How things change…

From Quentin’s blog.

There’s a piece in Business Insider based on an interesting fact first noted by MG Siegler. It’s this:

Apple’s iPhone business is bigger than Microsoft

Note, not Microsoft’s phone business. Not Windows. Not Office. But Microsoft’s entire business. Gosh.

As the article puts it:

The iPhone did not exist five years ago. And now it’s bigger than a company that, 15 years ago, was dragged into court and threatened with forcible break-up because it had amassed an unassailable and unthinkably profitable monopoly.

Wow! It seems only yesterday when Microsoft was the Evil Empire.

Regulating the Net

This evening I went to an interesting lecture on “The challenges of regulating the Internet” given by Simon Hampton, who is Google’s Director of Public Policy for Northern Europe. He was, he insisted, speaking only “in a personal capacity” and the audience, for the most part, took him at his word. His thesis was that in the technology business the greatest challenge is “the transition from scarcity to abundance” and that policy-makers haven’t taken this transition on board.

The metaphor he used to communicate abundance was the hoary story of the guy who invents the game of chess and who, when asked by the Emperor what he would like as a reward requests one grain of rice on the first square, two on the second, four on the third, etc. You know the story: according to Hampton by the time you get to the 64th square the amount of rice needed is the size of Everest. At which point my neighbour, David Cleevely, nudged me and said that he had worked it out and it was enough rice to cover the entire surface of the earth to a depth of nine inches! But it turned out that, for Hampton, the metaphor also has a chronological dimension: we’re just about half-way through the chessboard.

As befits someone who spends a lot of time in Brussels arguing with the anti-trust division of the European Commission, he has a pretty jaundiced view about what goes on there. But he made a good point, namely that the EU finds it easiest to regulate in new areas simply because regulating in existing areas means dealing with the reluctance of member states to change their existing laws. The result is that the Commission tends to to move too quickly to legislation (in the form of Directives) in emerging areas. Examples: the e-Money Directive; the e-Signature Directive; and, now, the Privacy Directive. Plus, of course, the idiocy of applying to the Net concepts designed for regulating TV broadcasters.

He then went on to list the four big companies that have “embraced abundance” — Apple, Amazon, Google and Facebook. They all operate on massive scale and have an interest in a bigger, freer Internet — though they have only recently woken up to the necessity of lobbying for this in the corridors of power (which is why the campaign against SOPA was so significant). In this context, Hampton claimed, size really matters — which is why moving into the second half of the chessboard is so significant. “The larger the haystack, the easier it is to find the needle.” (Not sure I followed his logic here.)

He was interesting on the subject of lobbying — which of course is a large part of his job and he defined it as trying to persuade legislators and policy-makers that their concept of the public interest should be realigned with those of industrial lobbies. People in declining industries tend to scream, and thereby gain public — and media and legislators’ — attention; in contrast, people in new, growing industries are too busy getting on with it — which probably explains why the big Internet companies were so slow to get their lobbying act together in Washington.

Finally, Hampton moved to the question of how to rethink policy-making in the context of abundance. In his opinion, there’s no need to change the broad objectives of public policy. The key switch that is needed is for policy-makers to “embrace abundance”.

What would that mean in practice? He suggested three general principles:

  • Don’t protect industries based on scarcity. This means accepting the two sides of the Schumpeterian wave of “creative destruction”. To date, our legislatures have been hopeless at this: they appear to be mainly preoccupied with enabling the interests of the past to constrain the future.
  • Work with crowdsourcing. This is an interesting idea. The example Hampton cited involved contrasting the way broadcasting regulators deal with unacceptable content compared with the way YouTube effectively crowdsources the detection of unacceptable content by inviting its users to flag clips that they think are offensive. Also the way eBay engenders trust with its reputation system; or the way TripAdvisor invites its users to “rate the raters”.
  • Reappraise the power of data. Mining the avalanche of data is, Hampton thinks, the beginning of wisdom in an age of abundance. (Yes, but it raises privacy nightmares.)
  • In the Q&A the main topics were (a) the cluelessness of legislators in relation to the Internet, and (b) concerns about privacy (hardly surprising given this). I made the point that legislators have always been clueless, so there’s nothing new here. (I quoted Bertrand Russell’s argument about why an MP couldn’t be more stupid than his constituents — “because the more stupid he is, the more stupid they are to elect him”.) The point is that in a representative democracy, Members of Parliament should not be expected to be knowledgeable about everything. It’s Parliament, as an institution, that needs to be knowledgeable — which is why we need evidence-based policy-making in relation to Internet regulation, intellectual property, etc. And, to date, we’ve had very little of that.

