Archive for the ‘Economics’ Category

Can there ever be a “Cohesive Global Web”?   no comments

Posted at 10:17 pm in Economics,Uncategorized

Researcher: Jo Munson
Title: Can there ever be a “Cohesive Global Web”?
Disciplines: Economics, Ethnography (Cultural Anthropology)

Is now the time for a transparency and global cooperation on the web?

Can there ever be a “cohesive global web”?

The web is more a social creation than a technical one. I designed it for a social effect ‚ÄĒ to help people work together ‚ÄĒ and not as a technical toy. The ultimate goal of the Web is to support and improve our weblike existence in the world. We clump into families, associations, and companies. We develop trust across the miles and distrust around the corner.

A hopeful inditement of the web’s potential from the “father of the web”, Sir Tim Berners Lee (Tim BL), but unfortunately, we are developing mistrust on the web. Whether or not it was the intention of Tim BL and other pioneers of the internet and the web, the power over the infrastructure and development of the web has long been routed in the Western English speaking world.

As the rest of the world has begun to engage with, depend upon and contribute to the web, the US/UK-centric view of the web is being challenged. This distrust for a web where 80% of web traffic is passed through US servers is not limited to the likes of the ever elusive and separatist nations such as North Korea, but by some of the largest economies in the world. Brazil’s President Dilma Rousseff voiced her dismay at the NSA’s “miuse” of the web to spy on her private email and correspondence and duly threatened to install Fibre-optic submarine cables that link Brazil directly with Europe, bypassing the current connection via a single building in Miami. German, Mexican and French leaders are also outraged by being victims of the NSA’s “snooping”.

The world’s second largest economy, China, has long dissociated itself from the outside web and US ogliopolistic companies such as Facebook and Twitter, through the implementation of its “Great Fire Wall”. Whilst on the one hand Westerners may view such measures as restrictive, perhaps there is a protective element to such actions that in retrospect, we too may have aspired to.

Discontinuity in global web use is often far less politically motivated and often evades our press. It may shock you to know that Google is not the search engine of choice in some of the world’s most technologically advanced nations. This reaslisation leads me to wonder how other cultures use the web, how can the web work better for them? is the web fit for purpose to move into frontier nations where literacy is far from universal and the concerns rather more fundamental than a 140-character regurgitation of our lunch can cater for?

Why would we want a cohesive global web anyway?

I believe that for the web to establish harmony and be “fit for purpose” as it expands and develops into a global phenomenon, it will have to become more representative of its diverse user base. It seems to me that there are a great deal of reasons why having a cohesive centrally governed (or at least cooperatively governed) web would benefit global society, examples include:

  • Economic growth / stability
  • Social & political stability
  • A more diverse pool of ideas / talent for invention and innovation
  • Increased collaboration across nations
  • Increased tolerance of other cultures
  • Improved security & safety
  • Improved use as a tool to combat poverty
  • Improved cross-cultural communication

However, the world has had a fractious history – is it therefore too much to hope that the web could transcend our propensity to be territorial and militant? What else might the web be destined for if it cannot sit comfortably within a global society?

The aim of my report will be to assess how two distinct disciplines would approach the feasibility of a "cohesive global web" and how they might come together to approach the problem from a multidisciplinary perspective. I have chosen the following disciplines for my review:

  • Economics – primarily because I believe that Economics can be seen in a wealth of our current usage and the “cost benefit” argument seems to play a big role in whether we choose to collaborate / engage with a concept.
  • Ethnography (Cultural Anthropology) – because I believe we will only make progress with the concept of a cohesive global web by moving away from our Anglo-centric view and observing the thoughts and experiences of other cultures.

Next steps…

My understanding of both fields is currently na√Įve at best, so I am excited to discover how the two fields will affect my perspective, and how they will come together to form a research methodology for looking at the future cohesiveness of the web. In the next week I will be compiling a to do list for the remainder of the semester and beginning to delve into my disciplines of choice.

