logic of the nay-sayers. I read experts commenting that combining MP3 player, camera and phone has been done before. And that other phones have touch screen too. Well duh!! I am not impressed by these so called experts. You don't need to be an expert to know this. I am sure every teenager knows this.

The new with iPhone is not the per say. It is the packaging, integration, user interface. The whole experience in short. To not understand this is almost sign of retardation, as this is a repeat of the iPod. As everybody should know iPod was not the first MP3 player, nor was it the first hard drive based. Yet it was revolutionary for the MP3 market. The reason was the seamless integration with the computer, the user interface, the form factor and design. For the first time joe user could get a MP3 player that just worked and was simple enough for anybody to operate and didn't require special made pockets to carry around.

The iPhone will offer a lot of the same to the phone market. It is of course a bit early to make bombastic claims. But if the iPod is anything to go by perhaps we will get synchronization that actually works? None of the phones or PDA's I have owned have ever managed to synchronize very well. Palm managed well but only within their suit of applications. But who use those? iPod on the other hand syncronize well with the apps I actually use every day iCal, Addressbook, iTunes etc.

And a feature I use almost dayly, my address book, is not very well thought out on most phones I have owned. Often it requires far too much clikcing and navigation is often slow and akward. My blackberry is not too bad, but it still requires me to:

Scroll to addressbook icon using jog dial.

Click it.

Scroll to right person.

Click to open command list.

Scroll down to call command.

Click to dial.

In contrast from what I see on the iPhone this would require:

Tap phone icon with finger.

Scroll down address list with finger.

Tap person with finger.

Tap cell phone, to call persons cell phone

Now these operations are not directly comparable since they take different time. The iPhone solution does not require merely two operations less. A number of the operations on the Blackberry are quite slow because it requires scrolling and then clicking. With iPhone you tap directly at your operation.

A phone with a stylus might be able to address this. However I got to say that all the phones I have used with touch screen in the past are quite useless when using my finger. It is quite slow and error prone. If Apple can manage to make it easy use your finger it is going to make the iPhone a lot faster to operate than the competition, simply because the user doesn't have to take the trouble of bringing up the stylus first. And this is what Apple say they have pay particular attention to.

Now we don't know how good the iPhone will be to use before we can try it out ourselves. However it would be premature to dismiss it simply on lack of features. As always in the past Apple is not really aiming to bring all new features to the table but to let us use advance features more easily than we could before. They have showed this in the past with the iPhone, managing music with iTunes and making webpages with iWeb and movies with iMovie.

Leaving Canada

2007-01-11T04:12:00.000+01:00

Now I have come "home" to the Netherlands after a 20 day visit to Toronto, Canada. It is hard to say what I should think about Toronto. It had a lot of things going for it. But somehow it seemed like there was something missing. Or perhaps it is just me. I didn't really go there to see the city but to visit my girlfriend and her family, and work on my thesis so I was never really into a tourist mode big time.

Maybe what let me down, was that I had retained this image in my head that Canada was substantially different from the US. That it was a sort of perfect mix of Europe and the US. The good parts of Europe and the US without the bad parts. Canada is different, but not substantially. By now I should have come to realize that there is no such thing as a perfect country or culture. Canada is not exception. There are a lot of positive things but also some negatives. Perhaps not so extreme as the US.

A land of immigrants
Although I think both Holland and Norway have become quite multicultural in the last years (Holland more so than Norway) it quickly pales in comparison to Canada. In Canada it seems more natural and integral. You quickly think of all kinds of ethnic groups as Canadian in a way that you never do in Europe. Although there are expectations. I think London had probably even a more multicultural feel to it than Toronto. Although it is hard to tell because I know the cities in very different ways and they are also very different. But who knows perhaps this is more because of the sheer size of Toronto. Perhaps smaller Canadian cities will seem just as white and insular.

Then there is the fact that Canada is a land of immigrants, which Europe never was. A white is just as much and immigrant as a black, asian or hispanic. But in Europe white people are in a different position. They are the natives. Dutch and Norwegian have an ethnic meaning because there is a native Dutch and Norwegian population. Thus one more easily get into a them and us mindset. The natives versus the newcomers. Perhaps the english got away with this more easily by introducing the concept of British. Because it is a constructed form it is a bag term that can be used on any inhabitant in Britain. But people can still use ethnic labels like English, Scottish and Welsh. In Norway and Holland there is no such term. In Norway we can say that traditionally it was inhabited by Sami people and Norwegians. In this context Norwegian refers to an ethnic group. But it is ambiguous, because it also refers to citizenship. In this way a Sami is also a Norwegian.

Recently it has been a debate in Norway about who should be able to refer to themselves as Norwegians. Traditionally it meant white people, or perhaps more accurately caucasians who were ethnically Norwegian. Now it is becoming politically correct to let anybody label themselves as Norwegian regardless of ethnicity. Culture and belonging is now seen as more important.

But this does not fully solve the problem.

Native Eskimos?
To illustrate that, consider immigrants settling among sami people in Northern Norway. If a Pakistani settles among Sami people and adopt their culture and way of life does he/she become Sami? Or what if he/she settles among eskimos on Greenland will that make him/her an eskimo? I don't think it would be fair to say so because these people are more than just their culture. Likewise a white person can never become a native american by adopting native american customs and living among them.

This seems so obvious when talking about "primitive" people but somehow the logic seem to change when talking of larger groups of people. Does a Welshman ever become english by living a long time in England. Or a Scot? I don't think so. And yet if he had gone to America he could have become American. The reason for this difference I believe is that American like British has to do with citizenship while English and Welsh has to do with ethnicity. An American moving to Britain can become British but never Scottish, Welsh or English.

What we lack in both Norway and Holland is perhaps a term like British. Something that refers more to culture and citizenship than to ethnicity and heritage. Calling everybody who live in Norway for Norwegians is almost the same as calling both Welsh and Scottish for Englishmen because the English happen to be the dominant ethnic group.

To refer to the native population as White-Norwegians is simply not very descriptive. It is almost the same as referring to native Americans as Red-Americans. Native-Norwegian would probably be a more descriptive term.

Ugh once again I go of on a tangent and write about something totally different from what was intended. Oh well I will write more on Canada later.

Toronto City

2006-12-28T04:27:00.000+01:00

The idea in the previous post was to talk about Toronto City, but I got totally side tracked on politeness so I will try again.

Okay as I said it looks very American. Very tall buildings in downtown, broad roads, chains with neon signs etc. However when looking close you notice some differences. A lot of the tall buildings are actually condos. People live there. Right in the city. This is a very un-American thing. In the typical American city people don't live in the City.

Then the other thing you notice is that they have a subway and actually quite a lot of trams. A well functioning public transport system? How un-American. As you drive around in low density residential areas you notice another thing: Actual urban life! By low density I mean areas with separate houses with yards as opposed to Condos. A lot of these areas have small downtown areas as I am used to from the Netherlands. You can walk to local stores in your neighborhood. To buy groceries you don't actually have to jump into the car and drive to the huge mall 20 minutes away. In fact it is not just some grocery store here and there scattered around but an actual city center in all the different neighborhoods. There will be quite long streets with banks, cafe's, grocery stores, book stores, shoe makers etc.

But what makes Toronto an exciting city is that it has every kind of urban environment in it. It has dense urbanization with enormous high rise buildings with apartments like in asia to large sprawl like in America. By that I mean very low density areas with large houses on large plots of land were you have to drive far away to the strip mall to do your errands. In between this you have what I just described. Something that looks a lot like urban life in Holland: houses with smaller yards mixed with small stores. Which together creates a certain intimacy and notion of a local community. A neighborhood that is alive not just some place were people go to eat and sleep after they finish working in downtown.

Another cool feature of Toronto is the ethnic mix. There are whole neighborhoods of Ukranians, Portugese, Chinese, Indians etc. China town is huge here and there are even whole malls that just sell chinese types of food. There is a large selection of ethnic types of restaurants. For instance, I had some very good Vietnamese food in Toronto.

Canadian politeness

2006-12-28T04:25:00.000+01:00

This was the first Christmas in my life, which I didn't spend at home in Norway with my family. Instead I flew to Toronto, Canada to spend it with my girlfriend and her parents. It is the first time I go to Canada and the first time I meet her parents. Actually it is technically not the first time I visit Canada. I did cross the border to Winnipeg two years ago when I lived in Grand Forks, North Dakota. But I will chose to disregard that experience. Mainly because saying that that was like visiting Canada is like saying you have visited Germany because you had a layover at Frankfurt airport.

I was curious about how Canada was going to be. People say it is like a mix between Europe and the US. From a European perspective that seems to mean the good parts of the US without the bad parts. I think what I got wrong from this description was the mix. I thought "between Europe and the US" meant 50% Europe and 50% the US. However at first glance it seemed more like 99% American and 1% European.

But to be fair, what exactly does European mean? Europe is not a country like the US or Canada. Going from Scandinavia to Greece I think anybody would be hard pressed to say that both represented a common culture.

As I said at first glance I could not distinguish Toronto from any other American city I had been to. People sounded the same when they spoke. The roads were wide like American cities and everything was chains. It was the same chains as I have seen in the US: Quizznos Sub, Subway, McDonalds, Holyday Inn, Office Depot you name it. But here and there one could notice some slight difference. Instead of Starbucks one would frequently find the homegrown Tim Hortens, and instead of Citibank, Wells Fargo etc one would find Scotia Bank.

Even people way of acting and dressing seemed more or less exactly like Americans. Compared to Holland and Norway, which are the European countries I know the best, people are noticeably more chatty. Like Americans, Canadians are masters of small talk. They are also noticeably more polite and service minded (at least in the traditional meaning). Any store you enter they are quick to ask how they can help you. Even if you say you are fine they might later query you again. This time in perhaps a more subtle way. E.g. "Out doing Christmas shopping?" or "are you looking for anything in particular?".

Now of course they will in general try to help you in Norwegian or Dutch stores too. But it is a bit more limited and not so active. If you enter a computer store of course they will come and ask you how to help. But not always right away and if it is busy they might not always notice you. In grocery stories they will in general never address you first. Instead you have to ask them if you want help. But here you only need to look slightly lost in the grocery store and someone will come up to you and offer their help.

Passing through the city one day without hearing "excuse me" a dozen times is almost impossible. People will say excuse me even if there is just a theoretical chance that they might bump into you 1 minute into the future. The other day I stood looking at pills on a shelf in the drug store. A women stood 1.5-2 meters away from me looking at another section of the shelf while talking in her cell phone. I glanced at some pills next to me which meant that my gaze perhaps swiped passed her for a split second. She immediately said "excuse me" and moved one meter farther away, as if she had bothered me by obstructing my view for a split second. Honestly I don't know why she said excuse me. My girlfriend suggested it was because she talked on the phone. The reasoning going that that might have bothered me. But I don't know. She didn't talk particularly loud did I show any signs of being bothered the slightest. And that is the thing, people go around saying "excuse me" and "sorry" to me for a multitude of reasons which for most of the time I fail to discover. Somehow they must believe they are bothering me in some way but I don't see how.

And I can't help feeling very Norwegian because of it, because all this excessive politeness is almost bothering me more than it pleases me. When people pass me they always say "excuse me", although that is meant to be polite I can't help but feel that I was somehow in their way, so they had to say it to make me move. Perhaps because you would only say "excuse me" in Norway or Holland if somebody was genuinely blocking your passage. That is why I say they are more polite here in the traditional way. Although I greatly appreciate their small talk. That you can easily talk to strangers is something I miss from Norway and the Netherlands. However the politeness here frequently feels excessive. I prefer to be left alone in the store and to only get help when I ask for it. And I prefer if people only said "sorry" when they actually bumped into me and "excuse me" when I actually blocked their path.

Some politeness phrases are almost offending to me. For instance when calling support in North America about a problem you have they always end with the "thank you for calling" or "we appreciated your call". It just makes me angry because it is so fake that it is essentially like them telling me I am an idiot. Because only a retard would think they actually appreciated your call. I am the one getting help. I am the one who should thank them for solving my problem. They are the ones that are getting bothered. So they should not be happy about the call. To be that is almost like acting like a Beta as in the book "A brave new world" were the brand of people named Betas have been brainwashed into enjoying hard and hazardous work.

But lets round off with something positive. In Canada as it seems like in the US, they are generous with compliments. This is unfortunately a very weak spot in Norway and Holland. Here almost complete strangers can comment on that they like your jacket or as in my case, that the person liked my haircut. That is just something that would never ever happen in Norway or the Netherlands. However I am a bit worried it is not genuine. The reason for that being that I did essentially not have a haircut when the guy said he liked it. I just had a bunch of hair falling down on my head that had not been combed or cut in any specific way. Or perhaps I am so unhip that I become cool. Well time will tell. I'll report back more on this aspect of Canadian interaction when I have gained more experience ;-)

Legalizing drugs

2006-12-15T12:43:00.000+01:00

Apparently Switzerland has lately been talking about legalizing all drugs. We are not just talking about soft drugs like in the Nederlands. I haven't really made up my mind about what to think about it, although I definitely don't believe a type of war against drugs like the US drug policy works.

Before I know whether legalization would increase drug usage a lot or not it is hard to say whether I favor full legalization or not. However it is clear that it very likely would severely reduce crime level. So much crime is related to drug distribution. If drugs were legal there would be no money to be made on smuggling and selling drugs for organized crime and they would lose a lot of their income, and there would be less reason for them to exist.

Reading peoples comments about this suggestion it is then strange to see that some conservatives are strongly against it on the grounds that they don't want their tax money to go to treatment of all those extra addicts they believe legalization would result in.

It is funny how conservatives never seem to consider paying police, military and prison guards for expenses. But when you pay for social programs or to help poor or disadvantaged people then they suddenly start screaming about their tax money.

The American war on drugs cost a huge amount of money in the form of more police, prisons and health care due to increased gang violence and crime because of illegal drugs. They will happily support a police that requires higher spending on police and prisons, but not more money on a policy that might require more money to health care. Hypocrisy.

Politics is too much determined by what is considered morally right or wrong. Why not accept reality, that humans will never be completely morally pure and instead device policies that try to limit damage and suffering based on that accepted reality?

If legalizing all drugs should show itself to only lead to minor increase in addiction, but large reductions in drug related crime and better health for addicts then I am all in favor of it. Of course for this to work I believe very strict regulations needs to be put on it. Hard drugs should be prescribed to addicts. It should only be sold at limit places under strong regulation. Prices should be set low enough to allow addicts to get money for it through normal work to but high enough to prevent over use. Perhaps there could be a dual pricing policy. People who are determined by doctors to be addicts can get it cheap through prescription. Casual users on the other hand have to buy it expensive at a monopoly store. The stores should be required to have posters and information brochures about the dangers of drug use.

Take that anti-globalizationists!

2006-12-13T01:11:00.000+01:00

I can't help but feel a bit shadenfreude about the latest article in the Economist about ethical shopping dubbed: "Good food? Why ethical shopping harms the world". In this article the anti-globalizationists are totally run to the ground by an in depth look at organic food, fair trade, local produce etc.

Here are some of the shocking conclusions:

Organic food is not any better for you but they are not any better for the environment. In fact they are actually far worse for the environment.

Fair trade does not help poor people, in fact it makes them suffer more.

Local produce is neither healthier or more environmental friendly. In fact it is worse for the environment.

Now how can this be? It seems so contrary to intuition. Well when one studies the reasons, it becomes clear why one should not base political views on emotions like anti-globalizationists and the far-left (well I guess that goes for the far-right too), but on cold hard facts.

It is actually quite simple. Organic food, is much less intensive and thus require much larger area to give the same yield. This requires more forrest and wilderness to be converted to farm land.

Fair trade is slightly more complicated. By giving a higher price to farmers in the fair trade system, more farmers are encouraged to grow a fair trade crop. However fair trade crops already suffer from over production, that is why they are so cheap. Thus production increase more, which forces the price down for everybody no in the fair trade scheme. Thus fair trade helps the fair trade farmers at the expense of every other farmer.

Buying food locally rather than at the big super market requires more energy, simply because the shopper has to drive farther. Of course energy is saved in transport to the big super market, but this transport is very effective because it is large quantities with big trucks. Shoppers on the other hand do not perform a very efficient transport of food.

Once again it shows that interfering with the market does not bring social justice or better environment. Of course sometimes the market is broken and needs to be mended, but anti-globalization people do not even try to work within the market system. Instead they try to work against it, which is bound to fail.

Aargh!! I hate compiling

2006-12-12T17:45:00.000+01:00

In retrospect, the following entry does probably not make any sense at all to most people, unless they are software developers of Linux users.

For those that don't know I am currently working on my thesis. Up until now I have been mainly dealing with nice theory. I am saying, nice because theory is at least logical. As it often seems, when you actually sit down and try to develop software logic breaks down. Code that is absolutely supposed to work, doesn't because of very convoluted reasons. You are using the wrong version of a software library, or perhaps you have installed some incompatible third party software. Or better yet you used the wrong settings when you compiled your software or some code in a widely different area of your program mess it up for code you are working on right now. If you are lucky you get a cryptic error message, and it the worst case nothing at all.

The last two days reminds me of my Linux days. Sitting for hours trying to configure something, opening dozens of text files with configuration settings you don't really understand, googling like crazy to see if somebody else has figured it out only to get all kinds of conflicting advice.

So what have been doing? Well for my project I need a bunch of software. I need some library for computational geometry, motion planning, collision checking, visualization, you name it. And all these libraries seem to depend on some other ones. I must have downloaded dozens of programs by now. And it seems like none of them live up to their promises. Every time the compilation of the goes wrong. I have to wade through configuration files, experiment with different settings until it works.

This is the reason I left Linux. All that compiling, version conflicts, half working programs, tons of configuration files etc. And now all that mess caught up with me on my beloved Mac.

If software could be punished for the suffering they bring on people, then right now, Boost and pygame would be first up against the wall.

Active, Natural, Biological and Homemade

2006-12-09T12:02:00.000+01:00

There are certain marketing hype that really bugs me, and that is the usage of the words mentioned above. The reason being that it is so ubiquitous, hyped and in general works. All medication or health food seem to contain "active" ingredients. Now what the hell is "active" supposed to mean? Is there such a thing as "passive" ingredients?

A strawberry jam brand at home, has on the lid that the jam is home made! The jam is filled up in shelves in every grocery store in the country. Of course it is NOT home made. And this you can learn by reading more closely on the information label. At least they have the decency to say that it is in fact not home made but it is made just as if it was. Now what is that supposed to mean?

But there is one word that annoys me more than anything else. Hehe it sounds like I am getting ready to explode here. I am not.

"Natural". Everybody buys into this. As long as it is natural it is good for you. "Natural" and "Unnatural" it is the simple solution to our complicated food world. We don't need to know anything about nutrition, proper food handling etc. All we need to know is whether the food or medicine is "natural" or not. Because if it is natural we are safe. "Natural" is the ultimate quality and health stamp.

When I read about obesity problems in the US in the newspaper today, I realized what insane levels the belief in "natural" has taken. The article talked about the massive obesity and health problems caused in the US because of abnormally high sugar consumption. Even young children in the US are now developing diabetes because they consume so much sugary drinks in school, cakes and what not. But I am not going to go further into detail about that part of the article. The point is that they end up interviewing the sugar producers.

The sugar farmer essentially says that since people are getting more conscience of what they eat now and want natural products, they should eat sugar because it is a natural product!

