back to article You're inventing the wrong sort of tech for bad people who want to buy it. Stop it at once

The comical success of the messaging app Yo is apparently proof perfect that Silicon Valley is doing everything wrong. It is supposedly proof, if any were needed, that the hypercapitalism of the tech scene means that people just hunt for the next quick flip rather than attempting to grapple with the real problems that besiege …


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  1. Gordon 10

    impressed - not so much

    One rather suspects someone who has to have that many institutions to his name is slightly inadequate.

    1. Tom 13

      Re: impressed - not so much

      I was thinking "Yes, but I suspect not in the way he wants me to be."

  2. Anonymous Coward
    Anonymous Coward

    Human nature doesn't change

    For much of history in the West, problems of poverty, famine, war and disease went ignored while the best brains of each generation went into the Church and argued over the interpretation of obscure bits in the Bible. When Roger Bacon, in the 13th century AD, suggested that maybe efforts should be focussed on things that would improve the life of the common people, and remarked that the Arabs were doing a pretty good job on improving knowledge - he got locked up.

    Perhaps there is sound reasoning behind this. Terry Pratchett remarks somewhere that rulers always have problems with people who can think thoughts above a certain calibre. Keeping the best brains of a generation working on fluff might mean they aren't working on cancer cures - but it might equally mean that they aren't working on a massive cyber fraud, or taking control of the Minuteman system.

    1. Carl Zetie

      Re: Human nature doesn't change

      Roger Bacon was a Franciscan, so what does that make Francis Bacon?

      (It helps if you read that in Dennis Miller's voice).

      1. This post has been deleted by its author

        1. Anonymous Coward
          Anonymous Coward

          Re: Human nature doesn't change

          Its called humor. You did notice the wooshing noise over your head, didn't you?

          1. Anonymous Coward
            Anonymous Coward

            Re: Human nature doesn't change

            Humour, whooshing, please - I'm British and I can spell properly.

            As an American, you wouldn't grasp the concept of delivering an absolutely straight response to a feeble witticism. But it's a common technique in our British sense of humour, which is quite different from yours.

            1. Anonymous Coward
              Anonymous Coward

              Re: Human nature doesn't change

              "As an American..."

              I am a trollbot from France.

  3. The Mole

    To me the issue isn't that the Yo app was created (the inventor obviously has a far better understanding of the market than me to predict that such a simple and limited app can be sufficiently valued for people to download and use. And I don't disagree that there is some level of value there for some people individually - though very limited value to society as a whole.

    The issue is that some venture capitalists believe that value can be realised into tangible hard currency..That they believe that that inspiration and 8 hours work is worth investing $1 million dollars and that somehow they expect significant returns to justify that gamble. Perhaps the inventor is really a genius as I (and most reg comentards) fail to see a business model which could possibly come close to doing that (given the barriers to entry is 8 hours work if not less). The company is therefore perceived as being blatantly over valued in a dot com 2.0 bubble. That million dollars is likely to be spent on operations such as marketing which add little value.

    Captial is finite, there is an opportunity cost of that million dollars being invested in company A rather than company B. Both may produce value but in a rational market if company A produced less long term value than company B then company B should get the money not A. The professors argument would seem to be that there are far better businesses that have the potential to provide far more value not only to the end users, investors but also externalities benefiting society as a whole.

    At some point this dot com bubble will burst (valuations are clearly excessive compared to projected income and a business plan of make big losses and then be brought at an overinflated price isn't sustainable). When the bubble bursts investors will loose money meaning they can't invest in other stuff, or get hesitant and invest in 'less risky' markets. In both cases firms producing products with real tangible long term value are also going to suffer and fail to get the necessary investment to bring that value to fruition.

    1. Anonymous Coward
      Anonymous Coward

      @The Mole

      I agree in principle with much of your post and I upvoted it, but I take issue with "capital is not finite". Banks create new capital by engaging in activities which make them money but also create apparent money ex nihilo (by inflating the value of existing companies.) For instance, by inflating the price of Apple stock from $500 to $700 they make a paper profit some of which can then be "reinvested" elsewhere. Of course at some point there will be an "adjustment" and some people will lose a lot of money, but most of them don't work for banks or hedge funds so they don't matter.

      That million dollars is probably notional profit. It's probably better that it stays in the pretend economy rather than spilling over into the real one, because when the value of Yo tends linearly towards zero with a very high gradient, ex nihilo fake money will evaporate, helping to conserve the value of that real economy. And a few programmers and network people will have had their wages paid for a bit.

      Sarcastic? Me, never.

      1. Destroy All Monsters Silver badge

        Re: @The Mole

        "Banks create new capital by engaging"

        Two problems:

        1) Technically, the CENTRAL BANK does that and BANKS then pyramide the fiat money avalance on top of this.