Sources

Nytimes.com. 2013. Log In – The New York Times. [online] Available at: http://www.nytimes.com/2013/10/14/business/international/google-jousts-with-south-koreas-piecemeal-internet-rules.html?_r=0 [Accessed: 23 Oct 2013]

The Verge. 2013. Cutting the cord: Brazil’s bold plan to combat the NSA. [online] Available at: http://www.theverge.com/2013/9/25/4769534/brazil-to-build-internet-cable-to-avoid-us-nsa-spying [Accessed: 23 Oct 2013]

Heine, J. 2013. Beyond the Brazil-U.S spat. [online] Available at: http://www.thehindu.com/opinion/op-ed/beyond-the-brazilus-spat/article5186893.ece [Accessed: 23 Oct 2013]

Illustration: Gade, S. Retrieved from: http://www.thehindu.com/opinion/op-ed/beyond-the-brazilus-spat/article5186893.ece

Written by Joanna Munson on October 23rd, 2013

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Web Doomsday: What Will Happen if The Web Just Disappeared?   no comments

Posted at 3:01 pm in Economics

On an evening two weeks ago, a power-cut in Southampton plunged the city into darkness. As much of the city’s buildings lost power, people started wandering out onto the streets. Despite the power cut lasting no longer than 30 minutes, there was a faint air of panic as everyone was reminded of how much they have come to be dependent on electricity. I was one of them – living in a modern flat, no electricity means no lighting, no cooking facilities and no running water – the basic amenities of modern life.

But I was also reminded that the Web is just as vulnerable. Much like electricity, the web has become something we are dependent on. And like electricity, the complex infrastructure that delivers Internet to our homes is prone to disruption through countless ways. The Southampton power-cut was caused the failure of a single substation. Likewise, the failure of a single point on the Internet infrastructure can cause huge disruption. The reasons may be accidental or malicious.

320px-2003_New_York_City_blackout

Above: People walk the streets of New York during the 2003 blackout. It was caused by a software bug and affected 55 million people, lasting almost a day for some and over two for others.

So over the next few weeks, I am going to consider what might happen if the web were to disappear. Given that there is still over half the world’s population to start using the Web, it seems an appropriate time to why this is and whether this impacts their lives. For example, the widespread political issues surrounding web availability, such as restrictive firewalls and censorship, could provide insight into how loss of access to the Web affects us already.

Literature in Social Anthropology can tell us how humans have historically dealt with loss of perceived necessities, whether it be wartime rationing or survival during and after natural disasters. Perhaps this can help us prepare for a disaster that leads to the loss of the web. And if we did lose the Web, what would the impact be? Modern civilisation is governed through Economics, which, considering how the Web has become a platform for economic prosperity, could be one of the most affected areas.

The uptake of the web is not stopping any time soon, and the loss of the web could be detrimental to a future society. Now is an important time to get a better understanding of what the consequences of loosing the web would be.

Written by Peter West on October 14th, 2013

“Is it safe to drink the water?”   no comments

Posted at 4:00 pm in Economics

SusanSermonetaMatchesCrop

How many people carry matches these days?/Susan Sermoneta ©2012/CC BY 2.0

Question
How can corporations be encouraged to open their data (so that we know it’s safe to drink the water)?

Background
The benefits to corporations of opening their data is well documented, but they are not necessarily appreciated in all sectors of industry.

Prospecting for oil and gas with the aim of engaging in hydraulic fracturing¬†(‘fracking’) operations causes some popular concern¬†which could be alleviated by the more open availability of real-time monitoring data.

In the UK, all industrial activities are subject to health and safety audits and some involve continuous, around the clock monitoring. For example Cuadrilla Resources employ Ground Gas Solutions to provide 24 hour monitoring of their explorations in the UK. Ground Gas Solutions monitoring aim to:

provide confidence to regulators, local communities and interested third parties that no environmental damage has occurred. (GGS, 2013)

Currently the data collected through this monitoring is made public via reports to regulation authorities, which can be subject to significant delay, are often written in technical language, and are not easily accessed by the general public.