    So the battle for an open Internet continues.

    iMicroscope

    The product ecosystem that surrounds Apple iDevices reminds me of the Peace of God as described in the Bible — in that “it passeth all understanding”. This is an add-on for the iPhone4 (and 4S) that turns it into a microscope.

    Well, sort-of.

    The only thing I could find to test it when it arrived was a penny. This is how it came out.

    Somehow, I don’t think it’ll make me into a latter-day Leeuwenhoek. But it’s fun.

    Telling it like it is

     Just came on this in Aaron Sloman’s wonderful home page:

    What should I write if asked to act as an academic referee, and the invitation requests me to assess the impact of the candidate’s work?

    “I am not interested in impact, only quality of research, which does not always correlate with impact, since the latter is often subject to fashion and transient funding policies, etc. If you want a study of impact you would do better to consult a social scientist. Moreover high impact as measured by citations is often a consequence of making mistakes that many other people comment on.***

    Many great research achievements could not possibly be assessed for their impact until many years later, in some cases long after the death of the researcher (e.g. Gregor Mendel).I’ll tell you what I think about the research quality: things like the depth, difficulty, and importance of the questions addressed, the originality, clarity, precision and explanatory power of the theories developed, and how well they fit known facts, as far as I can tell. If there are engineering products I may have some comments on their contribution to research. I shall not be able to evaluate their contribution to wealth or happiness.”

    Thanks to Seb Schmoller for the link.

    ***Footnote: Really acute observation this. One of the most cited research papers in recent history is the infamous MMR paper published by the Lancet.

    Consent of the Networked

    I’ve just got Rebecca MacKinnon’s new book and am looking forward to reading it. But at the same time as it arrived I also got notification of her talk at the Boston launch of the book. It’s vintage MacKinnon: intelligent, informed, perceptive. I particularly like her concept of the “Sovereigns of Cyberspace” — Zuckerberg, Bezos, Page, Brin, Apple, Microsoft. I also like her use of the “information ecology” metaphor: we’ve moved from an ecosystem characterised by scarcity (a desert) to one characterised by abundance (a rain-forest) and the challenge is to devise a system of governance for that.

    John Kampfner’s review is here.

    Trevor-Roper: the reading list

    During the War, Hugh Trevor-Roper worked in British Intelligence, mostly on code-breaking and interpretation of intercepted messages. He also recorded in his diary what books he read. According to his biographer, the tallies for the four years 1940-1943 are:

    1940: 65
    1941: 72
    1942: 84
    1943: 119

    Now I know that there weren’t all that many distractions available to an Intelligence Officer in wartime London, and that there were periods when he was hospitalised with chronic sinusitis, but still…

    How to write — by the original MAD-man

    From the wonderful Brain Pickings newsletter.

    On September 7th, 1982, [David] Ogilvy sent the following internal memo to all agency employees, titled “How to Write”:

    The better you write, the higher you go in Ogilvy & Mather. People who think well, write well. Woolly minded people write woolly memos, woolly letters and woolly speeches. Good writing is not a natural gift. You have to learn to write well. Here are 10 hints: 1. Read the Roman-Raphaelson book on writing. Read it three times. 2. Write the way you talk. Naturally. 3. Use short words, short sentences and short paragraphs. 4. Never use jargon words like reconceptualize, demassification, attitudinally, judgmentally. They are hallmarks of a pretentious ass. 5. Never write more than two pages on any subject. 6. Check your quotations. 7. Never send a letter or a memo on the day you write it. Read it aloud the next morning – and then edit it. 8. If it is something important, get a colleague to improve it. 9. Before you send your letter or your memo, make sure it is crystal clear what you want the recipient to do. 10. If you want ACTION, don’t write. Go and tell the guy what you want. David

    ‘S obvious, really. So why don’t more people do it?