Alcohol, tobacco, opium and sugar is all natural, that doesn't make it healthy! It is possible to make water artificially by combusting hydrogen and oxygen. You can't get any purer and healthier water than that. And still it is not natural. "natural" water is frequently not health at all because it contains bacteria and micro organisms.

Not long ago there was studies about a popular medication that proved bad for you health. Yet this medication contained only natural ingredients.

In many ways natural medication is at best without any effect and at worst, worse than synthetically produced medication, because they are not subject to as stringent testing requirements as those type of medication.

Neighborhood fire

2006-12-07T11:30:00.000+01:00

This morning I woke up from the sound of a large explosion. It didn't quite sound like a normal one because it had a very deep sound. However I kept on trying to sleep, because for some reason it is not that uncommon to hear explosions here.

Later I thought it was strange that it was starting to smell burned in my room. Because I was awake I had to go to the bathroom. When up, my flatmate told me there was a fire in the neighbor house. He said because it was so close and because of the wind it might catch on here too.

I don't know why but that didn't really alarm me very much. I just thought, nah it is probably going to be fine. Perhaps because I experienced fires on occasions before, even in the house I slept in.

But regardless I got curious and walk downstairs to look out the windows to see where it was burning. When looking out the backyard I could she black smoke filling almost the whole sky, with small pieces of burning material being thrown up in the air with the smoke. It seemed as if the smoke came over the house from the other side. So I went to the living room and looked on the side and saw the secondary school across the street lit on fire. I could even walk up stars and look down on it. It was a huge fire and the smell of it was strong in my room even though my window was closed. Down on the street there were police cars, policemen and firemen running around.

But the street was quite wide, so I didn't worry about the fire spilling over and I was still very sleepy, so I went to bed again.

This morning a big policeman rang on the door bell. He was looking for witnesses. He asked if we had seen any suspicious people around the building before the fire.

I guess some pupils didn't like their school very much.

Norwegian speech

2006-12-02T16:14:00.000+01:00

The third thing to notice when home, was the way people communicate.

When looking at some magazines in the store I noticed the people behind the counter swearing to each other. Something about "Should we bother about this shit" or "what should we do about this shit". It just occurred to me that this didn't seem like a strange thing to say here. While I imagine employees in a dutch store would not talk like that. Of course it is hard to say since my dutch is not that great.

The other thing I noticed was how both workers spoke completely different dialects. The other thing being all the people in the stores that speak swedish. My buss driver today happened to be swedish. It can not be easy to live in Norway as a foreigner and learn the language because you will constantly meet people with very different dialects from the main spoken language and often they don't even speak Norwegian. They speak swedish or danish. We are so used to this situation that we don't really think about it. But it got clear to me when I was trying to teach my girlfriend Norwegian. When listening to a Norwegian radio show, she wonders what kind of strange dialect one of the debaters has. No wonder it seems strange because it wasn't even Norwegian but Swedish.

We are so proud here in Norway of the fact that everybody can speak their own dialect. Unlike what is common elsewhere there is no requirement to speak standard Norwegian in radio and television. But we never seemed to have offered any thought to the fact, that this must be quite troublesome to foreigners who try to integrate into our society.

Apple Game Console

2006-12-02T12:41:00.000+01:00

Everybody have their own ideas about what Apples strategy should be and what they should use all their spare cash on. Everybody have their pet projects. Unfortunately most of these ideas are the result of wishful thinking. In the sense that it is about what people would like to have. However these ideas frequently make no sense what so ever for Apple from a business or strategic point of view.

Every week we hear that Apple should quit making hardware, and license OS X like Windows, just like Microsoft. This is of course just wishful thinking on part of the people that propose the idea. They are a basically people who want a Mac, but they don't want to pay for it. So they think if OS X ran on a regular PC they could get the whole Mac experience much cheaper. But of course it this makes no business sense for Apple. Why should they be able to beat Microsoft at their own game? Apple has a monopoly on their platform. Why should they voluntarily give away a monopoly? When everybody knows a monopoly is the most profitable way of making money.

The the other idea that they should just make hardware and put Windows on their computers is equally out of touch with reality. Again why give up a monopoly? If they used Windows they would have to compete directly with all the other PC makers, which would render it impossible for them to charge a premium.

Which brings me to game consoles. Part of the reason why they are so profitable is because they are a closed platform. Thus the makers can overcharge for everything because they are essentially a monopoly within that platform. In some sense the game console world has a similar business model as Apple. Except it is turned up side down. It is software sales that subsidize hardware. While in the Apple world, the profits from hardware subsidize development of Apple software.

I am here proposing the idea that Apple should make a game console. But why? There are a number of reason why this would be a bad idea. That anybody can point out. Apple is not already in the market like Nintendo and has no previous experience with it. Nor are they as large as Microsoft and Sony that they could accomplish the task with shear financial muscle.

The second question is, what is it for them. What purpose could it possibly server to make yet another game console? The market is already saturated. There must be easier ways to make extra money?

From this it is clear that entering the game console market like Microsoft did is not going to work for Apple, nor will it benefit them in any way. They should only do it in a way that can leverage Apple's existing strengths. This is what we have seen Microsoft do again and again, leverage their control of the OS to get into other markets.

Apple has a unique strategic advantage that nobody else in the computer business have, which they should attempt to exploit more. They are the only Computer manufacturer that full control their platform. They control both the hardware and the software.

In what way is this relevant for a game console? The business model of a game console can only work if the platform is closed. Why?

The demographic of console buyers mean that those who buy it can not afford single big expenditures on hardware. So the console has to be cheap. At the same time the hardware has to be powerful enough to run games. The solution to this problem is of course to sell the hardware at subsidized prices and then cover the cost by getting royalties from game sales. But if the platform is not closed, anybody could sell software without paying royalties and there would be no way to subsidize the hardware. Furthermore if it was not closed, when hardware prices actually dropped and the manufacturer could start making a good profit on it, the market would just be entered by competitors that would undercut his/her console prices.

Mac's always suffered from having few game titles available. Apple can't solve this problem by simply making a mac model with a game pad and call it a game console. First off since Apple gets no royalties from game sales they can't subsidize the hardware and will thus have to sell it with profit. However that will make it too expensive for its target group and nobody will buy it.

Apples business model for a Console
So here is how I suggest Apple should do it. Since Apple already makes computers they can save a lot of R&D costs, because what they simply do is to make Console that is very similar to existing Macs hardware wise. What will be different will be the business model. Unlike the other Mac models it will be sold at below manufacture cost.

But before they can do this they should try to exploit their current mac market share for their console. Otherwise there will be no particular reason for anybody to get a Mac console over another console. They could do this by creating a game API. Preferably based as closely as possible on existing technology like SDL and OpenGL.

By targeting the API, developers should be able to create games that run on both regular macs and a mac console. To prepare for a console Macs could be bundled with a game controller, so that games could be designed around it.

So in the first instance developers would make games for Mac, as before but they would be adjusted so they could fit a future console. When a critical mass of games has been made Apple could then introduce a console. The Console would have a critical mass of games to be able to sell a certain amount. Of course Apple is getting no royalties from games to subsidize the hardware so this strategy is not sustainable.

To deal with this the old Mac games that now run on the console could be view as first generation games. The second generation games that can utilize the full power of the console will require special license for the game developers, that require them to pay royalties to Apple.

And now developers will be willing to release games for the console because a lot units will have already been sold because of the first generation games. The license should also allow the games to be run on regular Macs. This is actually a win-win situation for both parts. If people buy a console game to run on a Mac, the developers don't lose any money, it cost the same. Apple probably makes more money because they make a profit on regular Mac's unlike the game console.

This strategy has two benefits, for Apple it means that the Mac platform will get more games, which will increase the Mac's attractiveness as a multipurpose computing platform for the whole family. For developers it means that a game can always sell even if it console sales are not great because of the existing Mac market.

If this is so smart why don't other do it?
For Microsoft this strategy would make no sense. They don't need to make the Windows PC more desirable as a multi purpose platform because it already is. Besides they are almost already doing it. Since porting from XBOX to Windows is not that difficult. Nintendo and Sony don't control a computer platform like Apple.

What the console should and shouldn't be
For the strategy to work, it is essential that the console has quite similar hardware as a Mac. This creates some limits. Apple can not use esoteric designs like the PS3. This would limit the possible raw power of the console. They should thus not attempt to compete with XBOX or PS3 on power, but instead use a more Nintendo like strategy of making cheap consoles with good games. The goal here is not to become the most dominating console but to expand the Mac platform user base and make regular Mac's more attractive.

Like the iPod and iLife apps it is all about expanding the Mac ecosystem and creating more compelling reasons to chose the Mac platform. By tight integration and the digital hub idea they could create some unique user experience and possibilities. E.g. the iPod could be used as memory stick on the console, or perhaps firewire target disk mode could be used to use your Mac as a hardrive for the games console. Thus there are a lot of ways one could shave off cost for the console without sacrificing utility.

Norwegian cold

2006-11-30T23:07:00.000+01:00

The second surprise is always that it is not as cold as I had expected. I get used to how a particular temperature feels like from the Netherlands. But in the Netherlands it always feels colder than Norway at the same temperature. Perhaps because of the strong winds, frequent rain and moist. The dutch imagination of Norway, as well as pretty much any foreigner I meet, is that Norway is some sort of ice hell, constantly plagued by a bitter cold. We only have one season and that is winter. Norwegian kids have never seen the ground because it i always covered by snow. Or at least that is what I start imagining that they think.

I always get strange looks from people in Holland when I complain about the cold. The idea is how can I possibly ever feel cold in Holland when I come from Norway?

Of course I used to have the opposite idea about countries farther south. Like they would never be a time were they would be cold. But my lebanese friend assures me that it is indeed quite chilly inside at winter time in Lebanon.

But I think these misconceptions on both sides basically boils down to what you have learned to deal with. Norwegian houses always stay hot, unfortunately also in the summer which can make high temperatures a miserable experience. Likewise houses in hot climates stay quite cool, unfortunately that means they are cold in the winter. Even in the Netherlands which is not particularly hot, I notice that houses get a lot colder inside at winter time than at home. Basically insulation is not as good and their houses have a rather sparse amount of heaters.

Then of course there is the issue of clothes. Its not that we up here in the cold north are actually any more resistant to cold. Rather that people in the south sometimes seem to have know concepts about how to dress for the cold. They complain about how cold it is and yet they have no gloves, hat, scarf or warmer underwear on. Well duh!?

Norwegian Air

2006-11-30T22:51:00.000+01:00

So I landed in Norway again, for a short 4 day visit. As with every time I come back to Norway, the very first thing I notice when I step out of the airplane is the air. It feels so fresh. I suck in extra amount of air just because it feels so nice. And every time I experience this I wonder "Is it just my imagination?" How can one actually feel the difference in air quality? Or does it have anything to do with air quality at all? Maybe it is just the particular mix of moisture in the air here.

The Nordic Model vs the rest of Europe

2006-11-25T13:13:00.000+01:00

The word Scandinavian model is actually silly because it refers to the economies of the nordic countries. Unfortunately even well known news paper seem to confuse the term scandinavian with nordic. Thus a Swedish economist when asked about the Scandinavian model, said there was no such thing but there was a Nordic model.

Apart from clearing up that, I didn't actually get into what makes the nordic model different from the rest of europe. It was too much about the difference between the anglo-saxon and the nordic, which is not very helpful in explain what is different with the nordic model.

This is basically from what I have been able to interpret from different articles.

Labor market flexibility
Despite having the highest taxes in Europe, and biggest and most extensive government, nordic labor market is far more flexible than continental europe and southern europe. It is easier to both fire and hire workers in nordic countries than in Germany, France, Portugal etc.

Active state involvement in labor market
In southern and continental Europe the state might protect your job better than in Nordic countries but there is little push from government to actually get people into jobs. In Nordic countries on the other hand government is actively pushing people into employment. If you are unemployed you have to accept work offers, otherwise you don't get any benefits. Even if this means you have to move to another part of the country. If it is not possible to find work for you, there are usually programs for retraining or re-schooling. In essence, nordic countries don't let people just sit on their butt and wait for a job to come their way.

High unemployment benefits and rights
To accept the increased job insecurity in nordic countries, workers are given higher benefits when unemployed and government is more active in getting unemployed in work. Frequently government will create sort of bogus jobs just to keep people in some sort of work.

High level of participation
Nordic government try very actively have as large portion of the population as possible in work. This means assistance for disabled people, as well as generous welfare benefits aimed at women and families with small kids. This means that unlike other European countries most women in Nordic countries are working full time. I believe this is part of the deal with high taxation. In a child unfriendly country, women would have to stay home to look after the children. There will only be one salary, the husbands. To be able to support both economically taxes have to be low. But if government spends more money on childcare, this requires higher taxes, but since it allows both women and man to work, they will still be left with a larger income.

Living in the Netherlands which also has a welfare system, I am actually quite surprised by how common it is for women to stay home and look after their kids or work part time.

Solidarity and compromise
In this respect I think the Nordic model is quite similar to the dutch polder model. Society moves forward by including everybody in the discussion and making compromises for all parts. This is especially true for the labor market. In nordic countries most employees and employers are organized in two big organizations. These organizations sit down and discuss salaries and working conditions. When this has been agreed on both parts stick to the agreement. This creates stability and predictability in the labor market which is important for business planning.

In other countries like France and Italy for instance, confrontation seems to be the name of the game. Strikes and confrontations happen at random times. There is little predictability. And like Britain there is hardly any spirit of compromise between employees and employers. They seem rather to view each other as enemies. Because of this the organizations are not able to work out compromises to solve future problems together. Instead it seems to be about seeing how much you can get from the other part through force.

Can the nordic model be successfully applied elsewhere?
Many countries look to nordic countries as some sort of success formula. Unfortunately I don't think it would work in most places. Each country has its own unique culture and values. This makes each country more or less receptacle to different economic and political systems.

The model depends a lot on peoples willingness to compromise. Nordic culture is not very confrontational so this can work. However I doubt that could work in e.g. France or the US. One can just read about labor conflicts in the US. They are usually very confrontational. Frequently in the past it has also been rather violent. In France you have the farmers and transport workers that block the highways. I think each country has to play on its own strengths and weaknesses.

America can play on its individualism and desire to be different. Something it already does. France can play on its strong intellectual culture. Unlike the nordics it is admired in France to be highly intellectual and educated. But each strength breeds its own weakness that one should look out for. An elitist culture like the French can easily breed confrontation because the ones not in the elite feel marginalized.

The case for the Scandinavian model

2006-11-25T11:39:00.000+01:00

I got somewhat inspired to write this based on a recent article in the dutch newspaper metro, which suggested that the dutch are looking into replacing their beloved polder model with the scandinavian model.

When ordinary people talk about preference for a political system it usually seem to boil down to what they consider is right or wrong. Or rather it is about ideology. Economists might frequently argue in favor of a liberal economic system since that in theory produce the best economic results. Never mind that these theories have some basic assumptions about human behavior which is plain wrong. But for now I leave the discussion about what is best from an economic perspective to the economists (I already argued a lot in favor of flat tax on this blog so nobody needs to accuse me of being a pinko ;-) )

In Scandinavia people would regularly argue in favor of the scandinavian model with arguments like "It is not right for businesses to make money on sick people. Public transport (or insert any other important industry) is too important to be left to the whims of the market forces."

Proponents of the anglo-saxon model (or simple the american model) would say things like "I don't want government to tell me what I can and can't do. People on welfare steal money from people who work. Things are best left to businesses because government is inefficient and bloated"

Now I must confess, I don't actually like any of these ideological arguments in favor of any system.

To the leftys in my own country:

Companies making money on people being sick or miserable (private health care), is just a rephrasing of companies making money on helping sick and miserable people. It is all a matter of perspective. You could also say that nurses and doctors also make money on sick people.

Wether health care is run by private or public should be irrelevant. What matters is who pays. If government pays your hospital bill, does it really matter to you wether you were treated on a private or public hospital?

I have never really seen any examples of what terrible things could happen if strategic industries is on private hands. Of course it makes sense to have certain industries under more state regulation because of the market situation

Anyway this was not supposed to be about more of the scandinavian model. Sure I think scandinavian countries could be more liberalized. But I still believe in the core ideas of the scandinavian model.

I believe in a generous but demanding state. I think everybody should have access to quality health care and education regardless of income. And I believe that employees should enjoy a certain level of job protection.

Private enterprise is not inherently more efficient than government
So let me address some of the arguments usually leveled against these ideas. "Private business is more efficient and better at organizing things than government, and thus health care should be provided by private business, not government".

This kind of argument displays completely lacking understanding of market economy. The reason why we usually let business take care of things rather than government is for more complicated reasons. It is not really about private enterprise vs government but free market vs monopoly. A free market can more efficiently allocate, use and distribute resources than a monopoly. So it is preferable. Thus multiple companies operating in a free market to provide a service will give better result than a monopoly run by the government.

But it is important to note, here that it is not because the businesses are privately run that they are better. In fact a private business might be performing far worse than a government controlled one. However the free market makes sure that such businesses are killed in competition.

But what happens when there is a business with a natural monopoly? E.g. railroad companies, water works etc? Then a private business is no better than a government controlled one, because there is no free market to shape it up.

So it is not that private business is inherently better than government, but that the free market is better than a monopoly.

Tax payers money
Then we have the "tax payers money" argument which comes in all shapes and sizes. "If I am not sick, why should I pay for people that are sick all the time?" or "Why should I pay for people that just live on welfare and are too lazy to work?"

Problem is that people seem to think that it is only when they pay to government that they pay for free riders. Or when tax money goes explicitly to social programs.

Let me elaborate. When you pay for any kind of insurance: car insurance, health insurance etc, you are also paying for someone else that crashes more than you or is sick more than you. If you never have a accident with your car your entire life than all the money you spent on your insurance is essentially lost to profit for the insurance companies and the ones who do have accidents. So instead of complaining about tax payers money one could complain about insurance payers money.

In fact I think tax and insurance serve very similar purpose, at least in welfare states. One can imagine a system were you pay a certain amount of money each month as unemployment insurance. What this basically means is that should you be unlucky and loose your job, you still get some money to live off. The funny thing is that I doubt that people who are such strung advocates against spending tax payers money on these kind of things see much problems with this insurance scheme. After all you are paying the insurance yourself.

Except it is no different. Some people will be lucky an never need to take out the unemployment insurance while other will often. The latter will spend the insurance money of the first. Or in a welfare state, the others tax money.

So in a sense tax money to welfare is the same as money to insurance. Which means paying higher taxes for welfare, is in a lot of ways like paying for security. There is nothing inherently wrong about paying for security.

One might however argue that insurance unlike taxes is voluntarily. You can choose to be left with more money in your pocket or have more security. However a market for insurance suffers from the problems of a market with imperfect information. The result of this is that insurance companies will expect those that get insurance to be very likely to need it. That is why they get it. So they charge more. This makes it even less desirable for those who are less likely to need it, so they opt out. Leading to a vicious circle were insurance gets more and more expensive.

This is essentially what happened to American health care system. Which is why it is extremely expensive, has only partial coverage and performs quite poorly.

What this means is that if one wants a well working insurance system for health care or unemployment, one simply can't have a system were you can choose to be in it or not. This is why the health system that are privately run and actually work, use a mandatory system were everybody has to have insurance and nobody can be denied it. Thus breaking the vicious circle.

So if one wants good job security, individual choice is not really possible. Either everybody gets it or nobody. In Scandinavia the choice is that everybody gets it.

The price of crime
While allowing unequal distribution of wealth can have good effect on economic growth both according to practice and economic theory, it has a number of side effects which are not included in normal economic theories.