My argument is that real time (or close to real time) monitoring data could be made open without any damage to the commercial advantage of the companies involved, and, if clearly and unambiguously presented (e.g. via a mobile app), could go some way to alleviating public concerns, particularly regarding the possible contamination of drinking water. Exploring what motivates some corporations to make their data open and the challenges they have overcome to do this, may suggest successful strategies for encouraging proactive, open behaviour within industry.

Disciplines
Anthropology –¬†Considers key aspects of social life – identity, culture, rationality, ethnicity and belief systems.

Anthropologists aim to achieve a richness in the description of encounters they have with people and places, and have a strong tradition of creating narratives and developing theories that describe and  attempt to explain human behaviour. In the context of the exploration industry, how might an anthropologist explore the underlying cultural values and prevalent beliefs of people working within corporations?

I believe that exploring this issue through the lens of anthropology would provide some insight into the workings of the energy exploration business and uncover useful data that may indicate strategies for encouraging corporations to share real time monitoring data.

Economics –¬†Analyses the production, distribution, and consumption of goods and services.

The widespread use of empirical data related to economic exchange together with emerging theories of human behaviour appear to underpin this discipline, which I believe have significant value to the study of my question. Exploring the commercial incentives for opening real time monitoring data from the perspective of differing economic theories combined with the data collection methodologies prevalent within this discipline can provide useful understandings of the question, which may point to practical solutions.

Anthropological Economics: an interdisciplinary approach
The question: “How can corporations be encouraged to open their data?” appears to call for solutions that tackle not simply the “bottom line” of economic necessity, but also the culture that requires individuals within corporations to maintain secrecy in order to maintain or improve their employers market position.¬†From my current naive standpoint, a combination of the anthropologists qualitative, narrative-driven approach to studying human behaviour with the economists quantitative, theory-dominated view of commercial interaction looks like a worthwhile approach to gaining a better understanding of the key issues.

Proposed reading list
Anthropology:
Eriksen, T. H., 2004. What is Anthropology? London: Pluto Press.
Eriksen, T. H., 2001. Small Places, Large Issues: An Introduction to Social and Cultural Anthropology. London: Pluto Press.
Fife, W., 2005. Doing Fieldwork. Basingstoke, UK: Palgrave Macmillan.
Miller, D. ed., 1995. Acknowledging Consumption. London: Routledge.

Economics:
Fogel, R. W., Fogel, E. M., Guglielmo, M. and Grotte, N., 2013. Political Arithmetic : Simon Kuznets and the Empirical Tradition in Economics. Chicago: University of Chicago Press.
Giudici, P. and Figini, S., 2009. Applied Data Mining for Business and Industry. London: Wiley.
Isaac, R. M. and Norton, D. A., 2011. Research in Experimental Economics: Experiments on Energy, The Environment, and Sustainability Governance in the Business Environment. Bingley, UK: Emerald Group Publishing.
Quiggin, J., 2011. Zombie Economics: How Dead Ideas Still Walk Among Us. Woodstock: Princeton University Press.

Written by Tim O'Riordan on October 13th, 2013

Tagged with , , ,

Economics, Models and Data.   no comments

Posted at 11:43 am in Economics,Uncategorized

Economic theories are constructed using models and data.  Models can be described as frameworks which organise how economists think about a problem.  Models create a simplified and easier to manage reality with which to test theories.  Data is the facts with which the model interacts, therefore the data needs to be relevant.

Data can be;

  1. Time series Рwhich shows how a variable has changed over time.  This is usually graphically represented.
  2. Cross sectional – shows a fixed point in time how a variable differs between groups or individuals.

Data is represented as;

  1. Index numbers Рthis allows the comparison of data without using units and showing any change relative to a base number.  Indexes can also be expressed as averages.
  2. Nominal or real variables Рnominal values show the price of things, whereas real values show the price of things taking into account the factors which may influence the price.  For instance, a nominal value may have increased, but a real value would show the increase was due to rising labour costs and there was not an increase at all.

Economic models use empirical research to examine the realtionship of interest. 

