2007-8 Blog Archive for Brian Micklethwait
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Link to 2006 Archive

	Cricket follows the money to India	07 APR 2008
	Staying put in another country	24 MAR 2008
	Open Skies	13 MAR 2008
	Brains draining out of Britain	04 MAR 2008
	Blu-ray wins but still competes	20 FEB 2008
	Cheap candles and dumping that isn't	12 FEB 2008
	Competition versus IP versus contract	04 FEB 2008
	Was Tesco only made possible by an intrusive law?	28 JAN 2008
	Picking think tank winners	07 DEC 2007
	Microsoft - the competition hots up	27 NOV 2007
	Economic freedom versus political freedom	21 NOV 2007
	How can you tell what a monopolist is worth?	16 NOV 2007
	The perils of politics	05 NOV 2007
	Liberty speakers	29 OCT 2007
	The EU treaty and what Britain's voters will do about it	23 OCT 2007
	False and true competition for Microsoft	05 OCT 2007
	Risky Business	24 SEP 2007
	Seymour Cray and the markets for computers	11 SEP 2007
	The rules for schools	12 JUL 2007
	What is Sarkozy thinking?	28 JUN 2007
	Two new competitive heroes	18 JUN 2007
	The market will itself impose rational mobile phone prices	11 JUN 2007
	Sky TV - the offence of winning	04 JUN 2007
	It's not fair!	29 MAY 2007
	Collusion and competition in the air	21 MAY 2007
	A tale of two laptops	17 MAY 2007
	How Scotland and England might soon be competing	11 MAY 2007
	Imperfect (cricket) competition	30 APR 2007
	Has Walmart settled the Blu-Ray versus HD DVD HD DVD war?	24 APR 2007
	Liberalising shop opening hours in France	16 APR 2007
	Sarkozy - liberal about what he can change and protectionist about what he can't	10 APR 2007
	The menace of shopping	03 APR 2007
	Thoughts on the transatlantic open skies deal	26 MAR 2007
	Competition for the truth	19 MAR 2007
	Turkish competition	12 MAR 2007
	The conventional wisdom - with numbers	05 MAR 2007
	Free trade means you have to have taxes as high as ours!	26 FEB 2007
	Competing to clean up the planet	19 FEB 2007
	Switching from petroleum to alcohol	13 FEB 2007
	Competitions	05 FEB 2007
	Is Gazprom trying to control Europe?	29 JAN 2007
	Good for Google	22 JAN 2007
	Tesco does it better	15 JAN 2007
	All the world loves a gadget but not all the world learns the right lesson	08 JAN 2007

Cricket follows the money to India
07 APR 2008 – The contrast between the disappointing England national football side and the splendour of its Premier League, adorned by the best players in the world, distresses English soccer pundits. Why can't our lads, the few who get to play amongst all these foreigners, learn from their foreign teachers? Do they now get paid so much to play for their clubs that country doesn't matter? Do they reckon the best clubs are far better teams than any national side, and that winning the English Premier League counts for more than winning the World Cup? And are they, perchance, right?

English cricket could not be more different. It used to attract tens of thousands. But last year, I went to a game between Surrey and Hampshire. It was a spiritless affair, in an almost deserted stadium that now only comes alive during international matches and shorter games. This despite this particular game being adorned by one of the world's greatest cricketers, the Hampshire captain and Aussie spin wizard, Shane Warne. English county cricket has been a bore for years, and it badly needs some competition.

It is about to get it. Now, the same supposedly anti-national malaise that afflicts English soccer is about to afflict Indian cricket. India is, if you measure it by the number of devoted fans a country contains, by far the biggest cricket country in the entire world. There are more cricket fans in India than there are people in Europe. And now that Indians are starting to have serious money, it was only a matter of time before India emptied the world of its best cricketers for a few months each year and had them play against each other, in India, for money they could never earn anywhere else.

Needing to attract people who have work to do and lives to live, cricket has been getting shorter and shorter in recent decades, to the point where "real" cricket and the kind of cricket that people actually want to watch have become like classical music and pop music. Real cricket, which I love to follow but don't often got to, goes on for days. Pop cricket last for only a fixed number of "overs" (each over is six deliveries) for each side, and now it is down to twenty overs. Such games can be enjoyed from start to finish in one floodlit evening, and this version of cricket is proving hugely popular wherever the game is played.

India's Indian Premier League, and I am sure that the British football parallel is entirely deliberate, is about to get going with a twenty overs each format. And just as English soccer is viewed on TV all around the world, so too will this. Purist lovers of classical cricket are aghast. I can't wait.

The moral of all this for Europeans? That if you allow your arrangements to outlive their usefulness and meaningfulness, people in other parts of the world will make their own rules and will upstage you. Don't fight it. Let them do it, and be glad that competition is keeping you on your toes, and that the world continues to progress.
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Staying put in another country
24 MAR 2008 – In my previous but one posting here I wrote about one of the most obvious and visible ways in which a country can be seen to be losing its competitive edge, in the form of people very visibly leaving to live somewhere else, equally visibly. I wrote then about clever high earners leaving my own country, Britain. I could equally well have written about Germany, as this piece at Pajamas Media well illustrates.

More than 20,000 highly-qualified Germans leave their country for Switzerland every year. Apparently, one cannot bear the fact that so many Germans - and not the dumbest of the lot - freely choose to go into exile, attracted by the prospect of lower taxes, higher salaries, and fewer government dictates.

But the damage done by increased tax rates, even if imposed only upon the "very rich", doesn't end there. Not only do those actually earning these highly taxed salaries start to move elsewhere. The same thinking is liable to spread to those who even aspire to such salaries. They too are liable to move. More fundamentally, for every person who is prepared to overcome his natural objections to leaving the place of his birth and to go to the trouble of moving himself, his family and his most treasured belongings to another country, where he will have to learn many new and unsettling ways of doing things, there are dozens more who move to a different country without going to all that bother. They stay put, but move to a different state of mind. Higher taxes make a different country, which everyone must then move to.

Over a decade ago now, I wrote a Libertarian Alliance pamphlet which I am still very proud of entitled "The Top Rate of Income Tax Should Be Cut to Zero" (pdf version here) in which I described all these depressing tendencies, but, me being the optimist I still sometimes am, in reverse, and in their most extreme and extremely benign form. Radically cutting taxes on the rich is something that helps many people besides the rich. But Germany's rulers are contemplating no such beneficial tax-cutting process to solve the problem of Germans fleeing to Switzerland. No, their answer is to bully Switzerland into raising its tax rates also, which Germany's rulers can hope to do because the entire EU is - that is to say all the rulers of the EU are - lining up alongside Germany's rulers in that imperialistic project. These people are happy to impose price competition upon others, but this is not something they want others doing to them. If they get their way with Switzerland, they will turn Europe itself into a new, slightly different and slightly worse country, which we will all have to move to or else move out of.
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Open Skies
13 MAR 2008 – In an uncertain world, there was always one thing that you used to be able to rely on. If British Airways said or did something, anything, Richard Branson, owner of Virgin Airlines, would criticise. If Branson's Virgin Airways said or did something, anything, BA would be ready to explain how wrong it is, how against nature, how evil. They hate each other.