A wealth of statistics show that unequal distribution of wealth cause crime and social problems. This is also firmly rooted in research done on happiness. While happiness is affected by absolute wealth it is also affected by relative wealth. Thus the old economic argument, that by allowing inequality, the poor will become richer faster and thus their absolute wealth will thus soon equal what it would have been under a more equal distribution regime.

So there are several factors that affect crime: police force, punishment and wealth distribution. Of these statistics seem to support most strongly that large police force and more equal distribution of wealth both lower crime significantly.

In America people are willing to pay more money to be "tough on crime". But they are not willing to pay money for a better life for poor people. Despite the fact that by and large, but areas are ways to fight crime. Somehow the ideology, that one should not pay money to lazy or unsuccessful people is so strongly rooted, that they rather pay money for a larger police force, although that actually doesn't add value to anybodies life.

So as far as I see it welfare economics is a lot about choosing to pay for a more harmonious society. It might sacrifice economic growth in the short run, but over long time I believe it creates a more stable society that is able to grow for a longer time.

An Inconvenient Truth

2006-11-25T02:33:00.000+01:00

Today I watched the movie "An Inconvenient Truth", staring Al Gore, the former US Vice President. It is a documentary both about global warming, Al Gore, and Al Gore's long fight for the issue.

While I had heard it was a good documentary, and I had positive expectations I wasn't entirely sure whether it would actually be good or not. The thing is that environmentalism is such a political correct issue these days, that you can't expect main stream media to talk down any movie or person that champions it.

Some movies like the day after tomorrow tried to put forth the climate issue but it ended up being quite pathetic in my view. I was afraid that this movie was going to be overly emotional like a lot of American movies often get.

But I was very positively surprised. Of course some emotion was in there, but you can't get away with that from an American movie. But what amazed me the most was the immense effort and devotion Al Gore has put into this issue over the years. And it has not been about screaming and yelling. No, he has spent considerable time traveling around the world and seeing climate change effect for himself, and talked to a large number of leading scientists. In fact he has been discussing and learning about these issues from scientists since he was a young student.

It was very impressive the data and statistics he presented and he managed to convey it in a very understandable manner. I never doubted that we were experiencing global warming due to man made emissions. But I still considered it a bit of an open issue how the earths feedback system would balance things out. Al Gore's presented data though was a sort of punch in the face. It made me realize how strong the correlation between CO2 content in the atmosphere and temperature. But most of all what he managed to convey best is how urgent it actually is not act now. The changes that are happening to the environment today are actually accelerating. We might not have much more than one generation to fix the problem. That is not a lot of time.

Some make it out to be that global warming will spell the end of the earth. Of course it isn't. The earth itself will survive quite fine. To problem is us. And I think Al Gore conveys that pretty well. We are facing a natural catastrophe, that although it won't destroy human kind, it will be more devastating than any previous war before.

It is as if knowing that there will be a war on the scale of WWII, only larger in 50-60 years. Like that war it wont mean the end of us, but it will mean immense destruction, suffering and economic loss. Knowing this is were we are heading within such a relatively short time. How can we afford to not do something?

We are literally talking about the lives of our children. It is not a metaphor for generations long into the future. It is up to our generation to fix the problem.

It makes me wonder how I can help fix the problem. I don't believe this go back to nature ideas. We are too many people for that. Nobody would buy into it anyway. You could never convince people to sacrifice their whole modern life, even if was to save us from a catastrophe in the future.

But people could try to minimize their energy footprint as much as is possible without too many changes. For my home country Norway I think more people should switch to burning wood for heating as opposed to electricity and use energy saving light bulbs. But in the end, to make really big changes I think there has to be political initiatives.

More money has to go into alternative energy research. CO2 emission must be made more expensive, and some though choices has to be made. I think a problem today is that we want everything and don't want to sacrifice anything. We want modern life style, low CO2 emissions and be nice to nature. But we have to make choices.

People are against windmills because they make the surrounding nature look ugly and they destroy the habitat for some species. But I think ugliness of windmills is a small price to pay for the catastrophe that would otherwise await us. Nuclear power should also be reconsidered. It is time we put away the ghosts of Chernobyl. It is not something that is even remotely likely to happen again.

But most important of all I think, is to push the transition to the hydrogen economy. Because the transport sector is the only sector were there really is no substitute for oil at the moment.

Ok, before I go off on a tangent here. I really recommend this movie for anybody.

Does less government mean more freedom?

2006-11-11T21:11:00.000+01:00

Sometimes things I read or hear at different places that have nothing really in common conspire to make me think of some weird connection. Last connection went something like this: I had recently been reading about what a mess Iraq had turned into in Time Magazine, more specifically how powerless central government there actually was. People were just going about their own business.

Parallel to this I recently watched Borat (more on that later). Because of that I looked up Borat on YouTube which, moved me to Ali G which again made me end up looking at a clip from one of Sacha Baron Cohen other alter ego's the gay austrian fashion designer Bruno.

These two things don't seem very related to each other now do they? Well in my mind it made a connection.

Bruno interviewed this sort of stereo type white american guy. The guy was going on about how he was fighting for freedom. What asked what that was about he replied something along the lines: that government should not tell him what he could and couldn't do. It was kind of ironic then how negative he got towards Bruno being gay. I mean if he was so much about everybody doing whatever they wanted, then what was the problem of Bruno being gay?

I also thought about how the Iraqi government is essentially unable to enforce their will. Neither the police nor the army has allegiance to them. Instead each member of the police or army will follow the agenda of whatever ethnic group they belong too. In a way the Iraqi government is any right wing republicans wet dream. A government with no power that can't tell anybody what to do. It is actually the same for the Afghan government. They have no power. And people are free to own as many AK-47's as they like. National Rifle association must be thrilled.

And yet anybody who claims Afghans or Iraqis have much freedom would automatically qualify for the mad house. Iraqis don't have the freedom to walk outside their house because they can get shot. They don't have the freedom to have any haircut they like because they can get attack by religious fanatics for doing so. They don't have the freedom to live were they want. They have to live where their own ethnic group lives otherwise they will be killed. Yet none of these restrictions are placed by government. Afghan women are frequently being denied education, fair trail when being raped etc. Again not because of government.

In fact people in these countries lack basic freedoms because government is too weak to give it to them. It is ironic that the brutal regime of Saddam Hussein in many ways gave more freedom to ordinary Iraqis. They could go to market to buy food without fear of being shot by insurgents. They could cut their hair in whatever way they wanted without religious lunatics threatening their lives. Of course I think Saddam was an asshole and I don't wish him back. But at least it illustrates that government is always needed to give basic freedoms to its people. Even a brutal government is probably better than no government.

Now this is not about the Iraqi war, but rather about the neocon hypocrisy about government and freedom. Reagan talked about government not being the solution but the problem. They always talk about government needs to become smaller because government is bad. Government is bad because it tells you what to do. Thus big government is bad goes the logic. It is always nice when you can define words at your own pleasure however. For neocons big government means things like the state collecting more taxes and spending more money on education, social benefits, health care etc. Somehow I fail to see how this restricts anybodies freedom. On the other hand bigger spending on military, more power to secret services like CIA and FBI and laws like the patriot act, somehow isn't big government in their eyes? Strange because I thought these were all instruments in which the state could wield more power against the people or restrict their freedoms as with the patriot act.

This is what I call the republican hypocrisy. E.g. Increasing taxes to pay for health care for poor people is taking away peoples freedom, while banning gay marriage, stem cell research and severely restricting civil liberties with the patriot act is not?

Conclusion
I don't think freedom can be explained so easily as being about more or less government. More government does not automatically give more freedom nor does less government. Government does not give people more freedom if it regulates every little part of their lives, but it doesn't give people more freedom either if it does not regulate and enforce enough laws to hinder the strong from tormenting the weak. In the end the notion of big government is stupid because it too often implies something about taxation level, which is only remotely related to individual freedoms.

Back to Windows: second day

2006-11-08T21:22:00.000+01:00

Today was a slightly better Windows day. Google lit up my windows life a bit. I downloaded the google pack. I didn't get around to trying very much of the apps. But what was enough for me was that I finally had something that worked more or less exactly like spotlight. It was a relief to be able to quickly locate any file on my hard-drive with the google desktop search. It seemed to work just as fast as spotlight. Only downside seemed to be that it depended on a background process indexing your files constantly.

But there were new and old Windows annoyances again today. I installed some more apps and again I noticed all the annoying completely unnecessary questions. E.g. Thunderbird let you chose between custom or simple install. Except custom install doesn't give you any more options, so they make you answer yet another unnecessary question. Then of course the usual, do you want a link here or there, do you want to launch the app after install etc.

Now given that both Firefox and Thunderbird are cross platform and basically the exact same app is installed on OS X, it is obvious that all these annoyances are not actually necessary. But it seems that although Windows don't require or enforce this kind of behavior for installers, the custom is so ingrained that everybody just do it.

I just pray that all these pop ups and are you sure you want to do this questions wont overtake OS X the way they have Windows. We already had a change for the worse in Safari with that. Every time you download an app now you have to click okay, right after it finishes download.

Printing
Printing is not something I know very much about, because seldom do the printer configuration myself and have not owned that many printers. What I do know however is that every time I have plugged my Mac to a printer whether on a network or directly it has just worked. It required no choices, driver or software install on my part. When I plugged a printer into my LAN using airport, I didn't even have to search for it on the network, it just popped up in the printer list.

Get access to a printer on my Windows box at work though was a whole other story. I let the others that work there fix it for me. That sure took its time. First they had to figure out which printer on the network actually corresponded to the physical printer located behind me. When they figured that out, Windows asked them to specify the printer brand. After that Windows wanted us to tell it which one of a zillion different Epson models in a list was our Epson model. We couldn't find it.... ah well it did eventually work, after a lot of wasted time.

Program crashes
Windows XP might not crash and burn into a blue screen like in the good old Windows days, but it doesn't mean crashes have stopped being a problem. Several times I experience apps hanging and then almost taking down the whole OS. The OS remained unresponsive for a quite a long time. Long enough for me to wonder whether I should just reboot. The other problem is that apps stop doing repaint in Windows when they hand and so you think you got the kill app dialog open, and you click kill like crazy only to realize that there is no dialog there. There is only left over pixels because a redraw hasn't happened. How are novice users going to understand the difference between left over pixels and a dialog that is actually unresponsive?

Redraws
I couldn't remember this from when I used XP before, but perhaps it was very noticeable now because I am used to OS X's smooth double buffered windows.I could very clearly see the windows being redrawn when I moved them around. And this was on a 2 Ghz processor, with a good graphics card!! Not only that but when I moved a Window over acrobat reader, it was simply pathetic how visible the redraws were. It looked unprofessional an unpolished. Kind of the same feeling I got when I used Linux the first time (Red Hat 3.x something). That was back in the day when programmers seemed to have been making the icons and graphics themselves.

Hotkeys
I tried pressing a lot of buttons today to do things like quitting apps and closing windows from the keyboard. But without any luck. I still believe there should be something, except I haven't found the keys yet.

Handling Windows
I hate it how Windows insist on blowing up all the apps I launch to full screen each time I launch them, even when they contain very little information and do not need to take up all the screen real-estate on my big LCD.

I find it inefficient to work with many windows and apps open at the same time compared to OS X. I can throw the mouse up to the menu bar always on the top like on OS X to access the menu items. Instead I got to more carefully aim to hit the narrow strip of menu within each window.

That there is no notion of running applications, just open windows strike me as very retarded now. I close all my browser Windows in Firefox, but the app keeps running because the little download window is still open. That just don't seem right. Or when I work with an editor, I close a file because I am done reading it, and I want to open another file afterwards, except this closes the whole app!! So I have to relaunch it to access the open menu again.

GUI: Floating panels
Windows IDE's are typically contained within one big window which contains a number of panels for different functionality. E.g one for editing files, one for browsing files in the project, documentation panel, different debug panels etc. When you try to rearrange these panels everything jumps around like crazy. Moving the panel into the position you want is an art. E.g. I wanted a panel in the bottom left corner. I kept moving it around looking for the and outline that would indicate that it would place itself at the bottom. But no. I gave up and moved it to the top left corner. Then I moved the panel that got pushed down up, and I managed what I wanted.

I can't help feeling that it is a bit ironic that MS is coming up with all these fancy GUI metaphors to deal with problems caused by this and an ever increasing large number of floating toolbars (which have the same placement problems), when this problem was pretty much solved long time ago in the first GUIs. By using floating palettes and don't use one big enclosing window you solve these problems. However I don't think xCode is that great UI wise, but it is a sort of anomaly. It would probably have been better if it was more like the IDE in the OpenStep days. Although some of its problems can be solved partly by simply using a larger screen.

Conclusions
I think that over time MS can never truly beat Apple on the OS scene interface wise. The problem is that they can't alienate their users completely by changing some of the very basic ways in which windows works. This means despite all the new advance technologies MS puts into Windows, we will still be stuck with: drive letters, menus inside each window and no notion of apps as an entity. I also doubt the way MS does MDI's is going to radically change.

Back to Windows: first day experience

2006-11-07T20:19:00.000+01:00

When you live abroad for a while you can come back and look at your own country with fresh eyes. You don't take everything for granted anymore. Going back to using Windows after using Mac almost exclusively for 3 years feels a bit the same. There are so many thing about Windows that one takes for granted after using it for a long time that you don't notice it anymore.

Of course I have used windows now and then during these 3 years but it has mainly been to surf the web and write some email. But now I am starting an internship where I will be developing on a windows box. So I had to go through the whole procedure of installing and configuring apps.

Installing apps
First experience was installing apps. What I noticed that annoyed me was that installing apps on Windows XP requires considerably more worthless clicking than on OS X. There is always this wizard like installer were first you chose installation type, then there is the question where you want the app, then if you want a link to be added to the desktop. When it finally installs there might be a question to view last notes. And at the very end there is a question whether you want to launch the app. Seriously, do we need that many f..cking questions?

I am comparing this to a typical Mac install: Just drag the application to were you want to it and it installs. Then you can forget about it and start with the next app. If you want last notes just open the last notes file in the mounted .dmg. If not it is not a question you have to make a choice about. You don't have to click next in the wizard past this option.

Running apps
When you first run an app you notice windows love for pop ups. Always you get todays tips that you got to click away. Of course every time I boot an XP install with some apps. There always seems to be all these annoying pops up down in the system tray, telling me all these things I don't give a shit about. They are just annoying and I need to click them away.

Then there are things like configuring the app or entering license key. Non standard. You never know quite were in the menu these options will be located. On OS X these options menu options are always in the app menu (before file menu).

Paths and Drive letters
Now, I never liked the deal with paths and drive letters in Windows so this is not exactly a new discovery. But this time a friend was helping me do a lot of the configuration, which is a Windows fan, and still even though we were both looking at it things got messed up.

I was supposed to set up a project from SVN with Visual Studio. The project needed to copy some files to another directory after each build (a .dll). Here was the first problem. For some reason my computer used H: as the drive letter for the main hardrive. C: was interpreted as removable media. But all the other guys used C:, so the copy statement put into Visual Studio didn't work, because it used C: and I had H: on my computer. But we couldn't change this because then it didn't work on the other computers.

The second problem we ran into was that we couldn't manage to get the SVN checkout to work. The problem? We specified paths like this: "directory\file", the normal windows way. However it turned out that it was supposed to be "directory/file". That is the problem you almost never know on windows. On OS X (Unix way) it is always "/" that is the path separator but on Windows it could be either "/" or "\". Use C/C++ or a web browser and you use the Unix way. Use cmd or file manager and it is the other way. For anything else you never quite now, and you don't get very informative error messages when it goes wrong.

Finding files and programs
When installing we had to determine what needed to be installed and if it wasn't installed we had to find the install package and install it. I cringed when I saw my window friend trying to figure out this. He first manually looked through the start menu to see if the program was there, then when he couldn't find it there he went into program files folder and started looking through that. Finally he decided it wasn't there and started looking through all these different file shares for the install files.

I was just thinking while he was mucking about this, "If only we had spotlight and I would have just typed in the dam app name, it if was there I would have found it if not, I would have found the install files right away".

Consistency and robustness
One of my first impression was that the look and feel of windows apps differ greatly. In any OS X app hit apple+w to close a tab or window. On windows this only worked in Firefox. Programs were very bad at updating the UI. If I checked in a file with tortoise, or changed some configuration in Visual Studio or my coding editor (don't remember name), the GUI would frequently not update. Instead you often had to close dialog boxes and reopen them or go out of a directory and back again (hitting the refresh button didn't work). I notice these kind of glitches because I am not used to them in OS X. Perhaps because the Cocoa model view controller paradigm is used extensively, so dependent part of the GUI gets updated when another GUI changes some data. When coding in Windows before there didn't seem to be as much tradition for this in the toolkits and frameworks. It was more up to each developer to take care of.

Reboots
When I first started using XP back in the day I remember thinking it was so great because you didn't need to do all those typical Windows reboots. Perhaps I didn't think it was so bad because it was a dramatic reduction in the amount of reboots you needed before. But when I used XP now I couldn't help getting annoyed at the seemingly endless amounts of reboots as I installed new software and made configuration changes.

Final thoughts
A couple of things are still nicer in Windows. I absolutely hate how Finder insists on sorting everything on name. Why can't we please get the directories first!! What benefit could having the directories mixed among files possibly have? Kudos to file manager for this.

Windows XP also has a lot more hooks in many places so they can do thing like having version control integrated with the file manager, that is nice. Visual Studio has a lot of nice features and much more robust implementation of code completion than xCode.

However I can't help feeling that I am using something quite old fashioned when using XP. It seems very long in the tooth compared to the current incarnation of OS X. It shows that there hasn't been a major OS update in a long time. Things I use extensively and all the time while working on a computer like spotlight and expose is missing.

Extensive use of search fields is also missing. It is painful to navigate all the compile options in Visual Studio compared to xCode for instance because the lack of a search field. Same goes for preference panel.

Vista will fix a lot of Windows problems and bring it more on pair with OS X interface wise (under the hood it will be far more advance in places). However I don't see Windows catching up to the clean OS X interface in a long time. There are a lot of Windows apps out there that are not going to switch to a new GUI style as soon as Vista is out. Meanwhile OS X has been out for quite some time and most apps have adapted a common OS X style interface. This means as a Mac use, most apps you use will look and feel very similar, and take advantage of recent trends in GUI design like e.g. extensive search capability.

I am a bit ambivalent about the improvement of Windows. Of course it should be better, because that increase competition and force Apple to improve, it is also better for me because it will be more of a pleasure for me to use Windows at work. I have no illusions about what platform I will using for work for all foreseeable future. At the same time it is a pity with Vista because MS regains a huge gain Apple has had over Windows. Today it is quite plain to see how much more modern and far ahead OS X is compared to XP. This should help Apple gain some market share. With Vista the reason to switch will be a lot less.

Unless Apple has something hidden in their sleeve I don't see Leopard as making and huge difference. Sure it has some nice features, but it won't make OS X look as far ahead of Windows as Tiger does now against XP.

We thought we were free

2006-11-05T03:08:00.000+01:00

Some time ago I read this quote:

Naturally the common people don't want war; neither in Russia, nor in England, nor in America, nor in Germany. That is understood. But after all, it is the leaders of the country who determine policy, and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. ...Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country.

Reading that quote today, one might be quick to judge it as a comment from some lefty or some bleeding hearth liberal (like the neo cons like to say) to the current and past policies of the Bush administration regarding the decision to go to war in Iraq.