        2) This is NOT capital. Capital is actual savings in actual money like metals (today called "hoarding" as the government outlaws the practice) to be liquidated and invested later in order to see a "ROI", as well as existing machinery, buildings, raw materials and human skills to be used in production of goods. Here we are talking fiat money, very different from actual money as the government can destroy this kind of money at will (and currently does, Zimbabwe style).

        People who mistake their fiat money hoard for actual capital have a problem. They are being robbed blind.

        1. Anonymous Coward
          Anonymous Coward

          Re: @The Mole @DAM

          Try telling a capitalist that his shares don't represent capital, and see where that gets you.

          "actual money like metals" - metals are speculated in just like shares. Have you ever heard of the Bunker brothers? Their price is also quite elastic - the price of tin and nickel varies by far more than world demand due to rather inelastic supply. Example: when I re-engined my boat I fitted a keel cooler because it was cheaper than all the gear for a wet exhaust. When I sold it I had to advise the new owner not to let on that it had a cupro-nickel keel cooler, or he would come back one day and find someone had removed it. The nickel price is still high but it's 40% of what it was when I sold it. In roughly the same time frame, the Apple share price has increased by a factor of 6.

    2. Anonymous Coward
      Anonymous Coward

      > Both may produce value but in a rational market if company A produced less long term value than company B then company B should get the money not A.

      That isn't a rational market, that is a market that knows the future since long term value can not accurately be known.

      You also have the problem that investing in 'A' might increase the capital you have available to invest in the short term which then allows you to invest more in a long term investment in company 'B'.

      Putting all of your money in a long term investment loses you liquidity, you can not handle problems or take advantage of opportunities that arise now because your money is tied up. Putting everything in short term investments usually involves more volatility and risk.

      So when you decide whether to invest in company A or B you make your decision is based on more than what you perceive the long term value to be.

    3. Anonymous Coward
      Anonymous Coward

      > (given the barriers to entry is 8 hours work if not less)

      No. The barrier to entry is the idea plus the work. The quantity of work is largely irrelevant (unless it runs into years), it is the quality* of the idea that creates the barrier to entry.

      * Yes, I do think the idea behind Yo is crap but if I knew a good idea when I saw it then I wouldn't be commentating here, I would be enjoying the fruits of my investments on a beach in the Cayman Islands.

    4. Ken Hagan Gold badge

      "(given the barriers to entry is 8 hours work if not less)"

      The barrier to entry is 8 hours divided by the one in a million chance that your fart app (or moral equivalent) will be the one selected by Fate to enjoy its moment in the sun.

      For a $1m dollar investment, that's pricing your time at roughly a dollar a day. If you really are doing this in your spare time, for personal amusement, that's probably fair. As a business model ... not so good.

  4. RobHib

    Much tech has lost the plot.

    I too could write a book on this subject but I'll be brief.

    You know the tech world's gone mad when you find it's cheaper to buy replacement printers rather than ink cartages.

    1. Destroy All Monsters Silver badge

      Re: Much tech has lost the plot.

      Sounds like an opening for an entrepreneur.

      Unfortunately, state-granted monopolies called "patents" are there to keep any new entrants out. Same old, same old.

    2. Anonymous Coward
      Anonymous Coward

      Re: Much tech has lost the plot.

      Look for the book dot.con on Amazon - ISBN: 0141006668 It covered things pretty well 10+ years ago and yet the same patterns still appear.

      "When the company selling cheap seats for an airline is valued at more than the airline company itself then you've a good idea things have gone wrong.."

      1. I ain't Spartacus Gold badge

        Re: Much tech has lost the plot.

        "When the company selling cheap seats for an airline is valued at more than the airline company itself then you've a good idea things have gone wrong.."

        That's not neccesarily true. Airlines are horribly high risk. Just look at the performance of the airline industry over the last 50 years. During recessions and world crises, or times of unusually high fuel prices, the entire airline industry loses billions between them. They also have to raise massive amounts of long-term capital to pay for planes.

        Whereas a ticket shop just has to sell tickets, with very low overheads. So long as they can make profits, and have some way of protecting/differentiating themselves from other market entrants, there's absolutely no reason why they can't carry on making money during the frequent aviation industry slumps.

        It's far harder to shift 10 unwanted Airbus A380s (and the massive debt you took on to buy them), than it is to close a call centre or two. Euqally it's far quicker and easier to open another call centre, than it is to get hold of a bunch of big planes, and the cash you need to pay for them.

        1. Anonymous Coward
          Anonymous Coward

          Re: Much tech has lost the plot.

          "That's not necessarily true. Airlines are horribly high risk."

          Yes, and that's why there is something soooo wrong in having a company that sells something that is produced by a company which is a high risk investment valued more than the high risk company itself. The higher valued company doesn't lower the risk of the other in any way, and depends on it for its very existence... not very sound IMO.

          1. I ain't Spartacus Gold badge

            Re: Much tech has lost the plot.