Therefore economists;

  1. Construct a theory
  2. Develop a model to test the theory
  3. Test the theory with data

Written by Abby Whitmarsh on November 5th, 2012

Blog Week 2   no comments

Posted at 12:01 pm in Economics,Uncategorized

A very heavy book

My reading for this module this week has been the incredibly weighty tome ‚Äúeconomics‚ÄĚ, 1994 4th edition by D. Begg, S. Fischer and R . Dornbusch, ¬†published by McGraw-Hill Book Company in Maidenhead.¬† It is a very easy to read, entry level book which explains economics in a simplified and an advanced version.¬† I stuck with the simplified version.

Economics is the study of human behaviour with the central issue facing economists being the almost limitless desire for goods and services when the resources the same goods and services depend upon maybe scarce.   Economics studies how society decides which commodities to produce above another.Economics can be split into two areas, microeconomics and macroeconomics, which represent the differing methodologies at play within the field of economics.  Microeconomics focuses on individual economic transactions about specific commodities whereas macroeconomics studies the interactions in the economy as a whole.

A researcher in the field of microeconomics would concentrate their research into why certain people purchase a certain item and then use the data they have collected to extrapolate a theory of human behaviour which can be applied to the general population.  One critique that can be levelled at microeconomists is their simplicity allows them to ignore the wider picture.   Indirect effects can heavily influence an economic decision. 

Macroeconomists concern themselves with the economy as a whole.  The analysis they undertake tends to focus on GDP, inflation and the labour force.  They are more likely to concern themselves with how government policy is affecting the economy. 

Economies are not the same for each country.  There are three different types of economies, firstly, the command economy.  The command economy is a term used to describe when a central office makes all economic decisions.  Secondly, the free market economy.  This term is used to describe a situation where no one is intervening in the market and individuals pursue their own self interests.  Despite the lack of regulation it is posited that a invisible hand would guide the market.  Lastly, the mixed economy.  A mixed economy is one which is a blend of the command economy and the free market economy.  Mainly the economy is allowed to follow a free market style but government regulation is needed in certain areas.  This is the type of economy which we currently experience in the United Kingdom.

The study of economics can be undertaken for two reasons.  It may explain why things have happened or it may seek to explain what should happen.  The first type of economic study is called positive economics and the second type is called normative economics.  Normative economics is open to subjective value judgments, whereas in positive economics researchers are likely to come to the same conclusions.

Next week I will blog about how to undertake economic analysis and the methodologies involved.

Written by Abby Whitmarsh on October 26th, 2012

Geography, Economics and Digital Piracy.   no comments

Posted at 4:37 pm in Economics

For this interdisciplinary review module I will be attempting to apply the key theories of geography and economics to the web issue of digital piracy.

In order to being this project I started with geography and a book called ‚ÄúKey Methods in Geography‚ÄĚ, 2nd edition, edited by Clifford, French and Valentine.¬† On first reading the introductory chapter was very reassuring and outlined research methods that I was already familiar with from applied social science.¬† Research can be quantitative or qualitative and seems to be split between physical and virtual geographies.¬† Virtual geographies would seem to be a mix of psychology and anthropology and may or may not relate to the physical world.

Quantitative research would appear to relate to positivism and suggests a very traditional scientific methodology, whereas as qualitative research recognises that human behaviour is messy and humans do not always follow the rules.  Other critiques of positivism in geography include Marxist geographers who suggest that capitalism is reproduced in positivism; post-structuralist and feminists geographers would critique both positivist and Marxist geographers for failing to acknowledge multiple realities.  A Humanistic approach to geography would take into account representations in popular culture.

However, these approaches are not polar opposites and can be combined.

Geographical research can also be regarded in terms of extensive or intensive.  Extensive deals with large data sets and looks for patterns and regularity, whereas intensive studies small or single case studies.  Time and cost often have implications on which type of research is undertaken and extensive research often uses secondary data sets.

This reading has been mainly detailing different methodologies for use in geographical research and I need to undertake some research into theories and principles in geography.

Written by Abby Whitmarsh on October 17th, 2012

Intro to economics   no comments

Posted at 4:45 pm in Economics

Having initially planned to research Economics and Sociology, I have now decided to change tack a little bit. I’ve now decided to look at Economics and Philosophy. I saw the first option as a fairly safe bet, and after hearing some of the adventurous plans of the rest of the group, not least of which Rob’s venture in to Oceanography and complex systems (!?), I thought I would push the boat out and dip in to Philosophy.