But what is so scary about this quote is that it is not. This quote is from no other than Hermann Goering, second in command in the third Reich. Goering said this during the Nuremberg trials.

What is even more scary is that I read this in a book about Nazi Germany, which was about how it was to live in a dictatorship. What Germans said was that they didn't feel like they were living in a dictatorship at the time. They thought they were free. Perhaps not strange when you never read or hear news about the people that disagree. This book had nothing to do with America or Bush. It was no comment to that but I read this passage from it around the time that Bush was pushing the Patriot act. Then I remember thinking that Goering's words had an erie relevance to the present situation in America. I don't remember what the name of the book was nor did I remember the exact quote later.

But today I read the quote again on slashdot, in a commment by flyingsquid to the suggestion by homeland security to make it mandatory that for anyone who wish to leave or enter the US to have permission from government. It was weird to read because there it was, somebody else making the exact same conclusions as I had before without anybody having suggested to them that this quote had anything to do with America.

The whole article and its implications can be read here.

The US is getting into a really sad state with this. The sad thing is that the people are letting themselves getting screwed, while they think they are protecting themselves. And there seems to be no way of reaching these people that believe this is the right thing. Every time another worried American voice their concern about this problem they are put down as being unpatriotic, as hating America, or perhaps worse as loving France ;-)

People wondered how a highly cultured nation like Germany, a nation that had produced some of the greatest minds in the world and highest level of culture could have succumbed to the barbarism of nazism. And yet we can see history replay itself in America today. Even if it is in a light form. I don't think the US will be another third reich but some of the parallels are alarming.

Oh and please, I don't endorse any comparisons of Bush with Hitler. That is just retarded and shows utter lack of history knowledge. I believe Bush is a good man, that just happens to be misguided, not very wise and hostage to his fundamentalist religious beliefs.

Nostalgia

2006-11-03T23:11:00.000+01:00

Today was a good day. A day that I had been waiting for a long time. My ray-tracer project that had dragged on for over a year finally came to an end. It felt almost too good to be true. So many times in the past I thought I was just weeks away from finish, only to realize months later that I had no idea when it would be finished. But now it is out of my life. I had done my time. I was a free man at last.

It is almost a bit strange, suddenly being free. I don't quite know what to do. For once I can take the whole weekend off and do something for fun without feeling I should have been doing something more important.

The problem with a delayed project is that one can never do enough. You know that whatever spare time you get, you should spend it on finishing the project. Now I am starting my internship which has to last for 7 months. The bad thing about that is that it HAS to last 7 months. Which I can't finish sooner. I would like to be home in Norway as soon as possible. However the good thing is that I HAVE to spend 7 months. This means there is no point for me to spend every conceivable piece of spare time I have to work on the thesis. Instead I can have a normal work week and take the weekend of. And that is a welcome change.

Today was a sunny day, and as I walked towards the library from the Minneart building. I passed the dining center/kantine. I was a bit hungry. If it had been earlier I would have called my old class mates Ben and Rida and asked if we should for lunch. But they are not here anymore. At that time I might also have been heading back to my housing complex to have Norwegian class with my girlfriend. Except she was not here anymore too.

In short, I kind of felt like these days at University had all came to pass now. The project delivery marked the end. There would be no more classes here, no more student parties at Cambridgelaan and the group of friends I used to hang out with had been spread all over. I couldn't help feeling a bit nostalgic about it. It had been a great time. But now there would be a different world.

Immigration

2006-10-29T01:14:00.000+02:00

For anybody not from the EU or EEA, the IND is an infamous and much hated three letter abbreviation. The IND deals with dutch immigration and foreigners.

My girlfriend had the unfortunate experience of coming under their radar because of a stupid technicality and their bureaucratic narrow mindedness. I did turn out fine in the end, but it was not without hassle. Every letter from them meant another shaking the head in disbelief "No, they can not possibly mean this, this is so stupid!".

Now my girlfriend has left the Netherlands, but the annoyance over what has become immigration policy in the west continues.

Lately I noticed a slashdotter write the following in a response to where to live if not in America. One respondent mentioned netherlands which triggered this response:

If you have the misfortune of owning a passport from a non-EU county other than Canada, The USA, New Zealand, Australia or Japan, then you MUST learn Dutch before you enter the country, you cannot bring your spouse or children unless they also learn Dutch prior to entering the country (no learning Dutch after you arrive is not good enough). After you arrive you must go through an integration course (you're generally exempt if you're from one of the "good' countries listed above) where they teach you all the good things about the Dutch way of life.. like how to flush a toilet (yes they taught me that useful skill), how many wheels a car has (yes that was in my course)... how great and glorious the Dutch people are... how superior they are compared to everyone else... you have to answer important questions like... "what are Dutch men best known for?" and the correct answer being "their trustworthiness"

If this was not enough he goes on to mention:

Oh, and yes you can apply for citizenship in the Netherlands but ONLY if you agree to give up your other citizenship. Anyone who tells you otherwise (that it's possible to keep your birth country citizenship) hasn't actually tried to do it recently. Used to be the case that you could retain dual citizenship, but now they won't issue the Dutch citizenship unless you've provided proof that you've legally renounced your previous citizenship. The danger here being... that for 12 years after gaining your Dutch citizenship, the IND can revoke your Dutch citizenship for any reason, and without a court order... so for 12 years your citizenship is at the mercy and whim of the IND... and they have proven that they can and will arbitrarily revoke citizenships of people leaving them stateless for no reason at all.

Last time I was home in Norway I went to the police station and queried a lot about immigration. The women I talked to was quite helpful and friendly. But the rules were complicated and I had to ask a lot of questions to understand how it worked. I don't remember exactly how the conversation went but I said something along the lines that it is annoying that immigration is so complicated. She responded with what I took as a joke then: "You should have found yourself a Norwegian girl, that would have been much easier". It didn't bother me much then because I took it as a joke, although I didn't find it particularly funny.

But when I read the same slashdotter saying:

I have a close friend who is native Dutch and married to an African woman. The IND here told him there was no chance at all that his wife of 5 years would ever be able to join him here and that he should simply leave the country of his birth if he wanted to be with his wife, or divorce her and marry a good Dutch woman like he should have done in the first place. Yup, the IND here did tell him that... I've read the letter they sent him.

It made me wonder how much of a joke it was, what the women on the police station said. Unfortunately the anecdotes keep piling up. A friend of mine at university told me that he was just declined dutch citizenship because he had been 2 months in Italy! He had just been in another EU country in what constitutes little but a long vacation, his mother is dutch and his father is english and he has lived all his life in Holland and yet they decline to give him citizenship. Obviously the system is broken when you decline citizenship to people who for all practical terms are your own citizens.

But however messed up the IND is I would not go as far as to claim that it is a specific dutch problem. I have no illusions that this things couldn't happen in Norway either. Perhaps dutch immigration is slightly more strict at the present but it doesn't change the fact that western immigration rules have become overly restrictive and narrow minded over the years.

We have become so focused on the problems caused by immigration that we have turned a blind eye to the problems caused by trying to restrict immigration. And there are of course problems. The toilet flushing example in the quote for instance does not come out of the blue. There are a number of immigrants who did not have any idea of how to operate toilet and stood on it, thus causing very dirty public toilets.

But these problems seem to me like so many other problems in politics that surface. For instance in Americas eagerness to protect its way of life it impose such draconian laws on its citizens that it essentially end up destroying its way of life itself. Likewise in Norway, because of all the abuses of the welfare system they impose so many regulations and restrictions to prevent abuse that, the system no longer helps the ones it was supposed to in the start. It is as if the cure kills the patient.

Perhaps we should reconsider the problems of immigration again. The problem is not immigration itself but the people that come and their compatibility with their host culture. An immigrant with education and western values is not a problem, he is almost purely a benefit to society. An immigrant with very different culture, values and no education or profession that can be of use in the host country is a problem.

A lot of the problems with immigration there are no easy way to solve. How do you solve the problem of forced marriage through law? You could increase marriage age, or don't allow citizens to marry foreigners. Sure that would help, but it would cause new problems. Unfortunately people never seem to be able to accept that certain problems are not fixable. Whenever something happens there has to be an action to prevent it from happening in the future. What about just accepting that shit happens?

I think the best example of this is how parents in Norway put helmets on their little kids when they were out playing. Probably some kid hurt his/her head while out playing and the parents want to take action to prevent it from happening again. What about accepting that this is life? You can not protect yourself against every single danger in the world.

Likewise I think we to a greater extend should accept the problems with a multi cultural society, instead of trying to fix everything. When two cultures come together there will always be friction but in time it will ease. In time we will adapt to each other and learn to from each other. We need time more than we need more rules and regulations from the politicians.

Race

2006-10-25T03:05:00.000+02:00

Few terms are so politically charged and controversial as race. Not the least because of the Nazis and eugenics. Non the less in my days of political incorrectness me and my best friend in high school debated for days whether the term race could be used to day about different kinds of humans. Eventually we "won" because we found a recent document by the UN which used the word race.

Nonetheless it is easy being politically incorrect when there are nobody else of different skin color around to offend. The fact is that is much as I think the word race still makes sense I can't help getting a bad taste in my mouth every time I say it. Which is why I never use the word. Instead I use words like ethnicity. A large number of scientist say that it is meaningless to separate humans into races because one can not make clear separations through scientific means. Still words like ethnicity, black, white, asian, hispanic are just as messed up terms. In fact I think they are more rubbish. They seem to be based purely on which country or region of the world you originate from.

This issue has lately been popping in and out of my head, not at least because I become so much more painfully aware of it from having a girlfriend that is not of the same.... lets use the "nice word", ethnicity as me. She is asian-american. Thinking about this is not easy, especially when you are white, because one tends to become paranoid about not being racist. Because of all the bad things other white people did some generations ago, white people today are on a constant guilt trip. We are told that even if we think we are not racist, we might actually be. Even if you have a girlfriend that is not white you might be a racist. Even if all your friends are non-white you might be a racist. There is simply no way of knowing for sure that you are not a racist. The only safe way out of this problem it seems, is to persist in saying bad things about white people and always say good things about non-white people. Never call a non-white an idiot, because even if he is an idiot, you can't really know if that is the fact or if you just think he is because you are a racist.

Now I'd like to laugh at all this, because I think it is stupid. But really I can't. Because I am not able to write that a friend of mine or my girlfriend is of a different race than me without feeling I did something bad. Still ethnicity is such a rubbish word. When my Vietnamese-Norwegian friend settles in America, after a few years is he then Norwegian-American or Vietnamese-American? Perhaps he is Vietnamese-Norwegian-American? Or what about the white guys that I met from Mozambique? They were third generation in Africa but came originally from Portugal. When they settle in the US, do they become African-Americans? You are African-American because you come from Africa originally right? Or what about Asian-Americans? In Britain Indians are frequently referred to as asians. But in daily speech most people think of Asian-American as someone who originated from the far east.

I think the problem with the current terms used is that they are used almost like race, but nobody wants to admit it. The terms are very limited in that they seem to assume just one immigration move, or that everything fits in with the traditional American immigration situation. You have a bunch of countries in the world were the same sort of people have lived for generations and then a new country like the US is created and populated with people from these original countries. You can then just tag people based on the county the originate from. In this way country of origin works as an easy substitute for race. And that is how they have been using words like African-American, Asian-American etc I would argue.

But in todays would were people move much more around this taxonomy falls apart. Africans might move to Europe. After some generation they might move to America, are they German or French-American then? Or what if they move back to Europe are they German-American-German then?

A similar problem occurred to me when I studied in America. We discussed what it means to be American. My American friend was quite bombastically claiming that that was easy to answer. If you have an American passport you are an American. I though that was weird because he made such big deal out of me being Norwegian and not American. The question came up because I he wanted me to settle in America and I said "but I can never become American". My friend did eventually see the problem when I asked him "If I get an American passport tomorrow, from that day will I stop being Erik the Norwegian to you? and will I be an American like you, so when you talk about us Americans you include me?" He realized then that that was not the case.

Perhaps there is no easy solution to this problem because neither race, ethnicity or nationality are quantifiable. There is no single even that makes you American, but a whole chain of events and conditions. Likewise there is no single gene or visible trait that makes you caucasian.

Living abroad part1: Learning about Norway

2006-10-25T01:50:00.000+02:00

It is now more than 3 years ago since I left Norway and went abroad to the United State. I was just home in Norway for 4 weeks. It gives a sort of pretext to sum up my experience with living abroad for three years.

I thought about writing about this many times, but it always seemed like such a daunting task. I had to think about how to organize the material and were to begin. But there is so much to say that I don't really know where to begin. So I thought to hell with it. I will just write as it comes to my my mind.

So here goes. I just came back from walking through one of the neighborhoods of the old part of Utrecht. The streets are cobbled, and framed with red brick houses. This is were the first difference emerges. Everything in the Netherlands is so neat and tidy. The streets run straight. There are always bike lanes, they have lowered the sidewalks were you will cross on for or by bike. There are marking for blind people. Everything in the Netherlands has been touched by human hands.

In Norway it is the opposite. In Netherlands nature has yielded to man. But in Norway, when walking through the neighborhoods it is as if you are walking through the wilderness, that happen to have a high density of houses. The roads do not run straight, instead they twist and turn with the landscape. When walking down the street there might be a white wooden house with a big yard on one side and a rock wall overgrown with moss, weed trees and bushes on the other side.

Every green spot in the Netherlands has been carefully manicured. Beautiful flows and plants have been placed there in an orderly fashion. Walk through the same types of neighborhoods in Norway and there are these big patches of land were just weed and trees are growing. As if nobody gave a dam about prettying it up. Under your feet in the Netherlands there are neatly placed bricks, often in elaborate patterns. In Norway there is a patchwork of slaps of tarmac after many years of repairing it. Each winter, the ice tears the ground apart and leave scars on tarmac.

When walking around in the neighborhoods like this I start thinking and analyzing. I like the houses in Norway better in a way. They are bigger and more elaborate looking and more variation in color and shape. The yards are much bigger. But it still makes me feel like they are not part of a city. I is as if I am walking in a cabin area. Each house is a island in the wilderness. In the Netherlands, each house belongs to a shared urban space.

That is what I immediately sense when I am back in the Netherlands. It is old Europe, as sophisticated urban culture. You walk here and you see 100s of years old buildings. You see elaborate iron works on the houses in the form of door bolts or lights. The street lights rich in ornamentation and look like something taken out of Victorian London, while the Norwegian light are simple functional grey steel poles.

Walking around in the Netherlands I can see into peoples living rooms. Se them sitting in front of their computer or watching television. In Norway the yard is too big or there are too many trees in the way to see very much of what is going on in any house. The silence and lack of any trace of life is almost deafening.

A colleague of mine from Colombia once came and visited Norway. I can't remember the question or if there was a question but he said he was surprised by Oslo. He had expected there to be more trace of the Viking heritage. We laughed back then. What had he expected? That we would have dragon heads on our houses and wear helmets to work?

But no I am thinking that the Viking time still lives with us. It is jut that it is so much more subtle that a visitor wont see it and neither will we because we are so used to it that we don't think of it.

That is the benefit of living abroad. I could only superficially say what it was to be Norwegian before. But now I can come back and look at Norway again as if I am foreigner.

And I notice the roughness in the structure of the cities and in the behavior of the people. It is like being in a barbarian country. The people are friendly but they have no concepts of how to conduct yourself in public. There are no politeness phrases, no bullshit introductory small-talk before you get to the real topic. Instead people cut right through and say things the way they are. There is no separation between customer and worker or worker and boss. Norwegians care a lot about honesty and genuineness. Too much politeness and beating about the bush and a Norwegian thinks you are fake and dishonest.

Norwegian politeness
I left Norway thinking were a cold and unpolite people. It is easy to think this when going abroad to places like America were people really know how to small talk and chat with strangers, and say excuse me or sorry even if you are 5 meters away from them, and they are in no position to cause you any trouble what so ever.

But looking again at my countrymen I don't think it is that bad. I often get quite surprised by how friendly people can be. Perhaps I never noticed friendly people before and only the anti social ones? Friendliness here also feels more genuine. It is not a mask to sell more products or a measure to make sure the customer does not become angry. But I can see why foreigners would sometimes consider Norwegians rude. As I said there is no tradition for politeness phrases. But lack of politeness should not be mistaken for lack of friendliness. The englishman might say "Excuse me sir, would you like to try one of our new sausages? Many of our customers have found them quite delicious". While the Norwegian would have said "Hey check out out this sausage! It is awesome! I eat 10 of them yesterday, there were so good". Now neither the englishman nor the Norwegian would say exactly this. It is quite exaggerated. But it is just to illustrate how to say the exact same thing and equally friendly, but in a different way. The englishman does it by showing great respect for the customer by using all the correct politeness phrases. The Norwegian does it by getting personal and talking to the customer as if he was a friend or somebody he knew.

I noticed the same with my self when considering how to address my professors when living abroad. Other foreign student friends of mine said they could not make themselves address the professor other than in the most formal way using title. Perhaps they thought doing otherwise was most disrespectful and rude. To me it felt the opposite. Despite knowing I should probably use title. I found it very hard. To me it felt in a way unpolite. By using the professors title I would create a distance between him and me and signal that I did not consider him a friend or someone I could talk straight with. That I wanted distance between me and him. To me that seems like a terrible thing to do to another person. To create artificial distance.

The Post-Post-Cold-War World

2006-10-21T15:20:00.000+02:00

Lately I have been mainly following norwegian news since I have been at home in Norway. Today I read an article in the New York post which is bundled with the Norwegian newspaper Dagsavisen. It is written by Thomas L. Friedman, who wrote The Flat world, which I have more or less read. Again the typical way for me to read a book. I quite liked the book although I was at times put off by Friedman's hyperbole.

In the article The Post-Post-Cold-War World Friedman talks about how the general reign of stability bought and paid for by the United States combined to create a world in which China and India have been able to rise, and Europe has become whole and free. He goes on to talk about the problems with Iran and North Korea and how the US is out of means to sanction them anymore. He says the only way for the US to move forward is for Russia and China to come onboard the American side. That way pressure could be put on the rough states and Europe would have a spine to join in on sanctions against e.g. Iran. If Russia and China want to see the post-cold-war would continue they can' be free riders anymore, Friedman argues.

Yet again I feel my blood boil like Norwegian politics never mange to do. Even the dumbest Norwegian political agreements makes me so annoyed as some good old American arrogance, self-centeredism, ignorance and hyperbole. The irony of what Friedman writes is that it is exactly because of the American attitudes displayed by Friedman in his article that countries like China and Russia are not in the American fold. In his american self-centeredism he is so blind to the world, that he doesn't see that America is the country that needs to change and adapt to the rest of the world. It is not the rest of the world that needs a lecture in how to behave. America needs to play on team with the rest of the world not just bully everybody else into submission. Unlike a lot of others, China and Russia are not in the American fold because they are strong enough to not be bullied into it.

Friedman seem to think the whole world is centered around America. The general trends for the world as a whole has all been orchestrated by America, and thus all the general good trends (as well as the bad). Between the lines he is saying America single handedly brought communism to its knees and brought democracy to eastern Europe. What about Gorbatchev, Perestrojka, Glasnost and Jeltsin's standing up on the tank for democracy? What about Polen's solidarity? Didn't they do anything. Were they just mere puppets for the US?

Where is this supposed stability created by the US? I only see invasions, regime overthrows and wars created by America's drive to satisfy its own self interests. Of course I recognize a number of good deeds, like help bringing peace to Yugoslavia, overthrowing Taliban etc. But there are so many other destabilizing policies that one would be hard pressed to argue like Friedman that America has create more stability in the world on sum.