            Risk isn't always a good thing that should be rewarded. Sometimes people take stupid risks. Or take risks because they're stupid. There's no morality that says, becasue you took a risk you deserve loads-a-money. Hopefully risk will be rewarded if managed successfully. But why should you get anything for screwing things up?

            As an investor I might want a low risk portfolio, in order to keep what I've got, rather than trying to grow it. Then I'd buy boring companies that do sensible things. Such as a successful boring company that sells tickets and makes predictable profits. Rather than scary airline shares. If this so happens to be a time of the greatest aviation industry recession since the 1930s (like the dotcom bust your book is about), then the rest of the market is likely to agree with me, and run away from aviation stock too.

            A lot of airlines went bust in that period. Almost none were making profits, and the industry as a whole was losing tens of billions a year.

            What it did do, was to drive some of the crappier companies out of business though. Some of the national carriers were truly terribly run. Belgium virtually went into mourning over the loss of Sabena in 2002. The expats living there missed it rather less. Although the ones who got virtually held hostage by the cabin crew, who refused to let them off their plane for about 5 hours as a protest against the government not bailing them out again, probably had some harsher things to say...

      2. Tom 13

        Re: valued at more than the airline company itself

        Stop me if you've heard this one before:

        Q: Do you know the best way to become a multi-millionaire?

        A: Yes, start with a billion and buy an airline.

    3. Tom 13

      Re: Much tech has lost the plot.

      See, this is why you can't be rich. One sentence does not make a book. You need to go on at length about the history of printing, maybe even discuss the development of writing as the precursor to printing. At least a chapter on the development of movable type. Then move on to lithography. Perhaps dabble for a while on the typewriter before moving to the first ball head printer and pin printer. Meander over into the field of pen plotters then return to the development of the first laser printer.Only THEN will you be properly positioned to begin your discourse on ink jet printers, marketing madness, and the fall of civilization.

      Having done all of this properly you can then hire an agent, work out a deal with a publishing house and print the book. Only to discover that Bezos thinks your book costs too much so your publisher will have to sell it to him at cost or he won't be able to move any copies.

      Have a nice day!

  5. Anonymous Coward
    Anonymous Coward

    "Men have become the tools of their tools" Henry David Thoreau

    Whilst I am not one wit overawed by his credentials (!), Wadhwa makes a lot of sense - except when he is castigating the Yo app. The writer of the article also has some good points to make.

    However, the writer clearly leans to the right of the political spectrum. I do not support rampant capitalism with its blind insistence on finding new markets, no matter what the cost is in human terms.

    However, in the specialised market of apps, it should be the users who dictate what should be developed - if it is of value to them, let's go for it. In this instance Wadhwa is perhaps guilty of snobbism (or maybe inserted the Yo criticism to get himself a wider audience than an academic paper would provide). I would also like to see his evidence for claiming that "Entrepreneurs with world-changing ideas usually have a very hard time gaining funding from venture capitalists"

    1. Destroy All Monsters Silver badge

      Re: "Men have become the tools of their tools" Henry David Thoreau

      However, the writer clearly leans to the right of the political spectrum. I do not support rampant capitalism with its blind insistence on finding new markets, no matter what the cost is in human terms.

      You may want to start to tidy up your space of ideas by recognizing the world is amazingly not sorted along a line with "right" on one side and "left" on the other.

      blind insistence on finding new markets, no matter what the cost is in human terms

      What _is_ the cost in human terms?

      Shades of frankly leftist professors bemoaning the destruction of spiritual values brought about by the industrial revolution. We had it so much better, dying from famine in peasant huts.

      1. Anonymous Coward

        Re: "Men have become the tools of their tools" Henry David Thoreau

        1. "... the world is amazingly not sorted along a line with "right" on one side and "left" on the other"

        > I agree that 'ideas' and 'politics' are a different animals. I was merely suggesting that the text was perhaps coloured by the author's political views.

        2. "What _is_ the cost in human terms?"

        > We'll be here all night debating this one! Everything has a cost of course - Communism, Capitalism and all the other 'isms' :)

        "In the 1970s and 80s, Herman Daly launched a broadside assault on the academic discipline of economics assailing ... its willful blindness to our looming environmental crisis. In pathbreaking and widely influential books and articles Daly as sailed the “stupor of economic discourse” by holding up to his colleagues what he called the “wild facts” of our ecological crisis: the growing hole in the ozone shield, the alarming evidence of rising CO² levels, the shocking rates of natural resource consumption, the frightening rates of extinction and loss of biodiversity and so on which mainstream economists ignored (and most continue to ignore to this day). The ecological crisis is caused, Daly argued by too much growth: “the scale of human activity relative to the biosphere has grown too large” and most especially, by ever-growing consumption in the advanced industrialized countries. ...

