The trouble with budget Android phones is that a typical user is likely to be less tech savvy. People like me are happy to shell out large sums of money for the best devices. But low end users are less likely than tech savvy users to be able to cope with the drawbacks of current budget devices. These tend to be slow, laggy and stuttery, and have small screens, inadequate displays and less than responsive touch screens. All these things confuse non-tech savvy users because their mental model of the phone does not include invisible, behind the scenes processing. Tap an icon and nothing happens? The natural thing to assume is “I did something wrong”, get frustrated and tap it again. By which time the phone has started to respond and that second tap starts some other confusing behaviour.

In fact, a less tech savvy user is likely to be better off with something like an iPhone because it guarantees all of the above will never be a problem. But these are expensive.

It is only a matter of time, though. The Huawei Ascend G300 has a decent sized screen and a decent CPU. This could be the breakthrough phone. If not, a year from now I imagine the situation will be greatly improved.

from Plus Public Activity Feed for Rob Fisher https://plus.google.com/115288849695545002165/posts/guVBJWtcMhE

from Plus Public Activity Feed for Rob Fisher https://plus.google.com/115288849695545002165/posts/Ai8uZQyQm9u

My best bits from Samizdata:

• A summary of Detlev Slichter’s appearance on Start The Week.
• A bit about software patents, in particular Google and Apple.
• Thoughts on selling libertarianism.
• A summary of Detlev Schlichter’s book.
• A discussion of map vs. territory.

Mark Zuckerberg: Inside Facebook

Decent in that I learned something about the various business models that I didn’t know. And the journalist talked about technical details of a subject I understand without being wrong, which is rare. And it wasn’t a hatchet job about the dangers and risks and general awfulness of Facebook and business in general.

In fact the criticism of Facebook was pretty weak. If I “like” a company on Facebook, it can pay to display adverts to my friends that say, “Rob Fisher likes [company]“. This could be construed as using me in an advert without my consent. Or maybe not. The documentary did not seem to have a strong opinion.

And there were academics interviewed who made arguments such as: by keeping in touch with more people, we are having fewer close friendships. Well, anyone can tell for themselves whether that is true, and whether it is a problem.

But the best bits were the bits explaining how Facebook makes money. This included a demonstration of the information available to someone creating an advert. The example was a product for brides, and showed how various filters could be applied (“female”, “engaged”, “interested in beauty”) to see how many people would see the advert. This looked powerful. But not as powerful as the use of Facebook to talk to customers. This segment concentrated on companies’ attempts to get people to leave comments on their pages so that the comments get shown to friends, thereby generating a kind of word-of-mouth advert.

It strikes me that the best way for a company to use Facebook is to let your employees have real conversations, like real people. The documentary didn’t really go there, unfortunately.

Further, our investigation has found that top pay is a symptom of market failure based on a misunderstanding of how markets work at their best.

Markets work at their best when people can trade freely.

Within companies, fair pay matters. It affects productivity, employee engagement

If it is true, free markets will discover it. The best performing companies will be the ones with the fairest pay. No commission needed.

and trust in our businesses.

This is a matter for the customers. In a free market, if they don’t trust a business, they don’t have to do business with it.

Pay in publicly listed companies sets a precedent;

That doesn’t make any sense. Pay is the result of negotiations in a free market; A’s pay is not influenced by B’s: both are affected by the presence of A and B negotiating in the market.

when it is patently not linked to performance, or rewards failure

In a free market, no-one is rewarded for failure. By definition, no-one voluntarily pays for something they do not want.

it sends out the wrong message

It is not a message. It is a transaction between private individuals.

and is clearly a symptom of a poor functioning market.

If people are paying for things they don’t want, then they cannot be doing so voluntarily, so yes, the market would be performing poorly. But the High Pay Commission does not agree with the decisions on pay that are voluntarily made.

In addition, high levels of inequality in income contribute to sectoral imbalances, regional disparities and asset bubble inflation.