In a centrally planned economy, one of them would be in charge of the air travel plan, while the other would be taken away in a van. This is basically how BA views the world and their preferred place in it (in charge) and their preferred place for Richard Branson (in the van). In a free market economy, the mutual animus between these two colossi results in a competition for the favours of air travelers. Hurrah for the free market economy.

Which is about to get freer. A new "open skies" deal has been signed between the EU and the USA. This deal will loosen up who can fly in and out of Europe, particularly at London Heathrow.

The first stage of the treaty ends the lock that London-based British Airways and three other carriers had on trans-Atlantic flights from London Heathrow, Europe's busiest airport. It also allows EU carriers to fly to the US from any of the bloc's countries instead of just their home nations.

"We want Stage 2 to sweep away the outdated restrictions on the ownership and control of airlines, so that EU investors can take majority stakes in US airlines and vice versa," Walsh said Friday in a speech to the New York Wings Club in Dublin. "Genuine deregulation" would lead to more industry efficiency and consumer benefits, he said.

To learn more, I recommend that you listen to Michael Jennings talking about the past, present and future of Open Skies in this conversation, and in this one. I particularly like Michael's answer to the question "Can you sell your slots?", which is featured also in this short trailer.
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Brains draining out of Britain
04 MAR 2008 – One of the most potent arguments against Soviet communism was the huge number of people who ran away from it, and the tininess of the trickle of people who were actually attracted to it. By attracted, I don't mean they gave idiotic lectures in Western universities about how great it was. I mean: they went to live there. The idiot lecturers could talk their way around everything else, but that they could not explain. When it comes to working out which country is doing well and which badly, there's nothing like standing at the border and counting heads, carefully noting which direction the heads are moving in, to tell you what is really going on. When it comes to the never-ending competition between nations, no other statistics are so revealing.

Particularly significant are people whose heads are stuffed with education, because theirs are the heads that cost the most to stuff and they are the people who can be taxed the most once they start working.

Governments throw money at education with wild abandon, and their voters mostly egg them on. Education and healthcare. I don't know how it is elsewhere, but whenever in Britain anyone is complaining about some particularly wasteful waste of public money, they always say: think how many "schools and hospitals" could have been built with the same money. But just because they spend so much on education, governments particularly hate it when hyper-educated people take their education, and their tax payments, elsewhere.

So the fact that when you type "brain drain" into the news search engines just now, what you get is mostly news of a brain drain from Britain counts, in Britain, for a great deal. This makes the current government, which has now been in power for the last decade, look very bad. The last time I can remember "brain drain" featuring so heavily in British headlines was when Michael Caine and Sean Connery were in their primes in the 1970s, and they and their high earning contemporaries were taking their fortunes elsewhere.

From then until very recently, most of the brain drain news in Britain concerned brains draining from other countries into Britain. French people, for instance, have recently become very common in London, as have South Africans. Poles, famously, have been coming here by the thousands. That was a brain drain too, if you think, as I do, that plumbing and building work requires a brain (as well as involving sorting out things like drains). But now the Poles are starting to go back to Poland. Meanwhile clever, professional, highly educated Brits are moving to warmer, less expensive, less annoyingly regulated places, preferably where they also speak English, most especially to Australia.

The atmosphere which that 1970s British brain drain helped to create resulted in a long period of Conservative, moderately wasteful, moderately rapacious rule. (These things are only relative.) The same thing could be about to happen again.
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Blu-ray wins but still competes
20 FEB 2008 – With startling suddenness the high definition DVD war has ended, in total triumph for the Blu-ray camp and the total defeat of the HD DVD standard. Sony make both hardware (computers, music machines, TVs) and software (movies, music, computer games), and that can cause trouble, as for instance when Sony computers refused to play certain kinds of DVDs. But in this case, Sony's commitment both to software and to hardware has enabled it to win this 21st-century battle of the gauges. At least somebody won. At least now we all know how to buy high definition DVDs, and don't have to worry about having bought the wrong kind. Hallelujah!

I've been looking at an ancient news story, from way back in 2006 when this battle was anything but settled, and you can see the EU Competition mincing machine in full action, most particularly against Sony. Sony's attitude seems then to have been: it's our business, it's not your business. Suddenly, I like Sony. So, now that there is a monopoly, following a succession of announcements from movie studios that they will from now on be exclusively using the Blu-ray standard and dumping the HD DVD standard (which is what the EU suspected was happening in 2006 but couldn't seem to prove), why is the EU not making more waves now about this dastardly victory by Blu-ray?

Well, if the EU had tried to keep the HD DVD standard hanging on in Europe in order to keep the Blu-ray camp on its toes, in order to "provide competition" for it, that would have been consistent with the EU attitude towards competition but it would also be ridiculous. We punters know what we want. We don't want "competition". We want a winner. That applies just as much to Europeans as to anybody else.

But just because Blu-ray has won this particular battle, that doesn't mean that from now on it actually will face no competition. Hard discs may soon be so capacious that movies will all be storable there, rather than on annoyingly separate little thingies, however standardised. Besides which, if high definition DVDs seem too expensive or rule-bound, people will just spend their time and money on, you know, other things.

In other news, I love this, from this report about Microsoft's attempt to buy Yahoo and compete better with Google:

According to Friederiszick, Brussels could either stop the deal on the grounds that it will reduce competition or conversely, it could accept it in order to allow real competition in a market increasingly dominated by one single actor.

Cheap candles and dumping that isn't
12 FEB 2008 – Tim Worstall contributes copiously to the Adam Smith Institute Blog, and it seems to be largely thanks to him that the Globalisation Institute Blog continues to tick over.

His latest piece at the GI blog is about Europe's candle makers, who are facing "unfair" competition (is there another kind?) from the candle makers of China. Worstall notes that candle makers complaining about unfair competition (from the sun) also figured prominently in Bastiat's famous send-up of tradesmen moaning about unfair competition. The report Worstall links to says that the European candle makers are recommending that "punitive" duties be imposed upon their wicked Chinese rivals, but it is nowhere explained what it is that these Chinese are supposed to have done wrong. Is there something wrong with the candles they are making? Is slave labour involved? It doesn't say, and it is surely a sign of the times that the writer of the report feels no need thus to enlighten us. In the absence of such an explanation, says Worstall, it is reasonable to guess that their only crime is that they are making candles more cheaply than the Europeans. And why should they be punished for that?