    The End of Wall Street As They Knew It

    Trying to escape from media consensus and groupthink about the economy, I came on this thoughtful piece by Gabriel Sherman arguing that the legislative changes in the US are beginning to bite on Wall Street.

    Banks have always had occasional bad years, but the sense on Wall Street is that this bad year is different. Over the past several weeks, I have had wide-ranging conversations with more than two dozen senior Wall Street executives, traders, bankers, hedge-fund managers, and private-equity investors. And what emerged is a picture of an industry afflicted by a crisis it would not be flip to call existential.

    The crash four years ago was shocking enough to the financial class. But what is happening on Wall Street now is even more terrifying. No doubt the economy itself—the crisis in Europe, the effects of the tsunami in Japan, America’s sputtering recovery—has played a large part in the financial industry’s struggles. But even the most stubborn economies improve eventually. The bigger issues are structural. The Dodd-Frank financial-­reform act, much maligned, has already begun to change the shape of the financial system—even before a number of its major provisions are proposed to go into full effect this coming July. Banks are working hard to interpret Dodd-Frank’s provisions in a way most favorable to them—and repealing Dodd-Frank is a key piece of Mitt Romney’s campaign platform.

    To comply with the looming regulations, banks have begun stripping themselves of the pistons that powered their profits: leverage and proprietary trading. In the wake of the crash, Morgan Stanley and Goldman Sachs converted to bank holding companies to tap the “discount window,” the Fed’s pipeline of cheap funds that gave the banks an emergency source of liquidity. That move seemed smart then, but the stricter standards required of banks have now left them boxed in.

    With all the major banks unable to wager their own funds on big bets, there’s a growing sense that the money that was being made during the Bush boom won’t be back. “The government has strangled the financial system,” banking analyst Dick Bove told me recently. “We’ve basically castrated these companies. They can’t borrow as much as they used to borrow.”

    If true, this is good news. Worth reading in full.

    Those were the days

    I’m stuck in bed with a stinking cold but am greatly cheered by (a) news of the latest arrests at The Sun (a newspaper) and (b) Adam Sisman’s biography of Hugh Trevor-Roper. I’ve just go the the point where Roper, having failed to get an All Souls Fellowship, has had to console himself with the status of a mere graduate student. He is unimpressed by the supervisor assigned to him, who is profiled by Sisman thus:

    Canon Claude Jenkins, then in his sixtieth year, had been Regius Professor of Ecclesiastical History since 1934. He was an Oxford eccentric, who dressed in a low-crowned hat and antiquated clerical garb, collected cigar butts to smoke later, and surreptitiously pocketed fingers of toast from the breakfast table. Piles of books on both sides of the steps up to his rooms left only a narrow corridor for visitors to ascend, before they squeezed into a study so stuffed with books as to be almost impenetrable. Even the bath was filled with them. Jenkins’s mind was as chaotic as his rooms. He lectured all morning on the hour, each lecture commencing directly after the other. An alarm-clock hanging from a string round his neck served as a prompt to change subject, though his few listeners (sometimes as few as one) found it hard to distinguish one lecture from another.

    Sigh. They don’t make ’em like that any more. And if they did the Teaching Quality Assessment, or some other wheeze dreamed up by McKinsey, would do for him.

    Ideological consistency

    I love this. The announcement that Margaret Thatcher will have a State funeral when she dies has prompted this e-petition.

    In keeping with the great lady’s legacy, Margaret Thatcher’s state funeral should be funded and managed by the private sector to offer the best value and choice for end users and other stakeholders. The undersigned believe that the legacy of the former PM deserves nothing less and that offering this unique opportunity is an ideal way to cut government expense and further prove the merits of liberalised economics Baroness Thatcher spearheaded.

    It needs 100,000 signatures and currently has only 27,000. I found out about it in Julian Barnes’s lovely review of The Iron Lady in the New York Review of Books.