I’ve started my reading with two introductory Economics textbooks. One aimed at A-level students and one aimed at undergraduate students. This has worked really well so far as it has allowed me to gain a more shallow but wide overview from the A-level textbook, and when I’ve found a topic that I want to delve deeper in to I can look it up in the more detailed undergraduate textbook. ¬†Fortunately the contents page of the two textbooks are almost identical, both covering the same topics just in differing levels of detail.

So far I have learnt that Economics is split in to two sections, micro and macro Economics. Microeconomics is the study of economic decisions made by particular individuals and businesses, e.g. whether buying a piece of new tractor is worth the investment for a farm. Macroeconomics is the study of the economy and the whole and focuses on economic decisions made by governments, for example asking questions like ‘will investment in education now mean the nation will have a more skilled workforce in 20 years time?’. ¬†These two approaches seem separate but are actually interdependent, with many issues overlapping; economic decisions made by governments effect small businesses, and how small businesses perform effect the government’s decision making. Effectively microeconomics takes a bottom up approach to studying the economy whereas macroeconomics takes a top down approach.

The web issue that I will focus on is digital piracy. I’m not sure at this point whether I will look at this generally on all types of digital content or pick a media to focus on. I’m leaning towards focusing purely on music piracy. Demand curves described by the textbook speak about how as the price of a song drops, the buyer will purchase more songs. A rise in price will always mean a drop in demand and a fall in price will always cause an increase in demand. However the relationship between demand and price is not linear becuase willingness to buy more of a product drops as the number of purchases increases, this leads to what is known as effective demand. At first glance this seems like a theory that can be applied to the change in how music has become available for people to access either more cheaply or free (an economic view wouldn’t take in to account that the free option is illegal, it changes demand none the less), which may help explain the recent decline in the music industry.

In the following week I will start reading about Philosophy, the idea being to get a broad understanding of how philosophers approach problems, and then with a view to look at how moral philosophy can apply to illegally downloading music on the internet.

Written by William Lawrence on October 15th, 2012

Quick Digital Economy Act Scribble   no comments

Posted at 12:39 am in Economics,Law,Sociology

Have just been reading up on the Digital Economy Act, and its various ramifications. I have created a scribble that seems to me to show one of the key points – that only jumped out at me as I was doodling – that once again, the web has made Januses of us. I think that most of us are both copyright holders and copyright ‘acquirers.’

And in this case, the ISPs aren’t necessarily bad – if you are a struggling writer, musician or artist then if they are called upon to help you protect what you would think of as yours, you’re not really going to complain. (Speaking as someone whose household gets to buy stuff from royalties coming in from the British Performing Society.) However, most struggling artists, musicians and writers are (perhaps because they’re struggling , perhaps because it’s part of the creative process), also avid ‘collectors’ of what they might not necessarily have paid for… Obviously the issue is far more complex than this.

Certainly BT and TalkTalk have requested the review because of concerns about privacy (n.b. BT and TalkTalk took up a diametrically opposite stance on this very issue when it came down to Phorm and RIPA – perhaps they are now more wary of some of these issues). It certainly brings to the fore the issue of what is property on the web, what is private property on the web, and how far a government should allow intrusion into people’s lives in order to monitor or recover what might be defined as private.

John Stuart Mill wrote:

‘The things once there…mankind, individually or collectively, can do with them as they please. They can place them at the disposal of whomsoever they please, and on whatever terms…Even what a person has produced by his individual toil, unaided by anyone, he cannot keep, unless by the permission of society. Not only can society take it from him, but individuals could and would take it from him, if society…did not…employ and pay people for the purpose of preventing him from being disturbed in his possession..’ (From Heilbroner, p.129).