The report also mentions dumping, of steel this time. Dumping. Now there's a word. It evokes waking up in the morning and finding garbage in your front garden. But real dumping is when totally unwelcome stuff that someone else is only trying to get rid of is dumped on your property. You never asked for it, and you don't want it. It will cost you to get rid of it. But steel "dumping" is not like that. This Chinese steal may be below cost (I'll get to that), but the people who are getting it are glad to have it. Why else did they buy it? It wasn't "dumped" on them. It was delivered.

Actually, what this "dumped" steel may really be is a sample, persuasively priced. After all, Chinese steel, however cheap, is, to start with, a bit of an unknown quantity. Is it good enough? Strong enough? Shiny enough? The obvious procedure for calming such doubts is that those wanting you to switch to Chinese steel should sell you the stuff so cheaply that it has to be worth a try. Once they've convinced you of its merits and reliability, strength, shininess, whatever, and corrected any early errors – then they can start charging you more, and make a profit. "Dumping", in other words, is merely a sales expense, like training your sales people and learning how to write sales brochures in the proper local way. And again I ask: what is wrong with this behaviour? Why punish it?

"Dumping" is a perfect example of a weasel word. It blurs together two morally opposite things namely: selling something to you very cheaply (good), and forcing stuff on you that you don't want (bad). It thereby tries to say that something good is actually bad.

We bloggers are particularly well placed to understand what a fine thing dumping can be. Most of us do this all the time, foisting our opinions upon anyone willing to read them, usually at way more cost to ourselves than we charge. But if you think it's garbage you don't have to read it.
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Was Tesco only made possible by an intrusive law?
28 JAN 2008 – For many months now I have been banging about Tesco, the great British supermarket chain, about the excellence of its products and about the spiteful motivations of its less competent and profitable rivals, who have been stirring up political campaigns against it.

But last month I read something which made me see both Tesco and the other supermarkets, and the many much smaller shops which are threatened by Tesco and the other supermarket, in a quite different light:

An early study, by Basil Yamey, urged the abolition of Retail Price Maintenance. The texture of everyone's life has been transformed by the result. We forget that supermarkets were effectively illegal under the old price-rigging ...

Allow me to "unpack", as the literary critics say, what this "price rigging" amounted to. There are two distinct issues here, which need to be kept firmly separated. First, there is the matter of whether any conditions you may care to attach to the sale of an item of your property are "sensible" or "wise" or "good business" or "good for the economy" or "uncompetitive". And second, there is the question of whether you should be legally allowed to insist upon such conditions.

I say that if I sell a continuous stream of my products to you, I should be allowed to attach any conditions I like to continuing to supply you with my products, certainly including me specifying the price at which you subsequently sell them. They are, after all, my products, and if I don't want to go on selling them to you, the law shouldn't force me to. Except that, thanks to the IEA and Basil Yamey, in Britain, it suddenly did.

Blundell says that in the days before RPM deals were made illegal, supermarkets were "effectively illegal". Ah yes, "effectively". Effectively as in, actually: not illegal. What Blundell is really saying is that supermarkets were comparatively difficult and unprofitable to run when retailers were prevented by many of their suppliers from setting (i.e. cutting) their own prices. But when suppliers became legally compelled to supply all retailers, even if they strongly disapproved of the bigger ones among them indulging in systematic price cutting, supermarkets started to make economic sense.

But abolishing RPM was not allowing more freedom. It was a restriction of freedom. It was a violation of property rights and of the right to contract freely. It was the imposition, by force, of a particular and highly politicised idea of what "competition" ought to mean, rather than simply allowing competition to happen.

If so, then all those who now regret the rise of supermarkets and the decline of small high street shops should be urging not more laws, but just this one law fewer. They should be crying out not for more politics, but for less.
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Picking think tank winners
07 DEC 2007 – On Wednesday night I attended the Stockholm Network's Golden Umbrella Awards Dinner at the National Liberal Club in London.

First things first. The event itself was very slick and well organised. The worst thing about awards ceremonies is when every award giver and every award receiver makes a speech that is five minutes too long, and you're still all there at one in the morning. This did not happen last night. Someone very persuasive told every giver and every winner to keep it short, and they all did. Evenings like this, after all, compete with one another. A major politician or top flight journalist who attends such an event cannot simultaneously be somewhere else. Were I such a luminary, attending last night's event, the slickness with which the proceedings hurried along would reassure me greatly about attending again.

But, was it all worth it? What, really, do such events as this one achieve? What if it was just mutual backslapping? I was thinking something rebellious along these lines myself, even as I passed the time by taking photos of it all, but I was nevertheless surprised later to be asked that same question by ... well, let's just say, one of the people who had made one of those admirably succinct speeches. I will now offer a more extended version of what I said in reply.

First, there's no harm in just having a tribal get-together. What else is the Capitalist Ball? Nobody I know of complains about that, apart from all the people who are supposed to complain. At all tribal get-togethers, the tribesmen and tribesladies can get to know each other better and set up connections and deals of all kinds. So it was last night.

But second, yes, I think it is worth dishing out prizes. If you are, say, Dimitar Chobanov, think tanking away in Bulgaria, or if you are Tural Veliyev, associating free minds in Azerbaijan, then it must surely mean something if those oh-so-grand heart-of-Europe think tank commanders show that they truly rate you. If you are Atilla Yayla, painstakingly putting together a network of liberal-thinking intellectuals in a turbulent and, for these purpose, rather inhospitable place like Turkey, and some people in London in swanky suits in a very swanky building tell you that you are their "personality of the year", well, that's got to be better than a kick in the teeth.

Third, the process of awarding prizes adds discipline and snap to the ongoing conversation about which are the best think tanks and why. Award ceremonies force the judges to think better. What makes a good think tank? How do you get maximum bang for what in many places must necessarily be minimum buck? How, if you are in the think tank business, do you compete most effectively? We should all be thinking about things like that.

Fourth, there are those top-flight journalists and major politicians. If they come to a do like last night's and go away thinking that it was something, again, that has to help the cause. And remember, last night was not just a chance for us to bend their ears, but for them to reciprocate by telling us lot what they need from us.
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Microsoft - the competition hots up
27 NOV 2007 – The Globalisation Institute continues to argue that Microsoft is somehow a special case, and that mere customers can never escape its disappointments unless these are made illegal.

Microsoft has been doing a very good job of powering all but the fussiest people's personal computers for the last quarter of a century or so, and it has a lot of momentum. But to confuse this momentum with the claim that the vessel is entirely unsinkable, and that it may with impunity treat its customers indefinitely like so many press-ganged sailors who must sail with her until they die, is folly. In the short run, Microsoft is indeed still hugely profitable. But the now much-discussed travails of the new Vista version of Windows have made millions of people scared of Windows. People have always been scared of the cost of Macs, and scared of the plain dumb fact of Linux because Linux is an unknown quantity, but now the same applies to Windows.