        ... corporate CEOs do not have the freedom to choose to produce as much or little as they like, to make the same profits this year as last year. Instead, they face relentless pressure to maximize profits, to make more profits this year than last year (or even last quarter), therefore to maximize sales, therefore to grow quantitatively. So automakers, for example, look to make a profit from every car they sell. They can do this either by increasing the rate of profit on each car they sell by intensifying production -- finding cheaper material inputs, cutting wages to lower labor costs or bringing in more efficient labor-saving technology. But they can’t increase profits forever in this way. Competitors can find the same cheap inputs, the same new technology. And they can’t lower wages below subsistence. So this avenue has limits. Or, they can try to maximize profits extensively - by selling more cars. In practice of course carmakers do both but increasing sales is normally the main avenue of profit maximization because, as Adam Smith noted, returns are theoretically limited only by the extent of the market. So facing saturated markets at home, U.S. car makers look to Asia."

        > I know we are competitive animals but I think it's better to channel this competitiveness into trying to better ourselves as individuals ie self-improvement. Unfortunately capitalism clearly pits us against each other, resulting in losers as well as winners etc.

      2. Anonymous Coward
        Anonymous Coward

        Re: "Men have become the tools of their tools" Henry David Thoreau

        Leftists don't believe in spiritual values, tovarishch, we're all good materialist atheists. It's the Right that bangs on about the importance of religion, stoning women for adultery, soul enters foetus at conception, and so on.

        I agree with your first sentence, but you seem to have forgotten your own remark by the third one.

        1. Anonymous Coward
          Anonymous Coward

          Re: "Men have become the tools of their tools" Henry David Thoreau

          Sorry if I'm a bit slow but I think you are saying that I'm claiming to be a socialist - and then contradicting myself by saying that I'm competitive?

          So then. Is a capitalist necessarily right wing? Do socialists lack competitiveness?

          (Now I've forgotten what I said in my first sentence, LOL!)

    2. Tim Worstal

      Re: "Men have become the tools of their tools" Henry David Thoreau

      "However, the writer clearly leans to the right of the political spectrum."

      Depends what you call "right". It's true that I sometimes foam at the mouth when explaining the joys of free markets. But I'm absolutely uninterested in those traditionally conservative concerns about what other people put into their bodies (either interesting substances or parts of other people's bodies in whatever combination).

      1. Martin 37

        Re: "Men have become the tools of their tools" Henry David Thoreau

        Tim - you should try it some day!

    3. RobHib

      @Mr_Toad - - Re: "Men have become the tools of their tools" Henry David Thoreau

      Mr Toad,

      Perhaps you should acquaint yourself with Mr Thoreau before making pronouncements about his politics.

      I'd suggest you start with Thoreau's Civil Disobedience, it's a very short text. Years ago, I had to study this text for exams, and I must say--appealing to my nature as it did--I actually enjoyed studying it.

      In this age of NSA, GCHQ spying and governments out of control, it seems to me that wheeling out a good dose of Thoreau once again might be just what the doctor ordered.

      You'll note, unlike today's weasel-worded politicians and PR cretins, Thoreau doesn't muck about, he cuts to the core in his very first sentence:

      Civil Disobedience (best)

      or here:

      Civil Disobedience

      or you can even listen to the audio here:

      Civil Disobedience (audio)

      Now, if you're ever feeling you need to get away from things (escape NSA spying etc.), then you could try one of Thoreau's more sedate works, Walden perhaps (I'll let you Google it).

      Thank you for raising my old friend Thoreau, it seems timely we resurrected him once again.

      1. Anonymous Coward
        Anonymous Coward

        Re: @Mr_Toad - - "Men have become the tools of their tools" Henry David Thoreau

        While Thoreau had his good points, we need to remember that when he was going through his Walden phase Mummy still did his laundry. Doonesbury has this aspect nailed.

        1. RobHib

          @ Arnaut the less -- Re: @Mr_Toad - - "Men have become the tools of their tools" Henry David Thoreau

          "Walden phase Mummy still did his laundry"

          Yeah, they say some very unsavoury things about Plato's habits too but we still read him several thousand years later. For example, The Republic is still the first and definitive book on formal argument (the first part that is); the debate between Socrates and Thrasymachus is riveting stuff, and it still never ceases to amaze me.

          So let it be with Thoreau. Read the words in Civil Disobedience and let them speak for themselves. The text's 165 years old but it's uncanny how relevant some of it still is. And that's not just my opinion, the number of Thoreau readers/sites etc. on the net attest to this. Years ago, in part of my training, Civil Disobedience was compulsory.

          Seems it still is, it's long past the flavour of the month and now long-established in the canon, so there's substance there that's past the test of time. (As I've said elsewhere, I've read it again in the last hour or so since I made the post, and for me it's still pretty damn relevant).

      2. Anonymous Coward

        Re: @Mr_Toad - - "Men have become the tools of their tools" Henry David Thoreau

        I wasn't making pronouncements about Thoreau and fail to see the need to justify quoting him in the title. I am already acquainted with his works ie no need to google because I already bought his books (including Walden). *sigh*

        I agree wholeheartedly with your evaluation of his relevance in today's world. Thanks for the links.