What about the communist regime in Afganistan helped set up by the Soviet Union? It made real progress in a extremely traditional and conservative society. Women were allowed to work and get education. The state was modernized etc. But in its eagerness to destroy any success for the Soviet Union the US helped made Afghanistan one of the world most failed states.

In Vietnam they wasted enormous resources on propping up corrupt regime that the majority hated. They could have just let the Communists win right away. In time they would have become capitalist on their own will. Vietnam followed China's free market reforms many years ago. Perhaps they would have much earlier if they did have to spend decades fighting the french and then the Americans.

What annoys me perhaps most, is America distrust in others. They think only America is capable of doing the right thing and countries can not become free and democratic unless America shows the way. They don't think a country can become democratic unless the US sanctions, threatens or invades the country. When in reality this just slows the democratization process because it rallies the people behind their leaders. And in the process it destabilizes the world.

Make no mistake though I am no big fan of Russia and China. Russia is quasi democracy with mild dictatorship tendencies and China is a dictatorship. None of the really think much about the good of the rest of the world. They primarily care about their own interests. In this respect the US is better. It is still a democracy although it is popular to question that now. It also does things abroad that are not purely out of self interest. However most of the things the US does is out of self interest and yet they frame themselves as the knight in shining armor ready to save the world from tyranny and oppression. China and Russia do not do this. And in this way they are more honest than the US is.

We don't need China and Russia to teach us about freedom and democracy, they don't try to do that either. But we need them to balance the power of the US so they US does not become a bigger inflated ego that thinks it can do anything it wants to. As long as China and Russia are blocking American path to world dominance America will be forced to learn to play on team with the rest of the world.

Some stressful days

2006-09-26T16:54:00.000+02:00

The last days I have been getting ready to go home to Norway. I had a lot of stuff to go through because my girlfriend left a lot of things. And of course I have pilled up a lot of books and papers the two years I have been in Holland.

But apparently that was not enough. On sunday evening I went out to take a break from project and packing. I took my camera to take some pictures of the neighborhood I live in to show family and friend. It is close to the old city wall of Utrecht so it is a nice area. Old Utrecht used to be surrounded by a thick canal that acted as a defensive measure. In dutch there are many different words for canals depending on the type of canal it it is. Canals going through the city are referred to as gracht. They were traditionally used to transport goods into the city. A canal at the edge of the city or surrounding it is called a single.

So I lived close to a single were the city wall once were. Now it have been converted to a beautiful park area. There are also many old houses and some big old mansions. Perhaps the rich built big mansions outside the city wall in the old times.

Stopped by the police
Anyway I went around with my camera. This time I wanted to document more how a typical dutch neighborhood looks, as I have many pictures from the downtown. A lot of dutch houses in traditional neighborhoods are not that exiting looking. They are all made of red bricks and quite squarish. In this respect I think North American or Norwegian houses are a lot nicer. However what makes dutch houses stand out are the doors and the windows.

Often this is the only way you can tell whether there is a well off family living inside or not. The facade will often be the same boring red bricks. But well off people often have much more elaborate doors and windows. So I went around taking pictures of doors and windows in my neighborhood. Some of the windows are quite beautiful with small colored glasses surrounding them.

I crossed over a bridge to the single, into the old town. While aiming my camera at one of the old houses a police car suddenly pulled up next to me and two policemen jumped out. They wanted to see my ID right away. I got nervous right away because as far as I know I am supposed to carry my passport at all times or a residence permit. Neither of which I did. I ignored that thinking that the law was merely to get illegal immigrants from Morocco or something. I felt stupid for thinking that now.

I pulled out my American drivers license, hoping they would accept that. They seemed to accept that and I was a slightly at more ease. Then they started asking what I was doing. I said I was taking pictures. They asked why I was taking pictures or of what. I got nervous again, wondering why they were querying me about this. Perhaps I had photographed some top secret military installation in the city or something I thought.

They demanded to see my pictures. I showed them and asked if they were looking for someone. Actually I can't remember when I asked it except I didn't get a reply right away. But as I showed them the pictures they told me that someone had called the police because they thought I appeared suspicious. They thought I was burglar or something taking pictures of their house because I planned to break into it.

When the police realized that this was not the case, they instantly turned very friendly. I said "I guess I have to be careful about what I take pictures of". But they just replied "No, no, just take as many pictures as you like. It is legal". Then they wished me a good day and left.

Efficient dutch police
In retrospect I realized who had called. In one short street I went up, I took picture of a window I though looked very nice. Shortly after as I walked on I noticed a women running out the door, looking at me. Almost giving me the evil eye. For a moment I thought she was going to complain because she probably thought I had taken a picture of the inside of her house. But nothing happened and I carried on. What is strange is that from then on, it took perhaps no more than 3 minutes before the police car pulled up next to me. In 3 minutes the women had managed to call and the police had managed to get to the spot and then drive around and locate me. There were a lot of other people around and they couldn't possibly have known exactly were I went. In short I am extremely impressed by the efficiency of the dutch police.

I can almost say for sure that this would never have happened in Norway. From my own experience of other people calling the police, the seldom have time for anything. Especially not something as minor as someone taking pictures. The answer would most likely have been: "We are sorry, our resources are stretched. So we can't come."

Lost wallet
And today when I finally flew home I managed to get stressed out again. Thinking I would take the bus in the morning I hadn't taken out much money from the ATM. But learning how far the bus stop was away and how heavy my suitcase was I decided to get a cab. By then I had forgotten about my lack of money only to remember early in the morning right before the cab arrived I search through my drawers for coins. I got 5 euros and 95 cent. I told the cab driver and asked if we could stop at an ATM. It was okay. Before I went out of the cab to get money I had looked through my wallet one more time for cash. When I rushed out to get money from the ATM I must have forgotten to put it back in my pocket and it probably fell down on the ground right outside the cab. But by the time I realized I didn't have my wallet, I got too stressed out to have any idea where I might have lost it. There were few minutes before the train left and I didn't have a ticket and neither had I payed the cab driver the full amount. I search around the cab like crazy forgetting the ground. I spilled some of the cab drivers documents on the ground. He was probably not very happy. I left without paying and with no wallet.

I thought about what to do about my missing ticket, but there was no time to think about it so I just got on the train. On the train I made some phone calls to block my bank cards. But I didn't have the banks number on my phone and neither did I have the dutch number information, so it turned into a mess. Meanwhile I worried about what to tell the conductor when he came to look at my ticket since I had neither ticket nor money.

Fortunately that sorted itself out because he/she never came. The second problem was that I was taking a lot of stuff home so I had purposefully filled up my suitcase as much as I could. I assumed I had to pay some money for the extra weight. Of course now I had no card to pay with. Fortunately I had chosen to leave my girlfriends suitcase in Netherlands. That would have brought me way above the weight limit for sure.

The suitcase was 7 kilos above the limit. That is almost 50 euros. But I was lucky. They guy behind the counter said the plane didn't have that many passengers or luggage this time so he would let it pass.

Next problem was how to get home to Moss after I arrived in Norway. Fortunately my dad solved this by calling his bank and authorizing me to take out money from his account.

Of course there was a minor screw up again. The bank misunderstood and only gave me 200 Kr instead of the 400 kr my dad had asked for. But that seemed okay because the information desk said that the bus ticket home cost exactly 200 kr. Except they were wrong. Which I found out when I entered the bus. The price was 205 kr. As I argued with the bus driver I wondered whether he would be an asshole and tell me to leave the bus. I could have gotten home eventually even then. But it would take time and I was getting really hungry. Because of lack of money I hadn't eaten anything that day, and it was 13:10.

But he accepted, slightly grumpy and said the 5 Kr would have to go out of his pocket. But just then a nice lady in one of the front seats stretched out a 5 kr coin to me and the day was saved.

An Interview With A Cheater

2006-09-19T10:35:00.000+02:00

I just came across this interview of person that cheats on computer games. It was actually quite interesting. I never thought much about the physiology behind a cheater, but this was an interesting read.

Basically they are big losers that somehow think they are the skilled ones because they know how to cheat. The others are simply whiners that are too stupid to figure out how to cheat themselves in their view:

Schmuck5000: I play BF2 and some Counter Strike. I cheat at both but it’s hard to get away with in Counter Strike. People who play CS are such babies about that stuff. The other players are just jealous p***ys who wish they had the ability to cheat.

They also defend and rationalize their cheating by the fact that a lot of others do it too:

Schmuck5000: Like I give a flying F**k what other gamers think about me. As long as there are games there will be cheaters, why should I stop if no one else does, as far as I see it I am evening out the playing field!

This post got me thinking from comments I read that this is probably exactly how corrupt politicians, thief's etc rationalize their actions. "I am corrupt, but that is okay, because so is almost everybody else. I even the playing field. The ones who complain are losers that are too stupid to figure out how they can make money on corruption too." Or it is okay to steal because everybody else does it.

These people conveniently ignore the existence of people who knows how to cheat or have the option to be corrupt but still chose not to because they think it is wrong.

Actually this makes me think of a program I watched with my girlfriend called "my sweet 16" or something. It was about all these rich and completely spoiled 16 year old that were going to celebrate their 16th birthday. All they seemed to care about in the preparations was on how to make the others feel jealous of how great their party was going to be and all the things they were getting. This seemed to be their prime drive.

Like the cheaters their motivation is external and negatively charged. They don't want to win to know they did well themselves (an internal drive) but because of the reactions of the other players. They want the other players to feel envy over their supposed great skill. It is all a big ego trip. Likewise the "sweet 16" isn't motivated by making sure the others have a good time. This would be an internal drive because what motivates you does not reflect back on you from the outside. For these spoiled kids making sure that others have a good time is just a means to an end and not the goal itself. If this feeling good does not produce any envy they can feed on, it is wasted effort.

Norway, worst food selection among the Nordics

2006-09-18T11:47:00.000+02:00

Today in Aftenposten I could read that Norway has the worst selection in food. While this is something that has been complained about for years in Norway I find it quite puzzling at the moment. Since I have been away from Norway for three years I can notice quite well what dramatic increase there has been in food selection while I have been gone. All this despite an agricultural policy that effectively shuts out all foreign competition with 300%-400% taxes on import.

They claim that the pressure from the low cost chain is driving down selection. Because they aim to have few products to be able to buy larger volume and thus press down prices. However ever since the chains arrived we have been getting more selection not less. I still remember that through my whole childhood there was just three flavors of potato chips. Now there is more like a whole aisle.

When I come home to Norway on visit from the Netherlands I am often surprise at how much bigger the selection is. Despite Netherlands being a major food producer, located within EU and having a much higher population than Norway, food stores here are generally quite small and the selection not that impressive. Stores in Norway are much larger and thus have much larger selection. And this is not just my own bias because my girlfriend thought the same thing when she visited Norway this year.

Even my brother who now lives in Ireland don't think selection is any better in Ireland which is also a big agricultural producer and within EU. Of course food selection in countries like Britain and France is much larger but can we really compare ourselves to countries of that size?

Selection and real choice
Then of course there is the problem of what selection actually means. I remember when living in the US there was huge selection in everything. In fact it was a little bit overwhelming at times. However I frequently found that despite a large selection in brands and flavors the actual or real selection was not nearly as large.

For instance I wanted to buy a cereal similar to the one I used to eat in Norway. That cereal was a sort of natural one with a mix of grains, fruit, nuts and raisins. It didn't have any added sugar. This cereal you can get in any store in Norway. However on the enormous aisle at Super Target I couldn't find any cereal that wasn't much but a variation of the concept: Unnatural cereal with loads of added color and sugar. There was like a 100 brands but they were essentially all the same. In Norway perhaps we have 10 (I have made no attempt at counting) but at least they are quite different.

When getting dental floss I could hardly make a choice, because there was so much to chose from. Did I want thick or thin? Flat or rounded? I didn't know and I didn't care. I ended up picking something totally at random.

Too much choice can be a problem. When deciding to buy an MP3 player it took me perhaps 2 years before I bought one. There were so many to chose from that it was impossible to decide which one was best. Each one had benefits I liked but none seemed to have exactly the combination I wanted. It doesn't help either that in general you get very little information about each player and if you ask one of the underpaid clueless teenagers employed in the big electronics chains you don't get much of an answer.

Eventually I bought an iPod shuffle when Apple released that. Not because it was perfect, but because I had been happy with Apple products before and I knew that they knew how to make things simple and work flawless. Something I craved after owning a Sony Mini-disc player for a few years. The sound was good, and it didn't take much space and all that, but it was a pain to use. Every time I needed to transfer music to it I felt I had to relearn the program because if was so counter intuitive. And I used to make software for a living.

Conclusion
I don't know exactly how they measure selection. But from how it is commented on it seems to be based on counting number different products offered. However selection is not the same as choice. I don't think assessing selection is possible simply by counting number of products. One has to look at what kind of products are actually offered. Because if the products are essentially the same there is no choice. Unfortunately this is probably impossible to do in any objective way.

Conservatives win in Sweden

2006-09-18T11:11:00.000+02:00

In politics there are few places in the world, I care about keeping an eye on. For instance, despite living in the Netherlands for two years now I don't care much about what is happening here politically. For instance who wins elections. Although I am interested in the Dutch political model in general. It is interesting to observe what the effect of such a socially liberal policy as the dutch have has on normal life.

My perhaps main interest in politics is American politics. The reason being that American policy affects everybody in the rest of the world very strongly and because it is simply a lot more at stake and a lot more action in American politics. There are bigger words and more black and white. My other interest is China, because they will perhaps be the worlds second superpower in a few decades. Then there is of course Norwegian politics for the simple reason that I come from there and will probably spend the rest of my life there so politics there matter for my future.

And lastly I care about Swedish politics. No other country is so close to Norway. We shop in Sweden and they work in Norway. Every other waitress in Oslo restaurants is Swedish. Swedes are frequent guests on Norwegian talks shows and radio. The Swedish prim minister is almost as obvious guest on Norwegian talks show as our own prime minister would be. And since childhood I, like every other kid, watched a lot of swedish children's movies and programs like "Albert Åberg", "Tjorven på Saltkråkan", "Pippi Langstømpe", "Ronja Røverdatter" and "Brødrene Løvehjerte". In fact I did this so much that I started using a lot of swedish vocabulary in my daily speech ;-)

Swedish politics often influence Norwegian. When they implement a new reform it does not take long time before we do the same. Swedish social studies are frequently quoted in Norwegian media. So what happens in Sweden matter perhaps more to Norwegians than what happens anywhere else.

Today the conservatives won the election in Sweden. What is interesting about this is what an anomaly Scandinavia often is compared to the Anglo-Saxon world which political developments I often follow. Bill Clinton and Tony Blair basically created the new Democratic and the new Labour Party by going right. Long term conservative rule had changed the political mainstream or center in those countries. Clinton won on "It is the economy stupid". Because the economy was not doing well the opponent lost. In Sweden things are up side down. Long social-democrat rule has entrenched the mainstream in the Swedish model of welfare state. The conservatives have failed to lure people over to a more anglo-saxon model, they simply don't want it. Thus they have now created the "New Conservatives". A conservative party has has one by going sharp left. They changed their dark blue color the light blue and even proclaim themselves as the "New Labour Party". Of further interest is that the Conservatives didn't win because of the economy. Quite the contrary. With 5.6% annual growth this quarter they are far above the rest of Europe.

Instead they have won by promising more jobs, something that usually social-democrats win on. Our own labour party in Norway had as slogan for many years "Work for everybody!".

But the party is still conservative so we can expect lower taxes, more labour flexibility and less regulations. How much remains to be seen.

Perhaps the new rules for sick leave are good

2006-09-16T10:21:00.000+02:00

I came out initially as strongly opposed to the new sick leave rules. However I now see that they might not be as bad as I first anticipated. Of all odd persons it was Kristin Halvorsen, our finance minister that convinced me, after I read an article in Dagsavisen about it. I am surprise because she is not person I usually agree with, since she comes from our far left party, and I consider myself more liberal. I might have agreed with her on certain social issues before but never on economic issues.

However she is the first one that I have read that have given any real explanation to the logic of the new deal. She explains how there is no incentive for employers to make working life accommodating because they don't pay anything after people are away passed 16 days.

She also explains how local government has exploited this by reducing their expenses by putting people on long term sick leave.

What I worried about was that this new deal would cause employers to pester employees to go to work even when they are sick and cause no real improvement. However as far as I can see this is only a problem for short term sick leave. And the new package reduce the number of days that employers have to pay fully from 16 to 14 days. So they might actually be less pushy on employees. Chronically ill and pregnant will be excepted from this deal so, there should be no problems of employees choosing not to hire people that are easily sick. At least not any bigger problem than it already is.

All in all I don't think the deal is that bad, but it was badly executed and the logic and motivation was not very well communicated from the start. Companies should have received some more compensation from the rule. It should not have been made in such a way as to make it a net saving for the government. Business should get other cost reductions to compensate. That way the new deal would be an opportunity to save more money rather than higher expenses as the current package is.

5 years after

2006-09-16T10:02:00.000+02:00

When I wrote this post on 9th of september I had so many thoughts that I couldn't finish, but I decided I should just post my original thoughts that day because otherwise I might not finish writing in a week ;-)

Today is the 5 year anniversary of the largest geopolitical event of my life time. Okay, I lived when the Berlin wall came down but I was not old enough to truly grasp its significance. And despite its lasting impact and legacy I think few moments in our time can measure up to the dramatic moments when the twin towers of the world trade center in New York came crashing down.

Everybody of know where they were that day. I remember vividly sitting on the tram in down town Oslo, when I realized something important was being said over the radio. I don't know why I realized this because I usually don't pay much attention to what the radio is saying in a tram. Perhaps it was something about the voice of the speaker that caught my attention. I just heard something about Bush and thought he might have been shot.

Later I walked into a games store at Oslo central station called Outland. They sell board games, science fiction books and magazines. They had a little television on, and several people had gathered around it. I knew something important was happening. People were very caught up in what was happening. I saw a plane crash into the WTC. We all thought it was a small plane navigated by a retard who didn't know how to fly. We were just shaking our heads.

Then the second plane hit and we knew that this was no accident anymore. I can't remember that much more of what I did that day anymore. But I remember that it was something everybody was talking about and everybody was sending email to each other or calling each other about it.

I remember having a doomsday feeling in those following days, as if the world we knew was coming to an end. There had been so many planes that had been hijacked and now we could see on the front page of news papers that there would be many more to come. At least that was what the extremists were saying, and I didn't know what to think. I feared that America would totally lose it. Bush was not exactly known as a diplomatic man, and wondered if he could get so crazy as to start nuking places. Perhaps Afghanistan and then perhaps Russia would get involved and we would have mayhem.

It seems silly that I thought those things back then. But it was such a surreal and emotional time and so much we didn't know that it seemed like anything could happen. I had hardly heard about Osama bin Laden before and I don't think I had ever heard of Al-Quaida.

I would stay glued to the television for weeks to come and read everything I could come across online and in news magazines and newspapers. Even at work we frequently watched the news at the breaks.

I thought you hated us
There are two memories that touched me the most from that time and that was seeing the people jump from the WTC to their death and message on web page set up for the world to show their solidarity with the US. The page had hundreds of images and post from people all over the world that said they stood united with the America. Pictures of people in the street displaying posters in support of America. It was great to see the moral support everybody was showing. But in the midst of this there was a message from an American overwhelmed by the support: "But I thought you all hated us?" I remember thinking that that was extremely sad. How can could anybody really hate the US. All of us living in the west had relatives there, we watched movies from there, we traveled there, they helped us in two world wars etc.