The very same FT article which the GI links to, to explain that Microsoft must be disciplined by law if it is to be disciplined at all, puts it very well:

"In the short term, they'll get the money whether people upgrade or not," says Mr Silver.

"In the longer term, however, the disenchantment over Vista could take a toll. With sales of Apple Macs surging, particularly in some parts of the retail market, customers may prove less tolerant of the teething problems that accompany all new releases of Windows."

"... if Microsoft doesn't fix it, and fix it good, they're leaving the field wide open to Apple."

Economic freedom versus political freedom
21 NOV 2007 – I can't remember when it was, or where, but I have a distinct recollection of Nigel Ashford giving a typically clear and eloquent talk on the subject of political reform versus economic reform. Key word there: "versus". Ashford's central point was that political reform – he had in mind places like the then (I think) quite recently liberated-stroke-collapsed USSR – was all too likely to be something that happened instead of economic reform rather than something which tended to go hand in hand with it. Give people votes, and in troubled and uncertain times they'll vote for business as usual, but with just a few more state hand-outs, or at best for very moderate changes. Asking them to vote for determined free market reforms runs slap into the problem that has long been talked about by the Public Choice school of economists. The losers know straight away that they will lose and what they will lose. The winners don't even know that they will even be the winners, let alone how they might win. So guess how people vote when asked about radical free market reforms.

I was reminded of that talk while reading this article, which is about the current state of China. For in present day China we observe the exact opposite of the circumstances that Ashford had in mind. He feared that voters would stall economic reforms. In China, they don't get the chance. Time was when the government of China imposed the utter and catastrophic absence of the free market, but now the successors of the murderous and economically illiterate Mao impose a cautious but steady retreat from those earlier blunders, with similar, er, firmness, while continuing to suppress all notions of democracy.

But there are reforms and reforms. Yes China is now much more of a market, and is accordingly getting richer very fast. But, it is a market among thieves, whose thieving continues. Corruption is rife. The richest people in China now are not pure businessmen, but rather Party members and the sons of Party members.

Others point out that Chinese intellectual property laws are still far more honoured in the breach than in the observance, which will, they say, severely cramp China's intellectual and inventive development. But I suspect that this will change, just as soon as China's rulers decide that China must get inventive. After all, imposing IP laws is, well, imposing, and imposing is something that the Chinese government knows all about.

There is also reason to doubt whether the Chinese model will work so well in other despotic and turbulent places where so much hope is now being invested in it, as an alternative to all that unsettling democracy that the Americans are so keen on.

The obvious contrast is with India, where democracy seems constantly to threaten the economy yet which has now permitted it to grow almost as quickly as in China.

As always, the various rival systems will compete, in a competition that will never end.
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How can you tell what a monopolist is worth?
16 NOV 2007 – The TaxPayers' Alliance, fresh from their Inheritance Tax triumph, have now poked another hornets nest with their Public Sector Rich List 2007. High on their list of public sector fat cats is one Stephen Carter, of whom the Sunday Times has just written:

WHEN Stephen Carter ran Ofcom, the telecoms and broadcasting regulator, he kept a life-size poster of Michael Caine, star of the British gangster movie Get Carter, behind his office desk.

The £90m building bulges out of London's riverside next to the site of the Rose Theatre where Shakespeare once trod the boards.

Today it is revealed as the epicentre of the public sector "fat cat" world. Ofcom has no fewer than 11 executives in the top 100 of a new "rich list" of public servants produced by the TaxPayers' Alliance.

In a competitive market, there does exist a rough and ready way of deciding these things. Who makes the most money? Which is why the often far greater rewards of commercial success have a crude justice about them. If you think you could do better, well, try. But with these Ofcom operators, it's anybody's guess whether they earn their money, because, although these particular guys are in charge of encouraging competition, they themselves don't have any obvious competitors. What is certain is that, compared to (as the Americans say) average working stiffs, they are making tons of money, and as such are obvious objects of envy and of voter resentment. These are not your regular civil servants, working their way up the public service pecking order. They are paid far more than that, and their background is political rather than civil service.

It doesn't help, as the Times writer knows, that these Ofcom-ers live in such a photogenic building, which happens to be one of my recent London favourites. For a spookier take on it, go here. It all adds to the impression of a new class, of the sort that Peter Oborne has recently written about, of a new metropolitan version of the old squirearchy, who, instead of owning land, own jobs and offices. The impression is easily created by canny operators like the people who run the TaxPayers' Alliance that the point of these jobs is not the doing of them but the getting of them, not the encouragement of commercial competition, but the rewarding of a quite different sort of competition, the political sort.
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The perils of politics
05 NOV 2007 – Small high street shopkeepers in Britain's provincial towns hate supermarkets, the reason being that the mere people in these towns, when offered the chance to shop in supermarkets, tend to prefer them. They find it more convenient to buy lots of stuff in one trip, instead of trudging laboriously up and down the high street paying higher prices in more places.

This was the background to a big campaign that has been going on in Britain against the big supermarkets in general, and against the biggest one of the lot, Tesco, in particular. There's even a book, Tescopoly, all about how evil Tesco is. When the Competition Commission decided to investigate supermarkets, the small shopkeepers thought they smelt blood. Now Tesco would get its comeuppance.

The smaller shopkeepers did get a few recommendations of the sort they wanted, but on the whole this inquiry has been a major setback for them. The Competition Commission's overall verdict is what you might call anti-anti-Tesco, which under the circumstances is very good for Tesco indeed.

Says this Financial Times report about the findings of the Competition Commission:

There is no evidence, it says, of unfair competition between large grocery retailers and small stores. Large retailers do not always get the best price from suppliers, and do not use below-cost selling as a predatory tactic. Most controversially, the commission states that Tesco is not in such a strong position that other retailers cannot compete.

This is not, to put it mildly, going to make life any easier for those high street shopkeepers. This wasn't what they had in mind at all. As the Financial Times concludes:

Smaller town-centre operators may, in fact, suffer more from the proposed changes to planning regimes than the large chains. This would be ironic, considering that they were keenest on the inquiry in the first place.

Liberty speakers
29 OCT 2007 – I have just finished attending Liberty 2007, the Annual London Conference of the Libertarian Alliance and the Libertarian International, and there were some very significant and classy speakers.

Matthew Elliott of the TaxPayers' Alliance spoke, about the need to craft pro-freedom and pro-free-market policies that will appeal to politicians, on account of those policies being popular. (The political coup that he and the TPA contrived with regard to Britain's Inheritance Tax was no fluke, in other words.)

