Tuesday, 23 February 2010

Hardware versus Content

Hardware versus Content.

This computer I’m using was designed in the United States, I’m in England. I think the CPU was made in the USA; but the computer was made in the Far East; my new keyboard came from Japan. Inside it there are programs running or software and they produce and use data. This is the content. Most of the content was produced in the United States and some of the content I produced myself. Including what I’m writing now! I have a digital picture frame; it’s another piece of hardware. The content, the photographs, I produced; it plays MP3’s they were produced throughout the Western world. I also have other hardware; a printer, scanner and copier. That has no content until hooked up to a computer or I put a photograph or document on to copy. Again the hardware was produced in the Far East and the content tends to be produced in the West. My television and digital boxes were produced in the Far East and they don’t contain content, the content is streamed digitally from a transmitter. The same applies, the hardware produced in the East and most of the content in the West. The same applies to my MP3 player and my stereo, hardware was produced in the East; the content was produced in the West.

There appears to be a balance of trade problem between East and West and this is putting the world in financial difficulties. What is the answer? Is it to produce more hardware in the West or stop importing it from the East? When France had a balance of trade problem many years ago, rather than restricting imports, it applied safety restrictions on electrical goods being imported. That curbed imports a little. There is a case for quality control on imports from East to West. My laptop is four years old; so far I have bought a new power supply, which has a design fault. I have bought a new battery; they don’t last long anyway. I have also bought a new keyboard and had that fitted and a new CPU! So quality inspections on imports could be done. But that would be expensive and time consuming. Perhaps an agreement on changes in the laws of European countries and North American companies requiring electronic and electrical goods to have a five year warranty on them would work? It would make goods more expensive the research and development would have to be more extensive. It would also cut manufacturing in the long term, globally. That would be a good thing for the environment.

Can the West produce more content that is moneterized and sell it to the East? Certainly popular music is popular with the young in the East and that is mainly produced in the West. Can we get Britney Spears to sing in Chinese? Other content includes art, the written word and video. Can we produce more and better quality not just for consumption in the West but globally? When will we see 3D art galleries online? Will EBook readers see an explosion of new authors bringing their talents to the market place? Will digital video see an expansion o the movie and television industry to serve everyone with better quality drama?

Economies are like pyramids with the wealthy at the top and the poor at the bottom. Money tends to flow up the pyramid and so the more money at the bottom, the better off everyone is! The poor are better off, the middle income earners are better off and the rich make more money because they are invested in the companies serving people lower down in the pyramid! If we have minimum wages employers complain it will put them out of business! The minimum wage however applies to their competitors as well. A minimum wage does however require everyone to accept a differential between pay different skills get to be smaller. This is a problem skilled people find hard to accept when unskilled people are earning nearly as much as they are. So a minimum wage must require all wages to increase a little. This can be done by increased productivity and efficiency though and so make a lot of sense.

We live in a global economy and the people who are really at the bottom of the pyramid are in third world countries and we have to be prepared to pay more for goods from third world countries and they must introduce statutory minimum wages.

More can be done to increase efficiency. The British foreign office funds the BBC World Service delivering radio in many languages and satellite television to many in the third world. In the UK, BBC television is funded by an army of bureaucrats who administer a television license system and people have to have a license even to watch commercial television funded by advertising. This is plainly inefficient and ridiculous. They produce content but of no value. It isn’t worth any money, it just costs people money. The same principle can be applied to other needless licenses like the one we have for cars. My car will run just fine without one! Scrap the licenses and add a little to the cost of fuel, very simple and less worthless content being produced. It is the ratio of content that has monetary value in Western society to the amount of content produced by bureaucrats with no monetary value that is a problem. If we increase the ratio of monetary content to bureaucratic content we would see monetary growth.

We also need to increase the growth of content to hardware. The growth of what we produce in the West to the hardware being produced in the East. Even if it does mean Britney Spears has to sing in Chinese! We can do a lot to improve our production of content, make more opportunities so the top of the pyramid gets a little fatter. Britney Spears may not make so much money with a little more competition, but she will still do alright; the Chinese market is vast!

We have to look at what is holding back people with talent, writers, artists, singers, actors, film makers. What’s wrong? Part of the problems is a pyramid culture, where you are no one unless you are at the top! The tax system and housing system also discriminates against people at the bottom of the pyramid. Education and training too needs to be improved and people encouraged to save money. At the time of writing the Bank of England base rate is 0.5% to help business! The base rate is less than the rate of inflation and so in theory businesses are getting loans subsidised by the savers! That is the economics of the insane! If young people could save and invest in their own futures then they could produce more content, music, art, the written word and we could have a true cultural revolution. The people at the bottom of the pyramid get richer and the economy grows and content doesn’t use much in the way of natural resources like producing hardware does. It is much better for the environment and couple that with a five year warranty imposed by law on hardware and we see a big economic shift. Money would not just flow up the pyramid, but laterally across the pyramid. Everyone rich, middle and poor would benefit and at very little cost to the environment; in fact with hardware being replaced less the environment would benefit. There would be a side effect though; the East would also start producing content to make up for the loss of hardware production. We already have rising Chinese and Japanese pop stars though; it’s inevitable as having a Chinese restaurant in your city. It enriches your culture. I am of course proposing change and older people in particular and people who are doing nicely by sticking to the status quo will always oppose change. The wealthy at the top of the pyramid will be afraid of losing their wealth. They may not have figured out that the government with its quantitative easing programme is eroding the money that have anyway. The hardware produces may complain as it means them designing goods to last to conform to a five year warranty. The makers of raw materials may suffer. The energy producers will complain, but fossil fuel resources are running out anyway. The educators and trainers may complain as they may have to teach enterprise and entrepreneurship. What do educators know of such things? The bureaucrats will complain the loudest and as politicians are perceived as producing nothing but hot air they won’t like change either. But change would benefit British politicians, when there is a major vote in the House of Commons everyone could get a seat instead of many MPs having to stand. That would mean less MPs though and who would go? So we have another problem. If it doesn’t satisfy politicians and people at the top of the pyramid to change and they have all the power; will we ever see change?