It is then sad to see the state of the world after 5 years. Unfortunately the post by the surprised American isn't that far from the truth anymore. In 5 years President Bush has managed to squander unprecedented support and solidarity with America, and made America more unpopular than almost any time in history. They are put back to the Vietnam area.

Large scale social experiments on economic behavior

2006-09-08T18:54:00.000+02:00

Would communism, anarchism or capitalism without any rules and regulations ever work (sort of like the libertarian dream)? Until recently most economist had assumed that they would never know. Because none of these systems could ever be tested in practice on a large scale. The problem with economic research is that controlled experiments are very hard to do because they involve humans on a large scale.

One could do test by playing little social games in a controlled way. This is frequently done but it often involves made up money so the results from the study are not that valid. It is like playing poker without real money. If real money is involved or real stakes then people play different.

Fortunately today there is a source of controlled social experiments with real stakes or real money. The source comes from the most unlikely place: computer games. Massive multiplayer games allow people to own virtual items and property, trade and engage in economic activity. It turns out that these worlds follow all the requirements of real economies, and so they their economic development and condition can be studied.

These worlds give starting conditions which are required by anarchist capitalists and communists alike. All users start with the same conditions. Nobody enter the game world with more than anybody else. Whatever they gain is because of their own talent and effort put into the game.

Communism
It can be said that these games offer the ultimate starting point for a communist society. There is no bourgeoisie to monopolize the capital, since nobody start off better than the other. Further every-bodies needs are fulfilled. Players don't need to work to get food or shelter. Whatever the work to get is essentially luxury items because they are just for increased enjoyment of the game. Neither is there a government to protect the property of the rich.

Anarcho-capitalism
For the anarchist capitalist these worlds are also ideal. There is no government to control people and make them pay taxes. People can create their own social contracts and the private deal with disputes.

Reality
As would be expected, in reality the societies in these online worlds never reach utopian ideals like communism or anarcho-capitalism despite having all the prerequisites. Instead they degenerate to quite lawless societies with some sort of capitalism. However they do not result into total chaos, it is not a war against all as Hobbes suggested.
Theft and murder is quite rampant but players quickly start to form so called guilds in these games. A guild is basically a sort of communal unit. The guild has rules and they often share profits and refrain from attacking each other. However not following the guilds rules can get you expelled from the guild.

Wealth distribution in these games are quite terrible. A few own very large percentage of all the wealth. This is not really strange but to be expected. However it goes to show that even when people can have almost all they want they still don't share very much with others but prefer to accumulate even more stuff. Despite the fact the rich don't really need the items they hoard.

I think this shows that inequality will always exist. When all our material needs become satisfied the inequality will increasingly take the shape of inequality of virtual objects, if which there is no limit to peoples desires. The funny thing about this is that in a virtual world were any virtual object could be created with no effort nobody would value those objects or care much to have them. The object only get desirable because they are scarce and not everybody can have them.

Conclusion
The studies of games show that a society without government, even if it started out with everybody being equal will quickly degenerate to a lawless society with great inequality. The only way to secure the happiness of all in real life is thus to have a government that keeps law and order and protects the poor from exploitation.

The links below give more details of the findings from studying virtual worlds:

Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier
Political Economy in Diablo II
Fantasy Economics

New rules for sick leave in Norway

2006-09-07T14:26:00.000+02:00

They new topic that is getting everybody angry in Norway at the moment is that our red-green government has chosen to break previous agreements with the employer and employee unions about the laws for sick leave. With out consulting them first as promised they are just forcing through a reform.

Now I can understand that this approach might some times be needed. After all some reforms are highly necessary but very unpopular. However in this case they are being flat out dishonest.

The reform calls for a larger chunk of the sick leave to be payed by the employer instead of government. In response to criticism for this the government says that it is needed to reduce the current worrisome trend that every year there is a great increase in people on sick leave in Norway.

However I fail to see how moving the cost over to the employer would make it people less sick or go to work more often. What does it matter who pays it? The only thing that can make people go more to work is if they have to pay more themselves for being away or that work is less hazardous the their health or that more proper medical checks are required before you can be away.

That the employer pays more of the cost, gives no incentive to the employees to go to work more often, nor does it improve their health in any way.

Personally I think to reduce increase in sick leave two causes have to be dealt with: Increase in the people who are health but out of laziness or other factors chose to stay at home and those that are genuinely sick and need to be away. The first case I think can be dealt with be making it cost the employee something to be away. Now it costs nothing so little is lost by being away.

The other more serious problem is that more people seem to actually be sick. This seems to be because of more stressful work conditions, overtime and that people look after their health properly. This is hard to deal with because of the nature of modern jobs. They are often about projects with deadlines etc. The 8-4 jobs don't really exist in that large scale anymore. Then people could put the job behind them when they went home. Today you can't because you always know even when you are home that the project has deadline next week and you are severely behind schedule. With regards to health I think that can be improved my companies offering more health food and giving their employees training facilities. So they can take breaks in the work day and do some exercise to stay more fit.

Another question often overlooked is whether the cost of people being sick is properly calculated. Today we just calculate the money lost because government has to pay sick leave when people are away. So if a person is away form work one day because he is sick and the comes back health the next day that counts as one days income lost. However if the person goes to work and only manages to work half the rate because he is sick and perhaps he even stays sick longer because he gets no rest, then this does not show up on statistics as lost income although just as much work was lost.

24'' iMac

2006-09-07T14:04:00.000+02:00

Yes, finally Apple release an iMac with a larger screen. In the past I have looked at the iMacs thinking they might be the perfect digital hub. I could have it in my living room use Front Row and the remote control to select and play music, I can play DVD and show pictures taken by my digital camera to friends and family in living room with a remote control. With Eye TV I could even watch television. The rest of the day I could move it to my bedroom to work on it. That is easy since everything is in one unit and a minimum of cables connect to it. In short it would fit all my digital needs.

However one thing kept me from thinking it was perfect: the size of the screen. At 20 inch the largest model seemed to be a little too small to double as a television. But now with the 24 inch model I think it would work just fine. If only it was 500 euros cheaper...

The future of work

2006-08-22T13:19:00.000+02:00

The workplace is changing. Fewer and fewer people work in factories, one of the main employers a few decades ago. What are we going to do when all the simple jobs are gone? Everybody can't be rocket scientists, now can they?

Parallel to this development is the globalization of trade and production. Everybody is increasingly competing with the rest of the world for their job. IT was supposed to be our new job market. While manufacturing was going overseas to China we were supposed to do the IT part in the west. But now IT jobs are being outsourced to India. So what is left for us to do in the west?

What can we do when our standard of education is falling behind the rest of the world and the others are working harder and faster? We are producing less and less engineers and scientists, critical to development. Meanwhile China and India are having a massive increase in output of scientists and engineers. Are we doomed to fail?

What we keep hearing from business magazines, and latest from the World is Flat is that we need to work harder and be smarter today than we did before. Because before we lived in a sheltered world without world competition. An engineer in Norway wouldn't have to be better than an engineer in China to get a job, because they were in no direct competition. Today they increasingly are. We are being told we have to work harder because the rest of the world is taking no breaks in their relentless drive towards more prosperity. This is especially the repeated mantra from all american business magazines: Western Europe with all our welfare benefits, short working days and long holidays will not be able to make it. Our laziness in the new highly competitive world will spell our doom.

Good thing then, that they are all wrong. Not only that, but so called new trends that are changing the whole game is nothing new. It is trends that have been going on for ages. Only difference is the scale.

We can't all be rocket scientists?
The short answer to this is yes we can. I know many will object and say that only a few people will have the skill or interest for that. Some people will still have to do simple jobs.

But the fact is that what is simple and complicated jobs are continuously changing. Sure back in the 50s only a few would have the brain power to be an engineer, most would have to be content with a factory job instead. However the difficulty of doing an advance job is continuously declining.

I can only talk specifically about my own field but I know the trends are true for other fields as well. In the 60s only very skilled and smart people could be programmers. It required a lot of technical knowledge. One would have to create programs using assembly language. This requires intimate knowledge of how computers worked as well as good understanding of math. Programmers had to deal a lot with different number systems like the binary, hexadecimal and decimal system. Creating programs was a slow an laborious process. Programs had to be input on hole cards and then feed into a computer by a special technician. Today on the other hand teenagers with minimum of training can be able to produce programs with more features, better user interfaces and less bugs in a fraction of the time as of those old school computer programmers. What happened? Do today teenager work much harder and are they much smarter? No they are not. Their tools simply got much better. A lot of the complexity of the work got taken out by tools.

The same trend is happening everywhere. Engineers don't have to know that much math or be able to solve complicated equations in their daily work anymore. They just input data into computer and the software programs do most of the tedious and complicated calculations.

The same goes for almost any kind of white collar work. The tools are much better so our jobs have become much easier. What this means is that as development of tool evolve, a larger and larger part of our population will have the mental capacity to do "rocket science".

Of course the same divide between simple and complicated jobs still exist. Except what is a complicated and what is a simple job has changed. Before any kind of programming job was complicated. Today it has become more stratified. There is a large chunk of programming jobs that almost anybody can do, e.g. creating database applications (applications that grab and insert data into a database). While systems programming like programming operating systems or device drivers remains something complicated that only the best programmers do. A similar stratifying probably also exists in all other fields as well, like engineering.

So the truth is we don't have to be smarter and work harder than our parents. Our tools take care of so much of the work that we can still spend less time at work, and stain our brains less and still produce more in shorter time.

From production of physical goods to information
In fact this is no different than what happened during the industrial revolution. Workers could produce more goods in shorter time and of higher quality than their predecessor craftsman. They did this without being any smarter than the craftsmen, without worker harder than them and without being stronger than them.

The industrial revolution saw a massive automation of physical production. Today we are seeing a massive automation of information production. Information production in the form of production of computer programs and production of blueprints for cars, houses, bridges etc.

What about China and India?
Okay, so there are obviously jobs for people in the future as well without the need to be smarter, but what about India and China. Aren't all jobs going to end up there?

Because of the principle of comparative advantage they can never increase comparative advantage in one area without losing in in another. In short comparative advantage is what one is best at doing relative to the other tasks one is able to do.

Thus there will always be something we can do better than other things. Thus we don't have to work harder or be smarter to compete with them. As long as we in the west employ our people in the area where our comparative advantage exists we can always compete with India and China. We can even become worse at what we do and still stay competitive in the long run.

The problem for many however is that it is not clear what out comparative advantage will be in the long run. But this is not something one needs to worry about. It is enough to know that one will always have one comparative advantage. What we do have to make sure however is that we always educate people within the area of our advantage. If not then we educate people for an advantage that China and India has and we will lose the competition and get massive unemployment. As mentioned areas like computer science and engineering is highly stratified. What this means is that we are going to lose our comparative advantage in the lower strata first which will shift the comparative advantage upwards and to other areas. This is what we are seeing today too. The indians and chinese started by taking over lower level programming and engineering jobs, but they are now moving upwards in the value chain.

How can we keep moving up the chain? It just becomes more and more complicated? We can because the tools get better and better. The fact is that it is also impossible to outsource everything. Products are mostly developed to meet needs in the west. In the product development cycle it thus has to be people with intimate understanding of local conditions like the tastes and needs of consumers etc.

Examples of Western comparative advantages
Let me take an example from my own country on why not all software development can be outsourced. In Norway we are good at oil technology. E.g. making software and equipment related to oil exploration and production. This requires knowledge in many different areas: engineering, geology and computer science. Together they form a knowledge community. This community can develop software for modeling the subsurface. To do this computer scientists have to have some knowledge of geology and close contact and communication with geologists and oil engineers. This environment can not be reproduced in India because they have no expertise in this area and it takes long time to develop. And why should they waste time developing this expertise when it is easier to develop better expertise on generic software development? E.g. development of word processors, databases etc which require no special knowledge community is bound to end up in India.

Similar examples can be made about any other western countries. E.g. in the US which has a big airplane business, I am sure making software to operate the planes requires thigh coupling between software developers and airplane engineers.

For this reason what one often sees is that software is developed in the west first and then sent to India for maintenance. They do bug fixing, update user interface, port to new platforms etc as needed.

Conclusion
We don't need to work harder, longer or be smarter to survive in the new economy. Of course the smarter and more hard working we become the better we will be off. But we will be better of regardless because of better tools that allows us to be more productive without any extra effort on our part.

Neither will be ever run out of jobs. Even when all industry dies there will be jobs for everybody as more service workers will be needed in every sector. We eat out more and we travel more so more people will be need in restaurants as cooks, waiters etc. More people in travel agencies as guides etc. More products are made so more people will be need to make ads: filming, drawing, directing, marketing and market research. We live longer so more people will be needed in hospitals as doctors, nurses and cleaners. We spend more time on entertainment like listening to music, watching television or playing computer games. So more people will be needed for film and music making, which requires directors, actors, camera technicians, sound technicians, costume makers etc. More people needs to make games which will include more programmers, more graphics artists, more music composers, more story teller and script writers.

Since more products are made we need more engineers to make them, more industrial designer to design their looks etc. The economy and society becomes more and more complex so we need more people government to regulate and make laws for trade and products. E.g. internet brought with it the need for a whole new set of laws to regulate personal information, anonymity etc. Government will have to hire more people to deal with these things.

In short we need more people in every conceivable area. There is never going to be a shortage of jobs. The only problem is that people might have the wrong skills, so reeducation programs is what will be more important than ever.

Why I dislike Microsoft

2006-08-19T14:04:00.000+02:00

It should be clear that I am no big fan of Microsoft. But I would like to explain why. It is not based on irrational hatred of anybody successful.

To make a few things clear: I do think Microsoft makes good software, I think they make great user interfaces, and I think Bill Gates is a great strategist and business man and a good person. We should not forget his commitment to the Melinda and Gates fund to help poor people around the world. It is also admirable that Gates does not indulge in luxury and works hard everyday to continue his success. Of course he has a bigger house than most people but one shouldn't expect less from the worlds richest.

That being said, I find Gates a boring person without much vision with regards to technology. Steven Jobs might not be such a great business man but he is definitely more fun and visionary.

Okay, this all sounds good, so what is the problem? The problem is that although Microsoft makes good products their position is more dominating than the quality of their products should indicate. There are many products that are better but remain minority players. A lot of this is not entirely Microsoft's problem but also partly people stupidity.

Microsoft Office
MS Office is no bad product. However it is very expensive and for specific tasks other programs are better. And all too frequently MS Office is totally overkill for the task. Too often it happens that Joe user needs software to write some email or articles. Unfortunately Joe user is stupid and thinks there is only one program one can use to write with and that is MS Word. He is oblivious to the fact that most Operating Systems come with a simple word processor installed. So Joe user blows off 400 euro for software he doesn't need. Then he starts sending Word document to other people. If they don't have Word they can't read the document. This again forces more people to buy software they don't really need.

When you send a document to a person either in education, private enterprise or the public. You frequently get in reply, could you please send it in Word format. This they say even if you send the document as a PDF or RTF format. Both formats which are standards and open to the public unlike DOC format which is only a de-facto standard. No only that, but unlike MS Word, programs to view those files are free and easily accessible. Not only that but PDF guarantees that the document looks exactly what it looked like on your computer on the receivers computer. Something MS Word does not guarantee. And still people ask you to send them a DOC formatted file although that requires the sender to shell out 400 euros while the receiver could just have downloaded and installed a PDF viewer for free in 5 minutes.

The idiocy doesn't stop there. When I worked for a big consulting company (I wont name names here) I would frequently receive emails from coworkers with image attachments. Except the images were image files, the sender had pasted all the images inside an Excel spread sheet. Instead of sending me standard JPG, PNG or GIF files that anybody can open and view the person had hidden them inside a proprietary file format that requires you to spend 400 euros to view. Not only that but the images might take more space and get distorted by being sent this way.

So the person might have wanted to avoid sending several attachments. Well why not use a zip archive? Which is standard and available for free.

Internet Explorer
As is often the case, Microsoft has completely ignored web standards and made sure that if web site creators have to choose between making pages that look good in the standard or in Internet Explorer. The choice is easy because IE has the largest market share. Which of course screws all other competing browsers.

DirectX
When Microsoft wanted to provide high performance graphics they choose to create their own standard instead of using highly successful, widely used and liked OpenGL. And they continued to do so although most developers hated DirectX and preferred OpenGL. Except they didn't have a choice. To be compatible with Windows graphics cards manufacturers had make their cards DirectX compatible often at the expense of OpenGL compatibility.

Again like with Office and action that caused a limiting of choices for consumers. People using other platforms than Windows could suddenly not use a lot of graphics cards, because they require DirectX to be fully utilized. Had MS used OpenGL, which is available on practically any platform, nobody would have been locked out.

Using market share to squeeze competitiors
These are examples of how Microsoft use their dominating position to create their own standards, destroy existing standards and limits choices for consumers. You are not free to use any web browser or any word processor. Because if you don't use Microsoft's solutions you will not be able to view a lot of web pages (some internet banking sites e.g. required IE) and if you don't use Word you can't send or receive documents from anybody. Had Windows not been so dominating, consumers could have more real choices. That is my issue with MS, I don't mind people using Windows or MS products I just wish the situation was such MS was not so dominating so consumers had a real choice. Mac and Linux is simple not a viable choice in a lot of environments at the moment.

I don't know if Microsoft has done anything illegal to exploit their monopoly situation. But even if they broke no law, they have intentionally tried to lock in users into their solutions. Nothing wrong with that and a lot of companies do it. But few have done it so aggressively as Microsoft.

My hope for the future
I hope that in the future governments and public institutions will all ditch MS Word as the document standard and use an open standard like Open Document format or PDF. This does not exclude MS Word. I just means that Word users will have to export their documents as PDF (something a lot of people already do) before they send them to other people.

I also hope Windows market-share is reduced to something like 65% and let Linux and Mac have the rest. Then alternative operating systems would be large enough for business to take them into consideration. So more software and hardware would be more compatible with those systems.

Then consumers could have a real choice for chance.

How Apple won the war

2006-08-19T12:43:00.000+02:00

Watching the last keynote from Steven Jobs were he presents Leopard and the Mac Pro I can't help thinking how good it is going for Apple these days and how they are increasingly leaving Microsoft in the dust.

You don't need to be an Apple fan-boy anymore to see what is becoming very obvious. Mac OS X is getting farther and farther ahead of Microsoft Windows. Every time I sit down and use windows these days it is a minor shock every time how old fashion Windows XP seems these days. I use widgets almost every day to check todays temperature, to look up words and to simple calculations. I use spotlight all the time to look up my files, I almost stop using the file manager. And I use exposé to juggle around my windows, when moving files around, e.g. making an email attachment. And yet all these features that I use everyday and have become so dependent on are totally nonexistent in the Windows world.

But how did all this happen? How could Apple, which is a tiny company compared to Microsoft and with a lot less cash and programmers manage to beat the giant?

Outsourcing
The key is outsourcing. Many other field have done this before. Car companies used to make every single part themselves before, now mostly buy the parts from other companies and put them together. Likewise with PC manufacturers. The largely buy parts from other companies and put together the parts to make a PC.

Apple used to make almost everything themselves. They made several of the components of their computers, even the monitors and printers. A lot of custom non standard technology was used. Although this improved integration it also drove up prices compared to PCs. Likewise Apple like Microsoft largely made the whole Operating system by themselves.