      3. RobHib

        @RobHib -- Re: @Mr_Toad - - "Men have become the tools of their tools" Henry David Thoreau

        Since I posed my Thoreau comment several hours ago, I've actually reread Civil Disobedience--it takes about an hour. Well, it's lost nothing for me, it still has the relevance, boldness and frisson as I remembered it from my last reading about five years ago.

        What I continue to find surprising is how relevant much of it is today--and it tells be that not much has changed in our democracy in the last 165 years or so, if anything the ethics are worse today because of slick PR.

        BTW, I found it a pleasant experience following the text and audio together (I combined the first text link and audio, it's very easy to follow that way.)

  6. Destroy All Monsters Silver badge

    We've even some good empirical evidence about the value just of the communications side of mobes. Back when feature phones were still a pretty neat idea, research showed that getting just a standard mobile into the hands of 10 per cent of the population raised GDP growth rates by 0.5 per cent. By 0.5 per cent of GDP, that is, not just increasing the extant growth rate by half a per cent (that's in countries without a landline network, of course).

    Really! I would like to see this. GDP is a notoriously bad number, being manipulated by adding things to it, taking things off it, "forgetting" inflation, aggregating investment and consumption and notoriously counting everything in it that actually goes on the governmental credit card (so will have to be paid for by the kids).

    But yeah, I remember the GSM discussion at the incumbent operator. "Who wants to have a mobile phone? Maybe 0.5% percent of the population... So how is the project with the rollout of the new payphones that accept plastic cards coming?"

    1. Tim Worstal

      Try this search

      "the impact of mobile phones on economic growth in developing countries"

      Second result in Google is a Deloitte paper that looks at 2G to 3G replacement and that's 0.15% on GDP per 10% of population. I've not read the whole paper (it's beer time where I am) but I would expect that it will link back to the original research on 2G.

  7. Anonymous Coward
    Anonymous Coward

    > That’s why they have to resort to crowdfunding websites such as Kickstarter and Indiegogo, appealing directly to the public for investment.

    I was actually more interested in this particular comment.

    I was not convinced as to why he thought that this was particularly a problem.

    It is certainly true that a lot of worthwhile endeavours are being funded via this route.

    It seems to me a far better fit for this kind of thing.

    1. Ken Hagan Gold badge

      "It [Kickstarter] seems to me a far better fit [than traditional VCs] for this kind of thing."

      Do we know that traditional VCs aren't just using Kickstarter to find stuff these days?

  8. Jeff Lewis

    Very first world mindset...

    "The first point to make is that no one can decide what represents value for other people."

    And right there we see the author's bias and error.

    The issue isn't deciding value for other people - it's about basics. I don't care if you personally value food - I assure you, if you don't have any you will die. And then you don't get to make *any* decisions about value. If you don't have electricity - you don't get to value electronics or lights or heck, efficient fridges, which means there's all sorts of food you don't get to value.

    If you don't have education, regardless of the quality of it, you won't have knowledge to help decide the value of things.

    The notion that everything is 'valueless until someone decides what value it has' is a very American and capitialist centric mindset. In reality, it doesn't take much thought to show that there's a concept of 'infrastructure' - dreary, basic things you must have before you can get to the fun stuff. These tend to also be things we seriously undervalue because they ARE infrastructure. We in the West, for example, don't think awater or electricity is really that valuable.. until there's an outage - THEN we remember why it's valuable.

    The fellow quoted is making this point: we are terrible at valuing things relative to their actual impact. We overvalue stupid, wasteful things - but undervalue the basics that we literally cannot live without. And worse, people like this article's author *encourage* that kind of stupid thinking.

    1. Paul Hovnanian Silver badge

      Re: Very first world mindset...

      "The fellow quoted is making this point: we are terrible at valuing things relative to their actual impact. We overvalue stupid, wasteful things - but undervalue the basics that we literally cannot live without."

      The problem is assigning value to those things for the purpose of allocating resources. The western capitalist world uses price as a proxy for value. No one person or committee has the accumulated knowledge to do the allocation problem by themselves*. So we let the mechanism of the market take care of it. Its a rotten system, I know. But not as rotten as all the rest. But we don't want to go there. Because wealth disparities guarantee that the allocation for basic needs will not be viewed as being equitable across differing cultures. And the right to differ in beliefs is central to what most people regard as a human right.

      *Examples of those that tried the central planning scheme appear to have failed miserably.

      1. strum

        Re: Very first world mindset...

        >No one person or committee has the accumulated knowledge to do the allocation problem by themselves

        Governments have been doing it for centuries. They don't always do it well, but they do it - and, generally, they do it better than the whims of moneyed loafers.

        We have fire brigades because governments decided we needed them - that insurance company brigades just weren't working.

        We have public roads because every toll road company of the 18th/19th century failed.

        1. I ain't Spartacus Gold badge

          Re: Very first world mindset...

          generally, they do it better than the whims of moneyed loafers.