Alberto Mingardi spoke, about his work in establishing the Istituto Bruno Leoni in Italy.

Syed Kamal spoke. Syed, one of London's MEPs, is one of the most determined proponents within the Euro-machine of the principles of liberalism and market competition, both for economic relationships within the EU and for relationships between EU citizens and people elsewhere. Don't think of "competition in financial services", he said, as one fat bastard in a plush tower talking down a phone to another fat bastard in another plush tower. Think of it as a farmer being able to get that tractor he needs, because he can look beyond his deeply unsatisfactory local bank for the loan to pay for the tractor, to a foreign bank that is more honestly and capably managed and which won't charge him an extortionate price for the loan. Competition in financial services equals global economic development. Syed also shared a delightful childhood memory of how import controls in Guyana, the country of his birth, had turned his deeply respectable aunt into a potato smuggler.

Leon Louw spoke, about the sea (picture of him in action here). Two thirds of the earth is under water, so it is absurd to talk about a water shortage. Louw speculated that maybe the problem is that there the word "water" is used to describe two different things. There is the unprocessed raw material, which is ludicrously abundant. And then there is processed water, drinkable water, water we can wash with. That, in many places, is in short supply. Louw's proposal for dealing with such shortages is that water should be owned and traded, just as land and its products are now. No fancy new technology is needed before this can start. That's for water entrepreneurs and sea farmers to worry about and sort out amongst themselves.

Various others spoke, and my apologies to all whom I have neglected to mention. I spoke, so no need to apologise to myself, about the Total Surveillance Society, and then again (as a late substitute) about whether Anarcho-Capitalism would or would not degenerate back into statism.

Perry de Havilland spoke, but not from the platform, just with the occasional comment and/or question from the floor. But such is the magic of blogging that you can now read this excellent piece posted on Monday morning by him about how Russia is suppressing competition in high technology, not between Russia and elsewhere, but within Russia. Worried about the strength of the Russian economy? Relax. Want Russians to do well and to stay out of mischief? (I do.) Be afraid.
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The EU treaty and what Britain's voters will do about it
23 OCT 2007 – "EU treaty threatens Thatcher revolution" is the ambiguous heading above this Daily Telegraph piece.

A chorus of EU trade experts have warned that the downgrading of competition to second-tier status will make it nearly impossible to police the EU single market and prevent politicians stopping foreign takeovers. "It is the first step towards disintegration," said Mario Monti, the EU's former competition chief.

The goal of achieving a "high level of employment and social protection" will have a superior legal rank, obliging the European Court to rule in favour of social rights whenever they clash with free market goals.

This may enable trade unions, Left-wing parties, and advocates of the Rhineland social model to push through an agenda that effectively rolls back the Thatcher revolution through court rulings.

What the British notice are bad things that are already happening. For example, in recent years Britain's Inheritance Tax has risen hugely, simply by the tax rate remaining the same but the price of the average British house shooting through the roof. So, when Mr Cameron (Conservative) and his cohorts recently proposed a sharp rise in the level at which an inheritance would be taxed, and when Prime Minister Brown (Labour) and his cohorts then copied this policy, but rather half-heartedly, thus managing to look both weak and like they really preferred this tax to stay high, Conservative popularity rose sharply and Labour's fell sharply.

In short, British party politics may have undergone a sea change. Whereas for the last decade Labour has been united behind the notion that taxes should be high but stable and Conservatives divided between that proposition and thinking that taxes should fall, now we are back to a world in which Labour is divided about whether taxes should rise, and the Conservatives are united in thinking they shouldn't. I am amazed that Mr Brown has allowed all this to happen, and he may yet have the sense to correct this potential disaster for himself and for his party.

By the way, the Conservatives have the TaxPayers' Alliance to thank for this transformation in their fortunes. They were the ones who spotted how deeply unpopular Inheritance Tax had become.

But my point is, Britain's voters will only come to the aid of Mr Monti and help him to impose a Thatcherite revolution on Europe if they conclude that the absence of such an arrangement is costing them a lot of money, now.
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False and true competition for Microsoft
05 OCT 2007 – The Globalisation Institute has recently moved from London to Brussels, and perhaps partly in order to attract a good healthy dose of attention, it has recently announced that it agrees with the European Commission about Microsoft. This is a canny move. It establishes the GI as an organisation which thinks about things, rather than one that merely spouts the pro-free-market orthodoxy to the effect that all interference in business is bad. On the whole the GI does say that interference in business is bad. The GI can't make much difference to what happens to Microsoft, but it may have impact in the future, on issues where minds are still being made up. So, like I say, smart move.

But I think the GI is wrong about Microsoft. We here all say that if consumers are content to keep on buying Microsoft Windows, complete with all its evil free extras, and with all its non-interoperability, what's the problem? What matters to most computer users is: Will my computer work? Talking about interoperability is like saying that motorists want to choose their tyres, when all that motorists actually want is that their cars go. Imposing interoperable tyres might make the tyre business more competitive. But it would discourage business in general, by making it that much more likely that the EU might descend upon other businesses and impose equally arbitrary demands and costs, in connection with "interoperability" and with who knows what else.

It so happens that some Microsoft Windows users are even now discovering that their computers won't work. The latest version of Windows is called Vista, and it's a disaster. Technofreaks say that Vista is evil because it contains "DRM", which is an attempt to stop illegal downloading and illegal copying. But there is a far worse Vista problem than that, which is that Vista tends to crash. Many customers are demanding that their new computers have the previous version of Windows installed rather than Windows Vista, and users of the previous Windows are hanging on to it and not upgrading to Vista. Now that's competition. It turns out that Microsoft is not any sort of monopoly. Its most deadly competitor is: itself, six years ago. And its second most deadly competitor is the Apple Mac, whose sales are surging.

Changing the subject, here's another story -about mobile phones which you can use cheaply all over the world - where the EU Commission has been interfering like crazy, but where the market is now showing itself well able to solve the problem.
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Risky Business
24 SEP 2007 – For my money, which luckily for me has not been entrusted to Northern Rock, or worse, invested in Northern Rock, Guido Fawkes asks the right question and gets the right answer. Question: why the Northern Rock bail-out? Answer: politics.

There is a lot of guff talked about the virtue of economic risk taking. Yes, doing anything big and important in this world is an inherently risky thing, and wise entrepreneurs know this. But they do not deliberately take risks just for the sake of it. And in a properly competitive free market economy those who behave too riskily can get severely punished.

Unless, that is, the state steps in to try to rescue foolish investors from the otherwise natural consequences of their folly. (As Guido also points out, Northern Rock's troubles have long been known about.) One day, the Governor of the Bank of England was saying that "… the moral hazard inherent in the provision of ex post insurance to institutions that have engaged in risky or reckless lending is no abstract concept", and a day later he was providing morally hazardous ex post insurance pay-outs to Northern Rock. He was leaned on, says Guido. (Asked the wife of this blogger: Will they have to wait four working days for the money to reach them?)