Apple has now changed considerable on both hardware and software. Apple makes non of the important parts of their computers anymore. Everything is now off shelf parts as on the PC. PC manufacturers thus no longer have the price advantage over Apple as they once had.

On the software side, Apple has increasingly left more and more parts to others. In large part Apple's extra momentum on the Operating System side is caused by the Open Source movement. Instead of spending research and resources on developing a web browser from scratch, they used the KHTML rendering engine from the KDE open source project. Instead of making their own web server they integrated Apache from the open source community. For development tools they cut down the job by integrating their IDE xCode with the open source compiler gcc. For networking with windows they used code from Samba. The list goes on.

By doing this Apple has been able to catch up with Microsoft and use freed resource to focus on developing software which they excel at, thus adding value to their software solution that others can't. If Apple just used open source components they wouldn't be much different from Linux and they would have no competitive advantage. However Apple excels and user interface and used that advantage to create a tight integration of the software, aqua, a well thought out and polished user interface, spotlight, exposé etc which makes OS X stand out from the crowd.

Meanwhile Microsoft is burdened with developing every piece of software that their operating system needs. Apple pays nothing almost nothing the development of the open-source components they use.

Windows Vista
To be fair, Windows Vista will catch up to a lot of things in the Apple world. However, what is becoming increasingly obvious is that it is not going to such a big leap as it was envisioned. So many of the features that were supposed to make it better than OS X has been thrown out. At the same time Vista is released Apple will release Leopard and it thus seems unlikely that Vista will enjoy any advantage over Leopard.

Sure some things will be better in Vista but Leopard will bring new features not present on Vista which will keep their lead (although not as large). Vista lacks Spaces, there are no ways to make your own widgets etc. Microsoft used to have a good lead on development tools. Objective-C seems long in the tooth these days compared to Microsofts C#. And xCode is of course not as advance as Visual Studio. However with Leopard xCode will gain on Visual Studio and with syntax improvements and garbage collection Objective-C now compares favorably with C#.

Disclaimer
It would of course be hyperbole to say that Apple is killing Microsoft. Microsoft is a huge company with many legs to stand on. There are many areas for them to make profit so they are not going away any time soon. However the supremacy they once held in Operating Systems seems to slowly erode. Before Microsoft seemed to be winning everything now they are becoming just another player. They have been beaten by Google on the internet and despite massive efforts they have not been able to unseat Sony from the Came Console crown. Microsoft will still be around for a long time, but I look forward to a software world that is less dominated by them and with more choice.

Ethics of profit

2006-08-18T13:34:00.000+02:00

Profits is return on capital after wages and other expenses have been paid. Profit must be one of the most misunderstood concepts in economy. Frequently people think profit is a bad thing. Especially communists think profit it a bad thing. As profit is in Marx definition a bad thing because the owner of the capital gets profit for doing nothing.

In Norway we are particularly negative to profit. For instance we are against private hospitals because they make a profit. Nobody should make profit on sick people is the slogan. Funny then that not more people complain about physicians getting paid for their work. After all they making money of sick people. Likewise retirement homes should not be privately run, because nobody should be allowed to make profit on poor old grandma. I guess those nurses that look after grandma in the public retirement home should be really ashamed of themselves then for making money on poor old grandma.

It is all about the wording used. One could say private hospitals make a profit on helping sick people or on could say that they profit on people being sick. Both statements are equally true. However the latter look so much better on the tabloid front page ;-)

Somehow profit is in peoples eyes just something that gets put into rich peoples pockets so they can spend it lavishly on private Jets and too big cabins in the mountain. If this was the case then I guess profit would be a bad thing.

Except this is not the case. Most profits go to improve the company: expand, improve services, provide new products, increase production etc. Without profits there would be nowhere to get this money and the business could never really improve.

Public institutions are supposed to be so much cheaper because they don't require profit. Except they to need to get money to improve their operations as well. If they can't get it through regular income they will usually get it from government transfers. Essentially the only difference between private and public companies is that private derive their profit from consumers while public get from tax payers.

Communists believe companies should not get profits, as does a lot of socialist it seems. All revenue should be given as wages to the workers. However if that was the case. How would the company be able to expand.

Wages and profit on a farm
To illustrate this I will use the example of a farm, because it most clearly illustrate the importance of investment and wages.

We imagine a simple country, perhaps a colony with few people and hardly any opportunity for trade. There are wast tracts of land to grow corn on. The farmer has 10 units of corn to plant. This represents his capital. When he plants it he will get 20 unit of corn back. The yield is 2 in other words. The farmer has hired 4 workers to work the farm. At the end of the year he gets 20 units of corn. In other words his capital has grown and his profit was 10 units of corn. However the workers need a wage. So he gives each 1 unit of corn and one 1 units of corn for his own consumption. That leaves a profit of 5 corn units. This means that next year he will get 30 units of corn. However if he had done like the communists suggest and given all profit to the workers, he would be left with 10 units of corn as capital. The capital would never grow and neither would the workers wage. However by taking a profit, next year he is able to pay the workers 9 units of corn and still make a profit (30-15-9-1 = 5) of 5. It is thus evident that the larger wages the workers get the less economic growth will occur in this simple model.

Of course in the real world giving low wages is not good for the economy because nobody will be able to buy anything, so there would be no incentive to try to increase production. However the example shows that profit is necessary for the economy to grow, which again is necessary for worker wages to increase.

When are profits bad
So where does this negative attitude towards profit stem from when it only improves production and increase the potential for higher wages? My best bet is that profits are often equated with dividends. The owner of a company might choose not use all profits for further investments but rather to take out parts of the profits as dividends. This is money the owner can use for spending on consumer products and luxury. This is what people don't like. That the rich indulge themselves in luxury when others are poor. However dividends might not be used for this, it might be used to invest in other companies.

Thus profits should not be the concern of those who care about equality. The difference between rich and poor only emerges when they start spending. A rich person that spends all his money on investments is no better of than a poor person.

Dividends
In Norway I an often read how newspapers are complaining about companies that pay huge dividends to owners. They think this is wrong when they could have spent money on investments or higher wages. It is seen as throwing money in the toilet. However they seem to forget the owner did not put capital into the company out of charity. If there is no benefits to be had from investing in it then they might as well have put the money in the bank.

If companies pay no dividends then attracting capital becomes more difficult. With less capital, the potential for profit and higher wages will be lower. The receivers of the dividends might in fact even invest the money back into the company and thus no capital is lost.

Conclusion
Anybody who is concerned with equality in a country should be less concerned with the distribution of wealth and more concerned with the distribution of income and spending. In a society where rich people are wasteful and spend their money on private jets and cars, the rich are less likely to become even more rich than in countries were the rich live modest lives. An increasing gap between the wealth rich and poor is thus no bulletproof indication that society is becoming more unequal. On the contrary it might be an indication that the rich are showing more restraint and living less in excess.

An increasing gap between the wealth of rich and poor would be alarming if the economy was not growing because then the increase wealth would happen at the expense of the poor. However the increased gab most frequently happens during economic growth.

The return on capital typically gets lower and lower the more capital accumulates, so the potential for wage increase does not increase as rapidly as the accumulated capital. Thus it is natural to see a widening between rich and poor in a growing economy. Achieving equality could then better be done by taxing the typical consumption of the rich more than the typical consumption of the poor, and thus make sure that rich people will mainly stick to investing rather than consuming.

White lies about wealth distribution

2006-08-18T10:36:00.000+02:00

Frequently one can read in the newspaper (at least that is the case in Norway) about how 5% of the population owns 50% of the wealth or something similar. The exact numbers are not important. The point is the newspapers wants to make you feel like you are getting screwed. These 5% got it all and you got nothing.

What about sharing the goods. Why not split up all that wealth so everybody can have a better life?

Except it is not that simple. The first problem is that people only have a vague idea about what wealth is. The truth is that most people wouldn't be nearly as much better off as the number should indicate if one had split even.

Wealth is not money or gold, but rather assets like land, houses, clothes, machines, food etc. It could be almost anything but in the case of rich people, the ones who seem to own so much more that everybody else, it is not private jets and palaces but rather companies. That is were most of the wealth of rich people resides, as ownership of companies. What this means is that a lot of their wealth is simply factory machinery, warehouses, raw materials to make finished products, land etc.

Sharing this with everybody isn't going to immediately make anybodies lives better. You can't eat raw materials for chemical factories or live in a factory. Of course you could exchange your ownership in a factory for other more useful things. But who would you exchange with? You can't get more of your needs unless you take from somebody else (in the short run). You could take some of the excess from the rich people but as indicated they might not have that much more things that are of use to most people.

Happiness and the limits of Economics

2006-08-17T11:26:00.000+02:00

It should be well known that money can't buy happiness but neither does poverty. Having money doesn't guarantee your happiness. So far so good. Most economist will agree with this. However what they would commonly say is that although money doesn't guarantee anything it certainly doesn't hurt. All things being equal, more wealth will probably increase happiness and well being. It would rarely make it worse.

It is also baked into most economic theories that a 100 euros extra to a rich person increase his happiness less than a 100 euros extra to a poor person. Common economic theory assumes that all things being equal it is absolute wealth that determines a persons happiness. Thus although extra money benefits the poor more than the rich, traditional economists would argue that uneven wealth distribution today is okay as long as it allows poor to become more wealthy tomorrow. E.g. if I make 20 000 euro today and you make 40 000 euro, I would become just as happy as you next year if I make 40 000 euro then.

Except latest research on happiness (See Happiness by Richard Layard) shows that this is not the case. Absolute wealth is not the only factor. Happiness does not increase with increasing absolute wealth irrespective of others wealth. Absolute wealth matters but relative wealth also plays an important role. Meaning ones wealth relative to other people. This is a fact usually overlooked by economists. What it means is that status and ranks matters a lot to people. And unlike absolute wealth, this IS a zero sum game. If somebody improves their rank then somebody most get their rank reduced. Thus if you increase your wealth it has the positive effect of increased happiness from increased absolute wealth as well as from increased relative wealth. However increased relative wealth has a negative effect on everybody else. Their rank and status gets lower and they will feel less happy.

Richard Layard, the author of "Happiness" quotes an experiment to illustrate this. Students were asked whether they wanted to live in a world where they made 50 000 dollars and everybody else made 25 000 on average, or in a world where they made 100 000 dollars and everybody else made 200 000 dollars on average. We assume a dollar is worth the same in both worlds. It turns out that most students would rather live in the first world than the second.

What is the implications of this knowledge on economics? It means that one can't make up for unequal distribution of wealth by having higher economic growth. People will simply never reach their maximum happiness (from purely economic reasons) by any wealth level as long as there are people who are far better off than they are. Two other important aspects related to economy which is important for happiness is security and employment. Studies show that people simply hate insecurity at almost irrational level. People are willing to pay quite a high price for security. And being unemployed has a very negative effect on happiness.

These three factors, security, employment and wealth distribution means that a laissez-faire type of economy as advocated by market fundamentalist would never work to achieve a high level of happiness for the inhabitants of a country. So does this mean we should remove all insecurity and difference in wealth between people? Well actually no, Richard Layard, points out that having goals is also important for happiness. However the goals have to be reachable.

So the problem becomes, how secure should people be and how even should the wealth distribution be. Evidently it is hard to find the right balance. What comforted me somewhat about reading Layard's book is that he acquit welfare states like the scandinavians for economic policies that don't make that much sense to most economists. I must say it has puzzled me at times how we could be doing so well in nordic countries with the high taxes and over generous welfare benefits.

Obviously a lot of things can still be improved. I would prefer some less regulations in my home country Norway. But it is evident that there is no one right political and economic policy. You will always gain some and lose some. There is no need to roll over and adapt the American model although one can learn from the good parts as long as one knows the potential bad sides.

Zero Sum Game: The myth that will never die

2006-08-09T20:19:00.000+02:00

There is one popular left-wing myth that never dies. The myth that economics is a zero sum game. We have tried to kill it many times. Unfortunately it seems to have a thousand lives. Each time we kill it, it re-spawns somewhere else in another shape.

The myth can be explained quite simple: We have a piece of cake and everybody gets a piece. If somebody is to get a larger piece then somebody else must get a smaller piece.

Its many shapes and forms
This myth can take all kinds of shapes. E.g. that are only a finite amount of jobs. That if a job is eliminated in a factory through automation there will be one less job society indefinitely. Another shape of the myth relates to wealth and income. If somebody in the country is to earn more then somebody must earn less. So if the rich are getting richer then the poor must be getting poorer.

Why it is obviously wrong
Now it should be easy to point out that these assumptions are wrong. Over the years millions of jobs have been automated away. Everybody used to work as farmers and now 95% of those jobs are gone. And still we don't have massive unemployment. Likewise in almost every country both rich and poor have gotten wealthier. In other words the cake has gotten bigger, so even if the splitting of the cake is the same as before each one gets a bigger cake piece.

Globalization and the new myth
Unfortunately these obvious and irrefutable facts have not managed to kill the myth. In our new globalized world it has popped up again.

This time the myth as simply expanded outside the borders of the national state. This time it says: "Western countries are rich because the third world is poor". So instead of accepting the fact that the cake got bigger and that is why everybody inside a country got a bigger piece, that fact is being replaced by the myth that the whole world is a cake and people in the west have been getting bigger slices of this cake at the expense of people in poor countries.

The logical consequence of this myth, is that left wingers don't think poor countries can become richer without taking larger fraction of the cake. In other words, we in the west must sacrifice in order for the poor countries to become richer.

Why the globalization myth is equally wrong
To prove that the myth that poor countries can't get richer unless rich countries get poorer it should be enough to point to the fact poor countries have gotten richer the last years (e.g. China and India) as well as rich countries. In fact the whole world economy has grown almost every year so the cake is getting bigger. Still even facts like these seem incapable of killing the myth. Left-wingers and anti globalization advocates will simply point to Africa.

So in a vain attempt to put the final nail in the coffin of this myth as so many other before me have tried, I will attempt to give a logical reasoning why it is wrong.

The idea is that all the poor coffee, cotton and food growers and miners in the third world are poor because we pay so little for their produce. Thus they can not become richer unless we start paying more for it. Meaning we are supposed to relinquish some of our wealth for their good. And in applying circular logic, the left believes the poor will never get richer because we would fight it to avoid getting smaller piece of the cake.

So somehow they think that the price of products is what makes one rich or poor. Funny then that the price of practically everything keeps going down and we are not getting poorer, rather we are getting richer.

Selling chewing gum doesn't necessarily make me poorer than selling Mercedes Benz, although the later is far more expensive. If I could sell a million chewing gums each day as opposed to selling one Mercedes Benz each weak i know that I would pick.

Thus there are three ways in which a poor coffee grower can get richer:

We could pay more for his coffee (what the left think is the only way).

The grower could grow more coffee and thus sell more.

The grower could cut costs in growing the coffee.

What this means is that there is a way in which we in the west can get everything just as cheap as before and yet the poor countries can get richer. What it all boils down to is that poor countries don't need to charge more for the stuff they sell to get richer, rather they can simply start to sell more stuff. But how can they sell more stuff? By buying more stuff!

Selling cheap and buying expensive
E.g. say that at the moment a poor country sells 10 tons of steel to a rich country. The rich country makes 10 cars out of that steel. For the money the poor country gets for the steel it can buy one car from the rich country. For the money the rich country gets from the sale it can buy another 10 tons of steel and so it keeps going. At each transaction the rich country is left with 9 cars and the poor with 1 car. To get more cars, the poor country can start to make 100 tons of steel and sell that to the rich country. The rich country can then make 100 cars and give 10 cars to the poor country. From this it is clear that the increasing wealth of the poor country spurs increasing wealth to the rich country as well. The more money a poor country makes, the more stuff it can buy from rich countries and the more money rich countries make, which again means they can buy even more stuff in poor countries.

It should by now be clear that it is not the price of commodities alone that determines the wealth of a country but also the quantity of it that it produces. So if all things stay the same, the more a country produce the richer it will be. It should from this also be clear that if a poor country starts producing more then that can not possibly reduce the production in a rich country as long as people are willing to consume the extra produce

When increasing production wont help
Of course things are not that simple in the real world. A lot of poor countries have increased their production of coffee, sugar etc and they are not much better off. Since consumers don't really want more coffee and sugar the extra production can't be sold. There is an over production. And when that happens all the coffee growers will try to underbid each other to sell their coffee. Thus the price drops.

So the solution is for some of the coffee or sugar growers to increase production and the rest should quit growing coffee and start making something else, so the total coffee on the market remains the same and thus the price wont drop.

The freed workers could start extracting resources that are more needed. E.g. China has an ever increasing demand for steel to build more high rise buildings and cars. So poor countries could start making more steel without fearing steel prices would drop.

Cotton and Globalization

2006-08-09T20:18:00.000+02:00

A few days ago it was a sunny day, so me and my girlfriend went to town. We stopped by largest Book store Broese in downtown Utrecht.

I always like looking at books so I spent some time in there. I then came across a book simply called Cotton published by penguin. I had started to notice that a lot of the previous books I had read and liked was also published by penguin. So I looked at it.

As it says on the front cover of the book: "A good deal of history can be learned by following a single thread". I browsed through it and decided that this was an interesting book. Given my current interest in economic issues, in particular economic history, reading about the history of cotton seemed like a good idea. Given that for a long time it was not only the main consumer good for people but also the only mass produced one. The history of cotton is very much the history of the industrial revolution.

So I got the book. And I have read quite a lot of it. This is just a preview. I can say it surely didn't disappoint me.

It gives a lot of insight into how the industrial revolution happened, how world trade came about, the working class and the new capitalist class. It also gives a good idea of the nature of technological progress and advancement. Wars were lost and won on cotton.

I find it interesting with respect to the working of globalization. A lot of the things happening in world trade today already happened several times over with cotton in the past.

What is a high profit industry today is a low profit one tomorrow. What is a high profit crop is a low profit tomorrow and what was a good job today is a shitty one tomorrow.

In the start growing cotton was a source of great wealth in the southern states of the United States of America. Great fortunes were built upon it. It was so profitable that it turned the whole regions attention to the one crop. When things started going bad, that is when the price of cotton started falling they were blind to see any other way of life. A lot of alternative business opportunities were staring them in the eye. But they couldn't get their eyes off cotton. So with falling prices they responded with increasing production to compensate for the lower price per pound. Of course that just increased supply even more and lowered the pricer further.

The same seems to have happened in other countries that used to be very wealthy like New Zealand and Argentina. The great profits on wool in New Zealand and on beef in Argentina made people blind to anything else. Eventually prices would fall and the economy destroyed. Today were are seeing the same thing with coffee growers in the third world. It used to be a crop that much money could be made on but now supply has gotten so large and prices low. Societies are centered around it they can't get out of it.

Same deal happened to workers in the textile industry. When Richard Arkwright set up his first textile mills in England. Workers had quite favorable conditions. Pay, housing and treatment was good (by that times standard), and profits were good. Eventually the cotton cloth manufacture became huge and hell holes like Manchester emerged, where children were basically used as slave labour, often chained by their overseers. Sewers were flowing in the streets and few lived very long.

When textile industry started in America it also had the same good start. In Lowell, New England, the workers got good wages and houses and opportunities for self improvement. There was a library and lectures available. However in time conditions got worse. As prices fell there was pressure on wages. The workers resisted. But as then, just the way cheap mexican labour is flooding the American market, poor European immigrants came and accepted the jobs for lower wages and worse working conditions.