Where to start? Inequality is measured wrong, anyway. Wealth is not proportional to money. The top 1% might have diamond encrusted watches, but a cheap Casio still tells the time. I don’t know what a sectoral imbalance is, but it’s probably to do with teachers getting smaller pay rises than the CEO of BP. In a free market, the top teachers might well get pay rises as big as the top executives. But then they’d be in the same sector. Regional disparities are probably caused by a combination of planning regulations and the plain fact that productivity increases with population density. Asset bubble inflation is caused by government policy that props up asset bubbles, like bailouts and manipulation of interest rates. None of this has bugger all to do with the CEO of BP’s £4.5m salary which, frankly, doesn’t even sound all that much.

I’m exhausted, and goes on like this for 65 pages.

Oh, here’s an enlightening quote:

“You have to realise: if I had been paid 50% more, I would not have done it better. If I had been paid 50% less, then I would not have done it worse.” –
Jeroen van der Veer, Former CEO of Royal Dutch Shell

This is probably true, and completely irrelevant. If they’d been prepared to pay 50% more, they could have hired someone else who was better.

It gave me the idea that you could question anything, that it was possible to question anything at all. You could question religion, you could question your own culture’s most basic assumptions. That was just unheard of—where else could I have gotten it? You know, to be thirteen years old and get your brain plugged directly into Philip K. Dick’s brain!

That wasn’t the way science fiction advertised itself, of course. The self-advertisement was: Technology! The world of the future! Educational! Learn about science! It didn’t tell you that it would jack your kid into this weird malcontent urban literary universe and serve as the gateway drug to J. G. Ballard.

And nobody knew. The people at the high school didn’t know, your parents didn’t know. Nobody knew that I had discovered this window into all kinds of alien ways of thinking that wouldn’t have been at all acceptable to the people who ran that little world I lived in.

I love the idea that SF is so subversive. I experienced it too, around the same age, but I didn’t realise at the time what was happening, and I don’t think I realised it since until Gibson pointed it out to me. There does seem to be a correlation between SF fans and, say, libertarians, who are certainly in the habit of asking more questions about the world than most people. But I don’t think it occurred to me that SF was the *cause*. Perhaps, to an extent, it is.

Presumably the idea is that since only government action could reduce emissions enough to avert global warming, you need big government to solve any such crisis. Libertarianism can’t solve this because the atmosphere is the ultimate commons.

But whatever the seriousness of global warming and whatever its causes, more freedom will always be a better solution than less freedom.

There is no conceivable problem that cannot better be solved by a free society than by a society ruled by a large state.

Free people are richer, more innovative and can respond more quickly. Governments are slow, and because they are centralised have a tendency to make the wrong choices. A government can only make one choice at a time, so it goes to its best experts and they decide what is to be done and it gets done, and then we find out what the unintended consequences are and start again. This is far inferior to a free market of competing ideas where lots of things get tried and winners emerge.

But what if the only way to prevent catastrophe is it dramatically reduce emissions immediately? Then there will be catastrophe! Governments are not able to co-ordinate the whole world into reducing emissions. They’ve been trying for long enough and not succeeding. Now, how do you want to face catastrophe? Free, or constrained?

For any society that prefers more goods and services to fewer goods and services, a high savings rate and low interest rates are certainly desirable, as these two will help build and maintain the capital stock that allows for high-productivity production processes. Yet, it is also clear that any attempt to force interest rates lower through market intervention is dangerous and ultimately futile. Low interest rates are of no use but, indeed, harmful if they do not correspond with the population’s time preference. If the government of a poor country managed to artificially lower the interest rates on the loan market with the aim of encouraging borrowing, investing, and the expansion of a wealth-enhancing capital stock, they would certainly not do their population any favors. The low rates would cause the reallocation of scarce resources away from where they help meet present consumption needs to where they will deliver future and better and cheaper goods. However, the time preference of the population is still high. Meeting the needs of the present is still a priority, and only higher interest rates will communicate these preferences correctly and ensure the appropriate use of resources. In an extreme scenario, we could imagine people having to go without food, clothes, or shelter while resources get shifted to building factories and office buildings.

Schlichter also shows how fractional reserve banks can reduce interest rates to encourage people to take out loans. This is how they decrease their reserve ratios, creating money.

in order to expand their loan business, fractional-reserve banks lower the interest rate on new loans and, as more loans are extended, bring new money into existence. Since the effect on the loan market is identical to an increase in voluntary savings, the entrepreneurs who take up the extra funds and invest them have no way of distinguishing one from the other.