But if the idea of this bail-out was to smooth everything over and get this story out of the news, it has failed, at any rate for the time being. "Bank of England bail out" headlines have sent savers scuttling to their local Northern Rock branches for form photogenic queues, and over the weekend to their computers, to extricate their money. Worse, newspaper stories are appearing with headings and subheadings like these, from the Observer:

Fears grow for British economy as panic over Northern Rock spreads
Experts warn that a decade-long borrowing binge has left Britain dangerously exposed to the fallout from the global liquidity crisis

But this Northern Rock mess is different. Gordon Brown was the Chancellor of the Exchequer for precisely the decade during which that "borrowing binge" happened. Did he have nothing to do with it? Did he perhaps cause it? If not, why did he not try harder to prevent it? This is not like Iraq. If fears do indeed grow for the "entire British economy", rather than just for the savings of a lot of northern Labour voters, then Gordon Brown is going to have a tough job to explain that this is nothing to do with him.

What would I do about all this? I'd open up money itself to the benefits of competition.
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Seymour Cray and the markets for computers
11 SEP 2007 – During the last couple of months I have been easing off on the blogging, not just here but elsewhere, and have instead been listening - more exactly, reading - what others can tell me, and not so much by reading stuff on the internet, more by reading books. Remember those?

Just now I am reading a book about Seymour Cray, the father of the supercomputer. (I do love remainder bookshops!) The point about supercomputers is that they are, as this book puts it, "scorchingly" fast. They are not like the computer I'm using now, which is designed to be useful for lots of different mundane tasks, such as writing these blog postings and emailing them in, for fooling around with photos, for internet searching, and the like. No, what a supercomputer does is just one thing, really, really fast. One thing, like: work out what thermonuclear explosions are like without having to keep staging them, or how the universe has evolved using the Big Bang, or what the human genome consists of, or cracking a military code or forecasting the weather. Tasks like that required a completely different kind of machine to the lumberingly slow but relatively responsive and communicative business computers that were also emerging when Seymour Cray was first getting into his stride, for doing things like company payrolls.

The thing is, it is often not obvious exactly what a market is, or to put it another way, what markets there are. Seymour Cray's insight, among many others, was to realise that there were two quite distinct computer markets out there. There was a small but money-no-object market for a very few supercomputers of the sort he was determined to build, for military use, for university science departments and the like. And then there was the much larger market for competitively priced, useful, adaptable, user-friendly and quick-enough-to-be-getting-on-with computers of the sort that you and I now use in our daily working lives, unless of course your work consists of doing something like modeling thermonuclear explosions. Cray understood that these two totally distinct kinds of machine should be made by separate groups of people, in accordance with quite distinct engineering and programming priorities. (Cray's supercomputers, for instance, required elaborate refrigeration systems to enable them to be scorchingly fast without actually scorching themselves to death.) There were two markets. Cray had huge corporate fights with people who thought there was only one market, and that he was doing it all wrong. Then, they reckoned he was in the wrong market. Eventually, Cray went off on his own.

None of this could have happened in an uncompetitive economy, an economy that offered Seymour Cray no alternatives and hence no bargaining power. Nor would it have been nearly so easy in an economy, such as Europe's, where politicians and regulators tend to want to understand markets before anyone else can get seriously stuck into them. As it was and just as a for-instance, thanks partly to Cray's supercomputers the US government felt able to sign a nuclear test ban treaty, no less, with the USSR. Why? Because, thanks to Seymour Cray, it didn't need to test nuclear bombs any more. It could just run the explosions on a supercomputer.
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The rules for schools
12 JUL 2007 – A couple of years ago I tried being an occasional volunteer one-to-one teacher, in a London state primary school near where I live, but after a year I gave it up, basically because I didn't feel that I was achieving anything. But I have now resumed this activity, at one of the supplementary schools run by the New Model School Company Limited, which have been set up by the London Think Tank Civitas. This time, I am more optimistic.

The difference between these two schools is that whereas with school number one the best kind of parents were merely hoping for the best, at the second school the best kind of parents are paying for it. They are motivated and so are their children. As for the children of less motivated parents, guess what: they're not there. If any children misbehave, the parents are informed and it stops, the mere threat usually sufficing. If it didn't stop, other parents would complain and the whole school would fail. The expulsion threat is rarely invoked, but it is there. The children behave respectfully to the staff, even when dealing with a bottom-of-the-pecking-order oddity like me. I try to reciprocate by always teaching worthwhile things to the individual children allocated to me.

At that first school, far more capable, energetic and experienced teachers than me were being defeated. Children could not be expelled no matter what they did, nor could they be hit, nor could they be put in solitary confinement, with which latter two rules I heartily agree. So, no matter how good a teacher you were, the children were basically beyond control. I can still remember the helpless and demented screams of the teacher that emanated from the classroom next to where I operated. I had it easy by comparison. I was only being tyrannised by one child at a time, for a couple of hours a week. This poor woman was at the mercy of an entire room full of the little monsters, day after day. The thing is, these kids were not actually monsters. They were perfectly nice, healthy, sane little human beings. But the rules turned them into monsters. The rules are the difference between the old bad state school, and the good Model School.

What will not make a difference is trying to drown bad rules in bank notes. That first school was crammed with books, computers, vast screens. It had a lavish gymnasium, splendid carpets. The supplementary school is a physically denuded slum by comparison. It's just a big room with tables and chairs in a housing estate, and there is only one cupboard containing only a few books. But, they are good books, written by people who know how literacy and maths are effectively learned. Doubling the number of bad and unread books and superfluous computers in a school governed by stupid rules will improve nothing.

We are told that Britain's new Prime Minister is keen on competition. He ought to put two and two together and realise that much of what he says about the economy should apply also to schools. But, for him, competition is one thing, and education is something else.
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What is Sarkozy thinking?
28 JUN 2007 – The newly installed President of France, Nicolas Sarkozy, made lots of headlines with his attempt to expunge "free and undistorted competition" from the objectives of the EU in the outline of the constitutional treaty. Alex Singleton, writing in the Globalisation Institute blog about this semi-successful spoiling action (they put those words back but not where they originally wanted them), describes Sarkozy as a curious hybrid. (By the way, Alex Singleton's Globalisation Institute is soon to move to Brussels. Do I smell competition?)

I recently recorded two conversations (here and here with my bilingual friend Antoine Clarke about the recent French elections, and I now understand Sarkozy rather better than I did when I wrote this posting.