And as we can see in todays globalized world, how manufacturing is moving from the west to asia. Back then cotton manufacture eventually moved from the richer northern states to the poor southern (now poor because cotton had a low price) states were wages were lower and regulations less and the mills would be closer to the production of the raw materials. The south became the new center for cotton manufacture and a lot of people lost their jobs in the north. Whole town were abandoned, but in the process poor people who could barely get buy working on their cotton farms got a better life.

There are a myriad other interesting observations that can be made from reading the book. Cotton and its relation to slavery and the American civil war is equally intriguing as well as how the technology to mass produce cotton cloth came about.

But what caught my attention and was never spelled out in the book is why socialism never took hold in the United States. It is something that has stayed in my mind ever since I read Jeremy Rifkin's "The European Dream" were he give good clues to why socialism never caught on in the US unlike Europe. Adding what I have read in the book one can present three reasons:

Europe needed to create a social security need for those couldn't find a job or land to work. The US always had the wild west as social security net. Couldn't get a job or didn't like the conditions? Just go west and get free land.

As Adam Smith mentions in the Wealth of Nations. In the late 1700s wages for farm workers in the US were perhaps as much as 2-3 times as high as in Europe because of the huge amount of lack and the chronic lack labour.

Industrial towns in the US during the industrial revolution never became the pit of misery as in Europe. Conditions and wages were better. Not the least because of the need to offer comparable conditions to farm work.

A visit to Manchester in England inspired Karl Marx to write about the exploitation of capitalism when he saw all the misery. Perhaps if he had visited Lowell in New England, history would have taken a different course.

Another thing not spelled out in the book, but which is clear from the story is the nature of new industries with regards to profits and wages.

In the start like with any new industry, cotton cloth manufacture was very profitable, and wages high. Same things can be seen today about new industries. Apple computers made huge profits in the 80s despite selling far fewer computer than today, and the manufacture less efficient.

When cotton manufacture got more efficient profits started falling and so did wages. By the time Manchester became a large industrial city, conditions for workers had become very bad. How did this happen? How could it be less profit when everything is so much more efficient? Supply and demand. In the start they competed with manual cotton cloth manufacture which was very labour intensive and thus made the clothes very expensive. The first large scale manufacturers could then charge a high price because they only needed to be slightly cheaper than hand made products. Profits were thus very high. So as more cotton cloth manufature sprung up and started dominating the market, competition pushed down the prices and thus the profit.

The same was the case with Apple computers. They could charge enormous sums for a computer because competition and supply was low but demand quite high.

And that is the nature of industry. Old industry will give less and less profits until it is squeezed out of the country to a poorer one. Which then would become richer and eventually the industry moves again. Like textile manufacture stared in the northern states, then moved southern states and in our time it moved to Mexico or Asia.

Communism for dummies

2006-08-05T12:38:00.000+02:00

After hanging out at the communist forum I think I have sort of gotten what it is all about.

I realized it is all sort of like in the movie the Matrix. Right now you might be sitting at the office reading emails, talking to customers or writing a report. What you don't know is all while you are doing this you are being exploited. Exploited? Yes, that is true and you don't even know it. I know what you are thinking now: "Who is exploiting me and why?" The answer is the evil bourgeoisie. I don't know that much about them at the moment, but one thing is clear - they are the bad guys. The proletariat is the good guys. The great prophet Marx has prophesied that in the future the proletariat will overthrow the evil bourgeois. A transition period will then happen on the earth. This period is marked by something called socialism. At the end of this, heaven on earth will be established. This will be called communism. Under communism all your worries are gone. No more exploitation, you only work as much as you feel like and get whatever you want. All human conflict is gone and there is peace on the earth. Sounds great, eh?

Now, how can we get there to where the great Marx has prophesied? The first step is to open your eyes and realize that you are being exploited. Yes, I know that can be hard, but you must focus and it will become clear to you. The evil bourgeoisie has enslaved you with their powerful capital. With capital, the bourgeoisie enforce their will upon the proletariat. What you don't know is that you didn't go to work today out of your own free will. No, it was the powerful capital that forced you out of bed and into the office. It is the capital that is whipping you to read your email, write your reports and make calls to customers. If it wasn't for the capital you could have been sitting and home watching television or being down at the bar having a beer with your friends. The bourgeoisie is stealing this time from you. They feed on that time.

What makes matters worse is that the capital is alien to you. You don't know it. And yet with its invisible hand it forces you to work. This alienation is one of the greatest source of exploitation. Not knowing the capital is a very bad thing.

Now you might wonder, how do I break out of this bondage? The answer is actually quite simple: You must take from the bourgeoisie, the very thing with which they have enslaved you. You must take the capital from them. With the great capital you will subdue and destroy the evil bourgeoisie and bring peace freedom and communism to the world!

But how do you take it from them? The answer is you must start a revolution. Unfortunately the great prophet Marx never said how we were supposed to do that and few understood him. So in time the words of the great prophet was largely forgotten. The proletariat continued to slave under the bourgeoisie. But then a new great prophet Lenin was sent to earth to enlighten the proletariat about communism and revolution. Lenin deciphered the words of Marx and made them understandable to the proletariat

This happened in Russia. The proletariat started a revolution and took the capital from the evil bourgeoisie. Unfortunately the powerful capital could not be wielded by Lenin. It corrupted and blackened his soul. When the bourgeoisie had created the capital, they had poured all their power and malice into it. This evil force destroyed Lenin, and a new man - Stalin - took the capital and tried to do what Lenin was unable to. But not even Stalin was strong enough to wield the powerful capital. The capital devoured his soul and Stalin became and evil man that enslaved and tormented the proletariat with the power of the capital. Stalins successors tried to wield the powerful capital, but they could not control it and after several generations the capital broke loose from the proletariat and returned to its old masters the bourgeoisie.

So does this mean there is no hope? Can we not control the capital? Fear not for there is a way out. Lenin had defied the great Marx. He attempted to start the revolution when society had not reached the final stage of capitalism. Because of this the proletariat was not able to wield the power of the capital. But today in the west we are nearing the final stages of capitalism. The transition to communism is inevitable.

That is all folks, I will let you know when I learn more of the words of the great Marx.

Too much Economics

2006-08-03T02:45:00.000+02:00

I am starting to wonder why I didn't call this blog: Erik's ranting and raving about Economics, because that is what it is all about at the moment it seems. Well this is unfortunately just me. Never two thoughts in the head at the same time, just one. At the moment this thought seems to be Economics. I am already starting to drive my girlfriend insane about all the economics talk.

Anyway this lead me into new territory. I had to find someone I could bother with all this economics thoughts that have infested my brain. So I have ended up on a communist forum. Already managed to waste considerable time there but it was an interesting experience to "talk" to "born again" communists.

I hope I don't offend any of them because they should know about my blog by now. But talking to them reminds me a little bit of talking to my highly religious mormon relatives in Utah. I feel like I am really dense and don't get what is so obvious to them.

It also occurred to me that communism is more like a spiritual movement than a political one. Because it gets very abstract and almost metaphysical and not the least it is based on a lot of faith. Very strong faith!

After considerable debate I think I am finally getting what it is all about. So stay tuned. Because soon Erik, will be telling all you mortals about what communism is really about, and why you are being exploited every day by the evil capitalist without knowing it.

Is improved living standard possible under negative growth?

2006-07-27T14:29:00.000+02:00

Economist frequently talk in favor of free trade and open markets. Still almost every time a country opens it market it leads to economic recession. Why is that? Are the economists wrong?

In New Zealand opening up the economy seemed to produce a disaster. Unemployment rose. Productivity fell etc. This could of course be cause by other factors. However one internet page talks about improvements that happened in the bad years of the New Zealand experiment.

The page talks about New Zealanders getting better cars, phone systems etc. In some way it can seem like while production fell people were getting a better life materially.

To test this idea I did a thought experiment: Imagine a country with little foreign trade. A large part of its industry is making products of type A, a relatively small part makes products of type B. The country experiences good economic growth, and has a high level of employment.

However the country opens up to foreign trade. It now happens that the country's comparative advantage is in producing and selling goods B and not A. This simply means that relative to the rest of the world they are better at making B than A.

This even though productivity in A is much higher than in B. The reason why they still have an advantage over the rest of the world in B, is that the rest of the world is much more productive in A than this country.

Because of this situation, foreign production of A will be much cheaper and the inhabitants will start buying this instead from a abroad. The country's A industry will thus quickly die. Large amounts of workers become unemployed. Productivity fall because less people are employed in the highly productive A industry.

The B industry is now doing better, it is able to increase its sales. There is a great demand from abroad for its products. However it is unable to increase production because to workers from the A industry is not skilled at B work. B industry can not meet demand and start increasing wages to get more workers. But few extra come and the cost of production increases. The few people working in B industry is now much richer because they get higher wages. The people in A industry is poorer because they are unemployed. Thus this lead to a more uneven income distribution.

The bad
So as one can see the net effect of this is all bad economic indicators: higher unemployment, worse income distribution, reduction of productivity and negative growth.

The good
However that is not the whole picture. Because suddenly citizens can buy goods and services much cheaper from abroad, thus they get cheaper and better cars, Televisions etc. However since it is only imported goods that become cheaper while services produced domestically retain the same price and the wast majority of people have less money, things like physicians, kindergarden, education etc should become more expensive.

So in short term the country as a whole is worse off. For years there will be a sharp decline in A and a weak growth in B (It is much easier to reduce production than to increase production). Thus economic growth will not pick up until the decline of A has finished and people have been reeducated to work in B as well as necessary capital investments have been done in B. After that the economy will start growing again.

Let's look at the original question again in a simpler way, to make it even clearer that economic decline might not mean that people are worse off.

Currency example
Assume that a country dramatically increase the value of its currency. All domestic industry will thus become uncompetitive and start dying. However because the currency is worth more people can buy from abroad much cheaper than domestically. This means everybody will get much more products and services. Thus in a very short term a sharp economic decline can mean a sharp incline in peoples material wealth.

If the currency is not allowed to fall in value, the central bank can continue to print money and people can continue to buy good and services cheap without the country producing anything. Of course that will not continue very long. Foreigner will see the currency as less and less worth, because they can't get anything for it. Thus the value of the currency falls and it becomes meaningful to produce again in the country because prices are lower than abroad.

The effects I described is quite consistent with what happened in New Zealand. But what could they have done different? By opening the economy over time and not immediately the A industry would have a more gradual decline and the B industry would get more time to build up.

However in New Zealand's case it might not have been good whatever choice one made. Since their was an overall decline in the profit on their exports a gradual opening up would just mean a very long decline as opposed to a sharp shorter term decline.

New Zealands unfortunate economic fate might be explained as New Zealand exporting product A and B and importing C. The value of A was falling so they would get continuously less C for A. Instead of increasing production of B they started to subsidize A so production could be kept up. Thus revenue from B is used to keep A artificially high. But total income is falling so this is not sustainable.

Thus eventually they would have to remove subsidies on A but then the real price of A would have dropped so much that it would cause a crash in the economy. Thus they got a harder crash when the opened their economy than they had needed to if they had done it earlier.

Why did Ireland fare better? Well they invested much more in education and government was more active in building up new business. Thus as A fell they were faster at building B, than New Zealand was.

Anyway this was just my speculation on the subject of why opening up an economy often has such immediate disastrous effect.

Why planned economy is good and big companies bad

2006-07-26T12:55:00.000+02:00

Since I already did some communism bashing with comparing it to slavery I thought I'd balance it out by looking at the positive aspects of planned economy. (NOTE: Communism here and in previous post is used like what most people associate with it. E.g. the system in former Soviet Union. Correct defintion of that system is hower socialist).

Most people will easily dismiss planned economy. It is kind of like, look at Soviet Union and how that worked out.

But the fact is that we are surrounded by planned economic systems every day. Our market economy is in fact not a pure market economy. It is mixed with planned economy. And that goes whether you live in the US, Hong Kong or Norway.

Before we get into where we can find planned economies in our capitalist societies, it is worth defining what I mean with planned economy as opposed to market economy.

In a market economy, price of goods and amount of produced goods is determined by supply and demand.

In a planned economy on the other hand somebody will plan centrally how much should be produced of each good. Production is determined by need rather than what is profitable.

This is in fact how companies operate. Within a company production of different goods and services are planned. The company produce different goods and services dependent on need. It is when the final product leaves the company that we are back in the market economy.

Let us take an example. In a car company, planners figure out how many units of different car parts have to be made to build a car, and the total number of parts that have to be made to build a certain number of cars. The cars themselves are sold on the free market, but the parts making up the car is made in a planned economy.

Of course this model has changed over time. E.g. when Ford was still running Ford motor company, it was a completely vertically integrated company. Steel, coal and other raw material would come into the company and then it would process these to make steel, and other basic materials. From this they would make parts that would finally be assembled to a car.

Just in time production
Today car production has moved farther away from that extreme case of planned economy and instead buys most of their components in the market place. But the last years there has been almost a return to planned economy. Not in the old ford way though. Car companies buy car parts from other companies but they make long term agreements. So every time they buy a part they don't go out on the market and get the cheapest one. Instead the form long term partnership with suppliers. Together they form a planned economy. They plan together size of production and what units to produce etc. So in the short term it is a planned economy, but in the long term it is a market economy because they can change supplier in the long run if it should start to overcharge or provide crappy components.

Heavy industry
So in effect the Soviet Union was one big company monopoly. Such a company could easily supply space industry or military where clear goals for production can be made. One one decided how many tanks or space ships one wants to produce one can easily calculate how many other components one needs to create to do this.

Consumer goods
Problems start to appear however when the company needs to supply consumers. Because what exactly is it the consumer wants? Consumers are not a unified mass and thus it becomes nearly impossible to determine how much to produce of different consumer goods. Hence constant oversupply or undersupply of goods in former communist countries.

Why big companies are bad
It should thus be clear that planned economy and the market economy both have strengths and weaknesses and one benefits from combing the strengths of both.

If one realize that the Soviet Union was nothing but a huge company it should also be clear why big business can be harmful to society and the economy. The bigger a company becomes the closer it gets to having the same disadvantages as the Soviet Company had. When larger part of our production is put inside one company then a larger part of products is taken out of the market economy and put into a planned economy. This will create economics of scale for those products which is good but at the same time because there is no competition in producing those goods one runs the risk of production methods not improving because there is no competition.

Windows vs Linux
I think the case of Windows vs Linux is interesting in this respect. Through Microsoft, Windows is representative of big business, while Linux is associated with radicals and almost socialism. Thus it might be tempting to compare Linux to Soviet planned economy and Windows to free market. But nothing could be further from the truth. In fact it is the opposite.

The making of Windows is done like a product is made in a planned economy. One big company makes all the different components and puts them together. In the Linux world there are several companies and groups each making different components (software) that is in direct competition with each other. Windows has the advantage of a planned economy in that it can streamline the whole production process and make all the components fit neatly together. This can not be done in the Linux world. However the Windows world suffers from the fact that there is no competition in making its "goods and services" (which is software and software components in this case). E.g. there is only one web browser. If a web browser that is better than Internet Explorer appears they can't put it in. Linux on the other hand can always insert the best web browser.

Of course this is not a good example, since user can always install their own browser afterwards. However for great number of software components that is not possible.

But what approach is best in the end is hard to say. The difficulty of integrating components means that a free market of software components don't have a clear advantage over a planned economy of software components.

Pipelining and the industrial revolution

2006-07-25T12:52:00.001+02:00

The industrial revolution is often explained in school as happening because James Watt invented the steam engine (actually he didn't but he made the first well working one). Or the slightly more complicated reason: it happened because a bunch of people invented a bunch of cool stuff like Spinning Jenny and Cotton Gin.

However that explanation is lacking a best. It doesn't say why all these inventions suddenly happened. Did they all just get lucky suddenly or did Europe suddenly get a good educational system.

Of course things don't happen out of the blue. There has to be an incentive to come up with this idea.

And that has a lot to do with the pipeline. I already explained reasons for using the pipeline to increase production. However what I didn't mention is that dividing the task into subtasks make each subtask being done faster. E.g. in the case of the shirt makers. The person cutting the cloth will become much faster at cutting cloth than the craftsman was when he did all the tasks himself. He will be faster because he doesn't have to change tools all the time, he just uses the scissors all the time and he gets more practice doing it than the all around craftsman because that is all he does.

This is the benefits of labor division that Adam Smith talks about in great length in the wealth of nations. As the demand for goods increased (caused by increasing and wealthier population), pipelines could be made. When it was low single person could usually create enough shirts or whatever else people needed for the market.

As the pipelines got longer and longer, the sub tasks would get smaller and simpler. Thus the sub tasks would more easily lend themselves to be performed quicker by special tools or machinery.

What is also worth nothing is that as pipelines get longer more half processed material is constantly inside them. So e.g. if shirt maker can't afford to buy wool for shirt number two until he has sold shirt number one, then the pipeline would not works as he needs wool for two shirts tied up at the cloth cutter and sewer at any time. This along with tools represents what economists call capital. capital along with work is used to create things.

It should then be obvious that very long pipelines require a lot of capital. Thus to build long pipelines a country needs both to accumulate capital and have a big enough market to be able to buy all that the pipelines produces.

Why the industrial revolution happened in England and not China
Apparently it is a big mystery to all economist why the industrial revolution did not happen in China given that they were so advance so early. What I find weird then is that Adam Smith explained why quite well 230 years ago. Did people miss this? I read a paper by some economists that had attempted to calculate the chance of the industrial revolution happening in different countries. They found that by all accounts the chance was much higher for it to happen in Britain than anywhere else. And the chance for it to happen in China was very low.

The way they computed this was not very different from how Smith argued without using math. They took into account population density (density and not total size counts because it is expensive to transport goods), ease of transportation as well as wealth distribution into account. England "won" over China because it had more even wealth distribution. Population density was similar which should give similar size for markets of manufactured goods. However since the wealth in China was concentrated with the rich, the main market for good would be rich people. But will only buy so many clothes, furniture, tools etc. Instead a large part of they wealth will go away to holding numerous servants, build large palaces and buy were expensive luxury articles. Thus the demand for manufactured goods would be much lower in China than Britain.

The failure of the great Ancient Empires to industrialize
Some people talk about an industrial revolution light happening in Europe in the middle ages. There is some basis to say this since productivity increase a lot in that period compared to earlier times.

Why could the ancient world of the Romans be so advance and still they failed to do this? Slavery has been blamed for this, since it caused no incentive to improve productivity since labor was cheap. I think this is mostly true but I want to expand and speculate some more on this with Smiths ideas about requirements for an industrial revolution.

Since both the Romans and Chinese distributed so much wealth to the elite, I believe there would be less pressure and incentive to improve the productivity of manufacture of goods for common people. Since commoners would generally not have money to buy anything.

I think the same could be said about the greeks. Because of all the slaves there was never much market for manufactured goods.

However this would create a larger quantity of rich people with little worries about anything and loads of spare time. They would have enough time to wonder about the mysteries of the universe, write poetry and literature. Poorer people on the other hand would be more inclined to think of their everyday problems of e.g. producing enough food. Thus it seems likely that societies with large quantities of rich people excel at arts and science. While societies with larger middle class will be primarily concerned with engineering (improvement of manufacture and production). This seems fit quite well with history. Ancient Egypt, China, The Roman Empire, the Aztecs etc were very advance in pure science for their time. Medieval Europe was not but was far better at production. It can also be seen in relation between the US and Europe. When the US had much more even wealth distribution than Europe, pure science was not doing very well in the US but there was a lot of things happening within engineering and problems related to production and manufacture.

All great advances in Mathematics and theoretical Physics happened in Europe, but the US was still were practical applications like the light bulb was invented and the assembly line.