So entrepreneurs, encouraged by all this cheap credit, invest in new projects. This applies particularly to marginal projects that would not be viable at a higher interest rate. These projects are likely to fail when demand fails to materialise and prices start to rise as a result of the new money creation.

What I don’t understand is how this fits in with the current situation. We are told that banks are not lending enough money and no-one is investing. And yet interest rates couldn’t be much lower. What is the missing part of the picture?

GDP is all well and good as a measure of productivity if it adds up all the values of the voluntary transactions. This is because any voluntary transaction must increase the wealth of both participants, otherwise they would not have volunteered for it.

But GDP also includes involuntary transactions, and these do not increase wealth. If they did, people would volunteer for them.

So let’s sort out the semantics: Let vGDP stand for the value of all voluntary transactions. Let GIT stand for “gross involuntary transactions”. Let GDT stand for the value of all transactions. This is what is popularly called GDP. Then:

GDT = vGDP + GIT

Rearranging:

vGDP = GDT – GIT

If the government increases taxes, all other things being equal, productivity is reduced.

It might be useful to measure vGDP.

Of course, when politicians fixate on something they can measure and try to improve it, they lose sight of what it is the measure means. So school targets result in a tendency for students being taught only to pass exams; crime targets result in police tending to investigate only the easiest to solve crimes.

And GDP targets result in money printing to boost GDP figures. But:

It will lift GDP statistics temporarily, never lastingly. It will not lead to a better use of resources, to better human cooperation in markets. It will not lead to innovation, creativity, or more entrepreneurship. It is a trick that the money producer plays on the economy for short-term effect, and it cannot increase the efficiency and productivity of the economy.

So says Detlev Schlicter in part two of his book Paper Money Collapse.

That’s because when new money is created its recipients spend it on goods and services, which increases the number of transactions and therefore GDP. But there aren’t really any more goods and services being produced. The economy hasn’t really grown. The recipients of the new money spend it, and the people they give it to spend it, and so on until prices start to rise, as they must because there is demand but no more supply, which causes the demand for money (as opposed to goods and services) to rise, so that the holders of the new money start to hold onto it, instead of spending it. Everyone whom the money has not yet reached is faced with rising prices but no new money.

The other way governments seek to increase GDP is by government spending, or to put it another way: involuntary transactions. These don’t create wealth in the way voluntary transactions do, because if someone takes your money by force, then buys you something they think you would like, it’s not likely to be something you really want. It *might* be, by pure chance, but it’s unlikely, so on average involuntary transactions don’t create wealth.

Paying one man to dig a hole, and another man to fill it in again increases GDP but doesn’t create wealth (and no-one would do this voluntarily, though it might make a nice government make-work scheme). Paying men to build a bridge might create some wealth by improving the transport infrastructure (which is seen), but if you’ve taken money by force to pay for it, then you’ve taken money that people would have preferred to have spent on something else (unseen). Something that would have created even more wealth than the bridge.

So if people say the government should not fixate on GDP, they are right, if probably for the wrong reasons. Growth as measured by GDP is only growth if it was caused by voluntary transactions. The only real growth is a growth in voluntary transactions. The best way a government can increase real growth is to increase the number of voluntary transactions which it can do by decreasing the number of involuntary ones, by cutting government spending.

A problem with social contract theories that allow taxation (and other forms of institutionalized conscription) in the name of some collective good is that they purport to bind people not yet able to participate in the decision-making process (future generations). This is especially pernicious when future resources are allocated for current consumption through government debt and deficit spending. Generational indentured servitude is incompatible with personal liberty, and it’s just one of the milder consequences of collectivist philosophies.

It really is that simple. So why do ministers and intergovernmental organisations struggle with it so much?

We’re tired of picking up the bills for other people’s kids. We already pay millions every year in school taxes.

— Lindsay Naegle

You can’t change the rules in the middle of the game! We never would have had these kids if we thought we had to pay for them. Promises were made!

— Homer Simpson

The Simpsons: Season 15 Episode 8