Basically, every free marketeer in Britain who doesn't hate France, and there are quite a few of us, has been hoping that Sarkozy will do for France approximately what Thatcher did for Britain, namely rescue it from the sort of economic decline where the only argument concerns who and what is to blame, and replace that with circumstances where nobody can agree whether things are getting better or worse or what.

But Antoine talked not so much of Sarkozy imposing different decisions, but rather of him wanting different people to make the decisions. Sarkozy is something of an outsider, the son of a Hungarian immigrant who got to the top the hard way rather than having been born into the Enarque class. And he wants France to be ruled by people who are less theoretical and literary and out-of-touch, and more technical and scientific. So maybe a better British parallel might be not Thatcher but Harold Wilson, Britain's Prime Minister of the 1960s, who also wanted a transformed elite, who knew more science and less Latin. (Latin was the British equivalent of French literary theory, although it tended to make more sense.)

Like Harold Wilson, Nicolas Sarkozy prides himself on being "pragmatic". He does what he thinks will work, regardless of where ideologists like me or Alex Singleton or Antoine Clarke would map it on our charts. Workers will pay no tax on any hours they work per week beyond thirty five. (Has he been reading this?) That's some tax cut! On the other hand, he wants a French version of Islam funded by the French state, to crowd out the Wahabi version of Islam that has been so tiresome of late. Which is, well, not a tax cut. More like rampant statism. But: whatever works. Antoine also told me that Sarkozy has been in regular touch with Tony Blair's people in London. "Whatever works" is one of their war cries too.

The trouble with "whatever works" is, to summarise heroically, that it often doesn't work very well. Ideological principles, the right ones, are often essential to avoid sliding into non-creative entropy. But that's a different argument. See, as I often like to say in these things, the rest of this blog.
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Two new competitive heroes
18 JUN 2007 – If Lewis Hamilton ends up winning as many Formula One motor races as Michael Schumacher did it will get very boring, almost as boring as when Schumacher actually was winning. But as of now, Hamilton, having scored five Formula One podium finishes in his first five races, and having followed that with his first two race wins on two consecutive North American weekends, the first in Montreal and the second, last Sunday, in Indianapolis, is at the centre of a tornado of attention.

Formula One has been trying to persuade Americans that it is the ultimate in car racing for as long as I can remember, but the only detail of this attempt I can really remember until last Sunday was the 2005 US Grand Prix, which was one of modern sport's great fiascos. Only six cars took part, all the others having withdrawn for some damn fool reason involving tyres and tyre safety. Who won? Schumacher of course, but it was one of those days when nobody really won, because Formula One as a whole lost so badly.

Hamilton is actually rather like Schumacher, and the McLaren team that he drives for apparently used computerised race simulation devices to eliminate any weaknesses and emotion-based bad habits or reactions from his driving, honing it to a state of perfection, rather as fighter pilots are presumably prepared for their even more fiercely competitive duties.

Hamilton will be a huge help in getting America to love Formula One, much as Tiger Woods earlier got America excited about golf, and a huge bonanza for McLaren's sponsors, because, although not an American, he is, by American reckoning, and again just like Tiger Woods, black. And father Hamilton performed miracles of year-on-year round-the-clock self-sacrifice to finance his son's racing ambitions.

Although they might not want to say it too loudly or in unchosen company, many white people suspect that black men may not be up to winning the fastest and most competitive car races. Germans yes, but black men, not really. It's not that black men can't be this cold and calculating and ruthlessly competitive and emotionally under control for lap after lap, more that they don't seem to want to be like that. But Hamilton does, and his dad helped him to be like that. Dads are supposed to teach their sons to compete properly, and to control their emotions instead of being controlled by them, but not enough dads have been sticking around and doing that lately. So Hamilton and his dad, for all that they are British, make fine all-American heroes. For now, they are heroes everywhere.

That's if Lewis Hamilton can now live up to his early promise. The competition never ends, and the world's media men are poised to put him down if he falters. Hamilton has won two races, and although he is on course to win this year's championship, he has yet to win this prize even once. Schumacher won ninety-one races, and the Formula One championship seven times.
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The market will itself impose rational mobile phone prices
11 JUN 2007 – Buried deep in this blog posting from several weeks ago is a fascinating argument, which takes the form of a personal memoir about how the writer (my good friend Michael Jennings) is engaged in what he calls arbitrage, but which might equally well be described as asset stripping, for his own personal benefit.

The assets in question are mobile phones and mobile phone use, which Michael knows a lot about. He has noticed is that if he purchases these things with care he gets pretty much everything he wants in the way of mobile telephony for next to nothing. Here is a company which more or less gives away the phone, but then charges a massive amount for its use. Another company charges a lot for phones, but little or nothing for certain kinds of calls. Another company charges nothing for other types of calls. By signing up to lots of package deals, a phone for nothing here, and calls for nothing there, and by using his various phones and phone arrangements in a disciplined manner, Michael has been able to contrive mobile telephony for himself at virtually no charge. And by watching what other people are selling on the internet, Michael has been able to observe others doing the same kind of thing.

All of which is important for him, because Michael doesn't just do mobile telephony with his various mobile phones. He also uses it to do computing and internetting while on the move, preferring to use a mobile phone connection plugged into his laptop, rather than WiFi, which he finds patchy, expensive and unreliable. Although this is not the point of this posting, it is of interest that Michael foresees the whole world moving that way, switching from WiFi to mobile phone connections for computers on the move.

The relevance of all this to arguments about competition is that mobile phone companies do not need EU Competition Commissioners to impose sensible prices on them. The market will in due course do this automatically, in the form of people like Michael, who by doing what Michael is doing and by telling their friends about it, will make it impossible for mobile phone companies to do anything but charge sensible prices.

That, though, is the problem with phone companies. They are so inept that they don't realise the best way to operate is to simply provide services at costs plus a margin. They will, eventually, thanks largely to arbitrageurs like me forcing them to.

There's no need for EU competition bureaucrats. Leave it to Michael Jennings.
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Sky TV - the offence of winning
04 JUN 2007 – The key paragraph in this report in the Independent is surely the one that says this:

Under the new Enterprise Act, Ofcom will no longer have to find Sky guilty of an offence to instigate structural change in the market. If, at the end of the consultation phase with the industry, the regulator concludes that market imbalances exist, it will try to come to a settlement with Sky.

Rupert Murdoch's empire has always had a cosy relationship with the British government but with a new hand at the till, this protection might just disappear.

Sky TV, for the benefit of those unfamiliar with the British pay TV market, is the biggest pay TV provider in Britain. For about forty quid a month, you get the best in new movies and sport (which is what most people care about), and more than adequacy in everything else (i.e the news, comedy, documentaries, etc.). Or pay less, and get less. They have various deals. And, despite having committed no offences, Sky TV has in fact committed the ultimate offence, even worse than the offence of being friends with the ex-Prime Minister. Sky TV has done too well.