Mill saw that the principle of private property had not had a fair trial, and that reform could make changes to outdated laws, without recourse to outright revolution. He feared that Communism would stifle individual thinking and feared ‘whether there would be any asylum left for individuality of character; whether public opinion would not be a tyrannical yoke; whether the absolute dependence of each on all, and the surveillance of each by all, would not grind all down into a tame uniformity of thoughts, feelings, and actions…no society in which eccentricity is a matter of reproach can be in a wholesome state.’ (Heilbroner, .p132).

The doodle is JUST a doodle, it’s not good graphic design and it’s very messy.

Digital Economy Act doodle

Written by me1g11 on December 31st, 2011

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Economics Overview Part 1   no comments

Posted at 10:16 am in Economics

Economics¬†is a social science or discipline that analyses the production, consumption and distribution of goods and services, or from another perspective, ‘wealth.’ It often asks what is valuable at any one point in time by evaluating the worth of goods and services as they are exchanged. (Drawing on the notion of a point in time, and what we know about the modern capabilities of quantum computing, might suggest that any failure to properly understand where value lies and of what it consists, in immensely complex chains – for example in stock-market deals – could result in hugely disastrous market crashes.) Where this evaluation may be difficult to accomplish (for a number of reasons) this would seem to make economics a normative discipline.¬†Schumacher suggested that its models and theories are based on value systems and embedded views of human nature and referred to meta-economics, as some of these values are not made explicit in the discussion of wealth and its distribution.

Schumacher actually compared two different economic systems in order to illustrate this point: one was the western ‘materialist’ system where the standard of living is measured by the amount of annual consumption – and which therefore seeks to achieve maximum consumption along with optimal patterns of production. The other was a¬†Buddhist economics based on the notion of the ‘right livelihood’ and the ‘middle way’ – aiming for the maximum of human well-being with optimal patterns of consumption.

It is interesting that presently there seems to be more media attention given to research on economic notions of¬†‘well-being’ and even the search for drivers of happiness.

History:

Economics emerged in and around the 17th century, in line with a value system that differed markedly from those in existence in medieval times. Until then most of what was needed to survive was produced and exchanged locally, within ‚Äėtribes‚Äô or local populations. Robert Heilbroner makes a distinction between markets, where food, materials for building shelter, and clothing might be traded, and ‘the market system’. (The Worldly Philosophers, p.27.) ‘For the market system is not just a means of exchanging goods; it is a mechanism for sustaining and maintaining an entire society.’ Markets existed, and not just for barter, but generally, profit was frowned upon (seen as ungodly) and there were severe restrictions on those who attempted to sell to promote their own self-interest.

There are of course, examples of early traders who did undergo long voyages, (and thus were trading globally) but the suggestion is that these voyages were an end in themselves, and as much about discovery and adventure – ceremonial, bonding and social voyages – rather than for the ultimate motive of profit. A corollary to this might be that these ends are still in existence today (i.e. the bonding of the boardroom, the religious pursuit of profit, Thatcher’s yuppies who took to heart the free market forces and the limitation of the state’s role, and took the role of competitive individualism as their mantra for professional activities.)

In line with the emergence of economics, Beinhocker says, of the period between 1750 and the mid-eighteenth century,

‘According to data compiled by the Berkeley economist, J.Bradford DeLong, it took 12,000 years to inch from the $90 per person hunter-gatherer economy to the roughly $150 per-person economy of the Ancient Greeks in 1000 BC. It wasn’t until 1750 AD, when world gross domestic product (GDP) per person reached around $180 that the figure had finally managed to double from our hunter-gatherer days 15,000 years ago. Then in the mid-eighteenth century something extraordinary happened-world GDP per person increased around 37-fold in an incredibly short 250 years to its current levels of $6,600…’ (p.9).

The evolution of economics:

Earlier it was called political economy, but then it was suggested in the 19th century that ‘economics’ as the short form of economic ‘science’ seemed to suggest a wider scope for the subject.

There are basic contrasts between micro and macro economics – where the micro involves households, individuals and firms and macro looks at ‘entire’ economies and growth, unemployment, fiscal policy, inflation etc.. Normative economics looks at prescriptions – how economics should work, while positive economics looks at describing what occurs. As suggested above, the distinction between these two might not be as clear-cut as one might expect.