          This is where you're allowing your prejudice to interfere with your reasoning. The market isn't controlled by moneyed loafers. It's controlled by no-one. But influenced by everyone. If you like, every £1 used is a vote for what the country is going to do with its resources. So the more money you control, the more 'votes' you get. But there's an awful lot of people and organisations out there disagreeing with you.

          So it's possible to corner sections of the market, and say become a monopoly in displaying adverts with online search results, but it's much harder to control how many sandwiches are produced, or cars or what-have-you.

          Also, very few people (even on the right of politics) seriously doubt that governments are great at things like fire brigades. Anyone who says you can have a well functioning market economy without government is an idiot, and to be ignored. You need a legal system in order to have property rights. You also need someone to whack monopolies on the head occasionally. It's much more efficient to force everyone to buy fire insurance from one central provider - so you may as well add it to tax and let the government do it.

          Like capitalism, governments can be absolutely rubbish at getting stuff done efficiently. It's just that we've not found any better alternatives yet.

          Governments are there because someone's got to be in charge. And in democracies they're also supposed to try and do a better job of balancing different goups' interests against each other - and maybe even make life better.

          They're very good at doing things that people want, but can't afford individually, or that it's not possible to make a profit doing. But they're not so great when they try to make cars.

    2. I ain't Spartacus Gold badge

      Re: Very first world mindset...

      Jeff Lewis,

      I value my basic services highly. Such that I spend somewhere between £1,500 and £2,000 on water, leccy and interwebs alone. That's far more than I spend on anything else except my mortgage. And taxes, so healthcare, roads etc. My next biggest bill is food. If any of those bills suddenly go up, then my spending in other areas will drop accordingly, in order to cover the difference.

      No-one I'm aware of has come up with any better approximation of value than price. I rmember when I started studying economics being introduces to the util. A measure of the utility that something provides to an individual or society. As soon as you start to look at this, you see the difficulty of trying to come up with a true 'value' for anything.

      We might value firefighters higher than road maintenance workers. I believe they're paid more. And seen as more 'heroic'. Yet I've never personally benefited from the services of a firefighter. But have used many roads. They're probably reasonably similar skill levels (at entry level) and amounts of physical effort and unsocial hours. Road maintenance is far more dangerous than putting out fires too. Obviously if I'm on fire, I'm going to really value the fire service very highly indeed.

      It's basically impossible. Partly because almost no-one willl agree with anyone else on how they'd value stuff. So you have to work in the aggregate.

      There is a market that very crudely attempts to work out what price my labour is worth. It's highly imperfect, but it is a two-way street. Sure, the market mostly imposes a salary on what I do, but I don't have to take that salary. I could take less, for a different job I found better in some way, or go and get training to do a more highly paid one. Or decide the market was totally undervaluing my skills, and set up my own company to try and keep more of the value for myself.

      The same applies to goods. A whole bunch of people collectively decide whether to buy or not, at a given price, and prices tend to move around to get the most profit they can manage. Either by selling lots cheap, or few expensively (or somewhere in between).

      Until governments are able to read minds, and have sufficient super-computing power to assign the 'corrrect' values to everything, we're basically stuck with markets. Particularly as we don't have any good theories as to how to assign any of these values to people, or how they interact. Thus imperfect markets assigning resources by trial-and-error is what we've got.

  9. rizb

    I'll take your quote and raise you...

    "Well, at heart, it puts the accumulated wisdom of mankind into the pocket of every landless labourer around the globe. Which, if we're accurate in our assessment that knowledge diffusion is what creates economic growth, means that we've pretty much cracked that particular problem."

    Okay, I riposte with:

    Otto West: Apes don't read philosophy.

    Wanda: Yes they do, Otto. They just don't understand it.

    1. This post has been deleted by its author

      1. Ken Hagan Gold badge

        Re: I'll take your quote and raise you...

        "The transatlantic cable from England to Australia was a huge project at the time"

        Sounds a little mis-guided to me.

        1. Anonymous Coward

          Re: I'll take your quote and raise you...

          Yeah, sorry, incorrect.

          When a fisherman can phone ahead and find what prices his fish are fetching at the different harbours, when a goatherd can find out what goats are selling for right now in the nearest big market town, and when a coffee bean grower can get on the phone to a buyer and short circuit a network of parasitic middlemen, even an ape can find the motivation to understand philosophy.

          The transatlantic telegraph cable from England to Australia was a huge project at the time, but the commercial justification was that it put the wool growers and the metal miners in direct contact with the exchanges in London.

          1. Tim Worstal

            Re: I'll take your quote and raise you...

            The fishermen story:


            "This more efficient market benefited everyone. Fishermen's profits rose by 8% on average and consumer prices fell by 4% on average. Higher profits meant the phones typically paid for themselves within two months. And the benefits are enduring, rather than one-off. All of this, says Mr Jensen, shows the importance of the free flow of information to ensure that markets work efficiently. “Information makes markets work, and markets improve welfare,” he concludes."

            What happened when sardine fishermen off Kerala got mobile phones.

            1. rizb

              Re: I'll take your quote and raise you...

              Okay but but surely Smith's (and Marx's) work on wealth creation falls flat if you remove a layer that is creating wealth - ie, the middlemen.

              1. I ain't Spartacus Gold badge

                Re: I'll take your quote and raise you...


                You don't remove the middle-men. No-one pops round to kill them all, now they're no longer needed. You get them doing something else. At least in theory. The market is operating more efficiently, by doing the same thing (bringing fish to market) with fewer people. This is good for everyone else, but bad for those people who get elbowed out.

                But in a growing economy, maybe they'll find some other opportunity. One that isn't so inefficient. If that's the case, then it's a net gain to the economy, as you've now got more things being done with the same number of people. Then everyone wins. Everyone is now richer, and can afford more services from each other, in a virtuous cycle.

                There's aslo a mechanism to help this happen. Our middle-men were taking profits from the fishermen. They're no longer doing that, and are out of work. But co-incidentally the fishermen now have much more cash. Even the fish buyers have more disposable income, as fish prices have dropped. All this cash is looking for some goods or services. So instead of taking the money off the fishermen for selling their fish to people who'd buy it already, perhaps our middlemen can sell something to the fishermen.

      2. Adrian 4

        Re: I'll take your quote and raise you...

        Aren't the exchanges the parasitic middlemen ? The hint's in the name : they don't want the commodities, they just want trade & skim them.

        1. Anonymous Coward
          Anonymous Coward

          Re: I'll take your quote and raise you...

          Sorry, I was writing about two separate things.

          In the goatherd and coffee grower cases, without mobile phones they are selling to middlemen who know what prices apply in the large markets and can get low prices from the producers by lying in the absence of price transparency. In coffee and cocoa in particular there can be many middlemen in the chain.

          In the case of Australian wool, the telegraph gave direct access to the futures market, allowing the producers to make transactions which guaranteed them enough income to take the financial risk of growing and shipping.

          With a nod to T Worsthal, the use of the telegraph, and now the mobile phone, gave a freer market with greater transparency which, in this case, benefits producers and buyers at the expense of intermediaries. Having one efficient exchange is a lower cost of business than having lots of inefficient and corrupt ones.

  10. Will Godfrey Silver badge

    Telling people they're doing it wrong is never going to fly.

    Doing it right yourself (by way of an example) might get a response.

    Then again, it might not.

    Then yet again, the response might be attacks from people who see you as a threat to their profits.

  11. Anonymous Coward
    Anonymous Coward

    Left and right

    "You may want to start to tidy up your space of ideas by recognizing the world is amazingly not sorted along a line with 'right' on one side and 'left' on the other."

    But it is! (By a plane rather than a line, though. The sagittal one, to be precise.)

    OK; you also have "front" and "behind", and "above" and "below", but they are orthogonal.

  12. John Savard


    Yes, other people can't decide that the Yo app doesn't have value to the people who bought it.

    However, clean water and adequate food have value to the people who don't have them. I'm quite confident that I'm not making a mistaken judgment in saying that.

    What the problem is, of course, is that those people don't have the money to pay for those things. And even if it is preferable that they have the means to earn the money they need, clearly redistribution of some sort is needed to start the change happening at a faster pace than it is currently happening without interference.

    Why should the free market be immune to criticism when it fails to deliver a desired result? The fact that the legitimate criticism is that it's a screwdriver and not a hammer, that is, that it's the wrong tool for the job rather than a tool that needs to be improved to do what it's supposed to do better, doesn't mean that all criticism is unfair.

    Unless, of course, if one believes that feeding the hungry - and getting results quicker than current rates of charitable donation are doing - and so on are not legitimate goals.

    1. I ain't Spartacus Gold badge

      Re: Value

      Is there another tool to do the job you want hough?

      Sure, we have the infrastructure and resources to feed tens of millions of people. Probably hundreds of millions. But if we can't find a way to run a planned economy for ourselves, how are we going to be any better at doing it for them?

      For example, you really can't have a market economy without property rights. There's no incentive to invest for the long term, if some bugger in government can come along and steal your business whenever he fancies. For property rights you need stability. And some kind of rule of law. And concept that political power has limits that aren't to be crossed. That doesn't need democracry, thogh it helps.

      So are we going to bomb their governments to democracy? Are we going to work through their existing governments in the hope they'll play nice and suddenly become responsible and caring. Rather than say nicking 20% of the aid money and funnelling it to Switzerland? What when that government uses the aid as political patronage to maintain its power to do just whatever the hell it likes?

      The Greeks had a first world economy 5 years ago. But by a combination of lying, stupidity, greed, joining the disastrous Euro and giving out something horrendous like 20-30% of government spending in patronage (sinecure jobs for votes) - they are now well and truly fucked. By some measures they're back in the list of developing economies now.