There is also economic theory and applied economics, rational and behavioural economics, mainstream and heterodox economics, econometrics (where economic theories are tested empirically, i.e. through observation, as opposed to via controlled experiments) and experimental economics.

Classical political economy

Adam Smith’s¬†The Wealth of Nations described land, labour and capital as the three drivers of production and wealth. He also recognised that the division of labour could create great efficiencies, while perhaps causing problems for the common man whose world view was created by the day to day features of his job. ¬†Smith was the originator of resource allocation theory, suggesting that in a competitive but self-regulating space, resource owners will deploy these most profitably – resulting in an equal rate of return and satisfaction of economic needs of the people. The market was seen as a ‘mechanism’ (note Newtonian tone) acting as an ‘invisible hand’ paradoxically leading people selfishly pursuing their own interests to create social benefit. Self-regulation meant that the market was its own guardian, and didn’t need the interference of government. Prices are kept from ranging away from the cost of production via public demand. The market also encouraged risk, creativity and invention. Smith also referred to two laws: the law of accumulation and the law of population. Via the accumulation of capital society could benefit as money was invested in more machinery and means of production. However, while more machinery would mean more workers, which would in turn mean higher wages that would then dissolve profits – the law of population meant that ‘the demand for men, like that for any other commodity, necessarily regulates the production of men.’

Other early¬† political economists were Malthus, John Stuart Mill and David Ricardo. Ricardo (writing just after the introduction of the Corn Laws, which practically broke Britain, in order to protect the landowners’ interests) looked at the distribution of income and conflict among landowners, workers, and capitalists. Ricardo saw that resources such as land are limited, and would result in problems emerging from the growth of population and capital, keeping wages and profits down while increasing rents. He grasped that the interests of landowners and capitalists were at odds and that the landowners were at war with the community. This position made Ricardo very popular with industrialists…

At a time when people were starting to question whether nationhood could be linked to population numbers, Malthus saw that human populations tended to increase, outstripping food production. One increase was geometric while the other was arithmetic. He also questioned the idea that a market economy could naturally create employment, suggesting (like Keynes in the 1930s) that savings (Smith’s accumulation) would create unemployment as countermanding spending. Malthus’ views were very unpopular. Malthus’ view was that, ‘Famine seems to be the last, the most dreadful resource of nature. The power of population is so superior to the power of the earth to provide subsistence…that premature death must in some shape or form visit the human race.’

It is of note that (as Beinhocker points out, p.17), while some modern economists generally agree that economics should be studied as a complex system, and others agree that it has much in common with the idea of evolution, it was, of course, Malthus who inspired Darwin’s thinking, and that in fact much of our thinking about evolution derives from early economic ideas on wealth and population.

It is often important to account for the analogies and metaphors inherent in and between disciplines as these can account for some circularities and blind passages that seem to recur. Just as cognitive psychology might have suffered in part from its reductionistic reliance on the ‘brain as computer’ analogy (when the sorts of computers referred to in the analogy were created in order to attempt to replicate just one small part of how our minds work), so it is possible that thinking on economics might have been held back by earlier hesitation about exploring ideas about complex adaptive systems. There have been many works written on this subject: Veblen, Alfred Marshall, Schumpeter and Hayek, Nelson and Winter, for example, but it is generally agreed that mainstream economics has mostly been concerned with the model of economics as a form of self-governing mechanical system.

Although it seems that Smith, Malthus and Ricardo were opposed to one another, in fact it seems that partially where they differed was at the level of focus that they applied their thinking to. However, they saw social systems driven by the search for profit, market roles, a place for government and the force of competition. They also applied their thinking to technology. Smith described in great detail the ways in which pins were made, and how the division of labour and application of technology had their part in this process, but his thinking seemed to focus on a closed technological system. Malthus and Ricardo however were present when technology started to explode upon the scene, as more innovation came in, (the steam engine, the spinning jenny, iron working) it became apparent that with such innovation might come an upset to the ordered mechanisms of self-governing economies.