      Short of taking over countries, and running them as some kind of enlightened despotic empire of goodness, this just ain't going to happen.

      So the market is what we've got. We should subsidise our farming less, in order to give developing countries a chance to trade fairly with us in products they can compete on. Then they get richer, and we also get richer. Channelling some cash into supporting our farmers in other ways. This has the benefit of both being moral and good for almost everyone. And we already spend huge amounts in tax to subsidise farming, so there's nothing to stop us spending that on making sure our farmers don't lose out. Everyone wins. And we help developing countries in a way that isn't charity, so they get to make their own choices about how to live their lives.

  13. cortland


    And movable type were the tipping point for a wider spread of information and the end of church monopoly on what's in its bible. We've been waiting for the Net to go supersonic and maybe we are seeing it accelerating. How long will it be before the education that has been a guild monopoly (look at their robes) is available to everyone? Free!

    The currency of physical trade is standards of living. THIS sea change will end with no one in Africa disconnected from the Net -- and everyone in Afghanistan allowed to use it.

  14. Anonymous Coward
    Anonymous Coward

    'The two most important and vital functions for growth are that people know what can be done and are able how find out how to do it.'

    These are important, but the third which is even more so is the environment in which those people operate.

    If you live in North Korea (as the most extreme example to illustrate) then knowing that something is possible and finding out how to do it is likely to get you and your extended family a short trip to a forced labour camp.

    Likewise for many of the really important things that developing countries lack there is usually a deeper reason that goes beyond mere lack of domain expertise. The best case scenario is that capital resources are scarce and infrastructure too poor to make a desalination plant (for instance) possible to build and maintain as an economically viable concern. The worst case scenario is that political instability or vested interests actively oppose change that would drive macro growth but threaten local power structures. That happens all over the world, but power is less evenly distributed in developing countries and so breaking barriers can be harder.

    I think one of the big things that people learn on growing up is that a lot of the world's problems are well understood and straightforward to fix from a technical and process perspective but are unsolvable for political reasons.

    The same applies at companies. We can all name at least 10 problems at the company we work for that would be easy to fix, but none of us want to get ostracised or fired for raising them and stepping on the toes of someone more senior.

  15. John Tserkezis

    "So is there any value in the Yo app? It took just eight hours to code but, when the story broke, it had 50,000 users – which would indicate that there is."

    No, it doesn't indicate value at all: It merely indicates there were 50,000 idiots who signed up.

  16. Anonymous Coward

    An even more useful app?

    "A new iPhone app called WineGlass is poised to change the way wine drinkers order wine in restaurants. Partnering with CellarTracker, the online database of wine prices and opinions, WineGlass helps both the clueless and the semi-knowledgeable pick an appropriate wine.

    No more calling a hotline or a savvy friend to ask, in a hushed voice, which white Burgundy you should order. All you have to do is make like a spy and photograph the wine list with your iPhone. WineGlass will provide crowd-sourced descriptions and assessments of almost every bottle, complete with a score on a 100-point system and the average range of prices for that wine in a restaurant."

    Full article - Los Angeles Times (by S. Irene Virbila)

    1. I ain't Spartacus Gold badge

      Re: An even more useful app?

      It'll still be random what you end up with. Wine experts are notoriously crap in blind taste tests. Giving completely different reviews when served the same wine twice in one tasting.

      Having looked at some of the comments on Ocado's site, while buying a few bottles with a voucher the other day - they were even less helpful.

      When in doubt, my current rule is to cheer for Chile. I've had one bottle of Chilean wine that wasn't nice, and that was only disappointing, not horrible.

      The nice thing is that almost everyone tells you what grapes they're using nowadays. Even the french have started using it, so you don't need to learn all the different terroirs. Which makes for a lot less to learn than previously. And has the welcome side-effect of annoying the french...

  17. kurkosdr

    Why should Silicon Valley care about the 2 billion additional people the natalists brought to the world just because their religion says so, knowing beforehand they don't have the resources to feed so many children?

    Phrases like "there are X billion people without Y" are encouraging the natalists. It's subconsiously imposing the ethical imperative that parental responsibility should be "shared" globally, as if the world is one giant family.

    Oh, and by "natalists", I mean all of them. Sunni Islamists, Quiverfull Chrisitans, whatever natalist movement Buddists have, everyone.

  18. Anonymous Coward
    Anonymous Coward


    "The first point to make is that no one can decide what represents value for other people."

    Wrong. What one can not do is decide what other people will like. That's different.

    Deciding what represents value is something that we all gain from experience - it's the bedrock of good parenting - and some people have a lot less experience than others. That's why older people are more cynical: they've probably already seen this crap before.

    It's not fool-proof and experience can mislead us when faced with the genuinely new, but judging value is something we should all be getting better at every day of our lives.

  19. John Smith 19 Gold badge

    X % of mobiles in population -->Y increase in GDP?

    Correlation <> causation.

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