John Stuart Mill (worth writing about in far more detail) differed from these three thinkers in that he came of a more utopian approach. The social changes that were fostering early economic thinking had produced factories where social conditions were utterly appalling. Worse, because of an insistence on mechanism and natural law, it seemed to some that these appalling conditions were just a natural consequence of the market, and that while there was horror running through the fabric of these workplaces, it was akin to that of ‘nature red in tooth and claw:’ impersonal laws at work with no need for intervention.

Mill, following Robert Owen, Saint-Simon and Fourier, was convinced that a better way could prevail. Rather than encouraging the lower classes to revolt as did the Communists, utopian idealists wished to persuade those who held the power to change their ways, to reform. While the means of production might be functioning according to the laws described by Smith, Malthus and Ricardo, what happened to what was produced was actually down to a number of factors that could be controlled – and was not subject to natural law.

Globalisation and The Long Tail   no comments

Posted at 10:19 pm in Economics,Sociology

Globalisation refers to the how the world is ‘shrinking’ culturally and economically. How the world is changing from different nations managing themselves to one big world trading ideas, people, products and money. There are many global companies such as MacDonalds that exists everywhere! There are a number of advantages and disadvantages to globalisation. Sometimes it can be seen as a good thing that benefits small businesses by giving them access to a larger market, such as through the Internet. However, sometimes it can also be seen as a bad thing, for example with the outsourcing of work to poorer countries and buying materials for production in poorer countries to save money which can affect the local and national economy.

The Long Tail – Chris Anderson

The tail refers to the long end of the curve on the graph that depicts the popularity of all products. As you can see from the image above, ‘the head’ is short and contains the most popular of products. These are things that everyone wants, think of it is the top 40 songs in the charts. ‘The tail’ is much longer and consists of every other product in¬†existence (or every song that is not in the top 40!). These things are much less popular, but there is a lot more of them. Money can be made by just selling products from the long tails, you would sell maybe one of each product rather than millions of one product as is seen in ‘the head’.

Companies do still aim for a business model that targets ‘the head’ rather than the long tail. For example radio stations tend to play the popular music at that moment in time, but there is a suggestion from Chris Anderson that the radio is dead.

Why the radio is dead:

  1. Radio stations need money so they need advertising and therefore need listeners. To get the most listeners you need to appeal to the majority who like what is popular at that moment in time (‘the head’).
  2. The rise of technology in the form of MP3 players. You can listen to any music you want at home, on your PC, on my personal MP3 player and even take that into your car and connect it to a modern car stereo.

Chris Anderson also suggests that “The Long Tail is full of crap.” Which is it…It does contain everything! But the compelling thing about the long tail is that there is something for everybody that they would not be able to find and purchase otherwise.

The Internet and the Long Tail

The internet has given us unprecedented ability to access products never before available so quickly and easily. The Internet is the best example of how globalisation can reach everyone. Someone who makes Doggles (goggles for dogs), or other niche items, can become a millionaire.

A real shop on the high street may have trouble making money if it was taking advantage of the long tail. Not just for the reason that it cannot reach as many customers as an online shop, but for more practical reasons that it would be difficult to sort through all of the many niche products. Being able to search through the ‘crap’ and filter to get to the information you actually want is very much a benefit you can see online. Social media may also help with this, we often see suggestions for other items we might like on online shops like Amazon. Folksonomies consisting of lots of tags collaboratively created may also assist with finding things you want and things that are similar to it.

Does the Internet bring down the barriers for businesses?

Eric Schmidt on the long tail

Is Globalisation good for the small business?

Yes and no, it depends on what you are selling. There is the potential for more sales through having greater access to a wider market. This is especially true for niche items and products where in some situations they may sell nothing if they are not based near their market. The Internet definitely assists with globalisation based on geography. There is also the benefit that selling products online is very cheap to set up and use. Google Analytics is also a nice tool to assist with marketing and improving your own business website.

However, with the benefits of reaching more people, large businesses will also receive this benefit. Large businesses may be able to give better prices due to mass production, but this shouldn’t effect niche businesses where large businesses do not offer so many niche products.

Written by Gemma Fitzsimmons on December 6th, 2011

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