As you get older, more of the sleaze in the world becomes apparent to you, and you can sometimes mistake this learning process for a deterioration in the world itself. But despite that, I really do think that my country is, just now, becoming somewhat more sleazy. I attribute this to the proliferation of rules and of regulators. As the rules pile up, eventually all that remains is regulators, regulating entirely as they see fit, or as they are persuaded to see things by those who appointed them and upon whom they depend for further preferment. A world in which a major company commits no offences that anyone is prepared to discuss in public but can still be smashed into pieces by the government is not a good place to do business in.

In particular, my country is becoming somewhat less competitive. This is because, thanks to our competition laws and competition regulators, the ultimate purpose of the competitive process for those who participate in that process, namely the process of actually winning the competition, is now coming to be regarded as an offence against competition. Winning, by its nature, is cheating.
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It's not fair!
29 MAY 2007 – There is something exquisitely Chinese, in a nineteenth century sense, about this:

German Foreign Minister Frank-Walter Steinmeier said Europe sought fair competition.
"Asia is a region of tremendous economic dynamism, from which German and European business also benefit greatly," he told the Hamburger Abendblatt on the eve of the Hamburg meeting.

"But I also want our competition to be fair ... this means we cannot have jobs being shifted from Europe to Asia simply because we insist on high environmental and social standards here which are not respected in other parts of the world."

It is easy to scoff at Mr Steinmeier, as I have just demonstrated. (It took me about two minutes to dash off that last paragraph.) But to be fair to him, as I am quite content to be, he does at least understand how reality is shaping up. In the longer run, the important thing about this ludicrous pronouncement, with its ridiculously deluded demands, is surely its more sensible other bits, the bits where he says what is now happening. Mr Steinmeier wants Asia to pass a supertanker full of laws and regulations just like the ones they already have in oh-so-civilised but oh-so-static Europe, to make Asian economic dynamism illegal. But at least he has twigged that it is Asian dynamism that is his problem. And once he has worked out that this cannot be switched off just because he and other Europeans like him say so, more serious thinking about how Europe should respond to the competitive threat posed by Asia can get under way. The next step, in other words, is for the unthinkable to start being thought about.

I have never believed that Europe would turn to the free market merely because free marketeers like us CNE bloggers finally persuaded its rulers of our rightness and their wrongness. Economic freedom means economic dynamism, and economic dynamism is barbaric. This is and will remain the attitude of Europe's rulers. But if they find themselves staring economic catastrophe in the face, then the barbarities of economic freedom will have to be faced, even embraced.

This, after all, is why the West Germans decided to have their German Economic Miracle, in the years following the Second World War. It wasn't that they especially approved of economic freedom. They merely preferred it to destitution.
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Collusion and competition in the air
21 MAY 2007 – Does British Airways still proclaim itself the world's favourite airline? It's certainly not my favourite. But I do sympathise with them about their latest difficulty. They stand accused of price collusion:

British Airways has set aside £350million to pay possible fines and compensation bills after a price-fixing scandal in which it admitted breaking competition rules.

The airline said the sum was its 'best estimate' to cover potential claims stemming from the revelation last year that senior staff had discussed long-haul fuel surcharges with rivals Virgin Atlantic.

The UK's Office of Fair Trading and the U.S. Department of Justice have been investigating alleged price fixing on long-haul fuel surcharges since June.

I can understand how this conversation might be news, but I don't understand nearly so clearly why it's illegal. If customers feel that a price cartel is being put together, then they should be able to go elsewhere for their travel arrangements. If they can't, and if nobody can even enter this market and bust up this cartel, if cartel it be, then that is what the politicians should be looking at. They should be allowing competition to happen, for instance by allowing airports to auction landing slots instead of such slots merely being "allocated". They should be asking why price competition doesn't happen spontaneously. When collusion does happen, why isn't journalism sufficient to solve this problem by simply publicising it? Why involve the law?

If you want to know what a truly competitive airline is like, you need only look at Ryanair, which is run by the ferociously competitive Michael O'Leary. O'Leary is a self-publicist of genius, which is one of the many ways in which he cuts his costs and keeps his prices down. He spends hardly anything on advertising, because whenever he has anything to say, the newspapers will print it and the broadcasters will broadcast it for free.

O'Leary rails at public officials, calling them greedy, even "overcharging rapists." A millionaire many times over from his business success, he plays the underdog Irishman with a chip on his shoulder. "Imagine, the Paddy airline surpassing British Airways," he said with a gleam in his eye.

A tale of two laptops
17 MAY 2007 – The idea of a hundred dollar laptop has been rattling around the Internet and the world for some years now, courtesy of someone called Negroponte. But now this constantly postponed and probably illusory machine has been replaced by something else, the ten dollar laptop, which will, Real Soon Now, be made in India.

A meeting of industry and academia is to take place in IISc, Bangalore, later this month to go through the two designs and invite more suggestions. Simultaneously, HRD ministry has been told by Semiconductor Complex, a Chandigarh-based PSU, that it would like to be part of the project. HRD ministry wants the company to get involved in the fabrication of laptops.

Sources say it would be another two years before the laptops become a reality.

First, there is that dramatic drop in price. For all that these are two fantasies that are being compared, that ratio seems about right in terms of real world prices. Just as Negroponte's fantasy laptop points to reality laptops which cost only three hundred dollars, so, I am sure, this Indian scheme reflects the fact that Indians will very soon be making laptops for thirty dollars, or thereabours, for real.

Second, the motive of the Indians is not to be charitable towards the Third World. They are the Third World, or they used to be when that expression still made sense. Their motive is to make a Volkscomputer for themselves, not for foreigners whom they pity. This is a great improvement.

Nor are the Indians trying to be charitable towards richer countries, come to that, but speaking as a rich person, if that's what I am, I'd really like one of these laptops myself. For basic writing and for looking at photos, cheap enough for me not to mind it being stolen or left somewhere.

When such an ultra-cheap laptop does materialise here in Europe, it will be the tip of a whole new iceberg of seriously cheap products, made for local markets in India or China, but eagerly purchased also by rich people who want to stay rich by not spending any more than they have to on their toys. Negroponte is obviously going to feel that he has lost a competition here, but the rest of us stand to benefit hugely.

Just think of the benefits of seriously cheap computers, so seriously cheap that someone like me will be able to afford to have several of them, like I already have three DAB radios, one for each room.

There are links to more of the Negroponte laptop story here which is also where I first heard about the Indian laptop.
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How Scotland and England might soon be competing
11 MAY 2007 – It will be a while before Scotland becomes an independent nation state - or as near to being an independent nation state as it is possible for a nation state to be if it is part of the EU. But, following the elections earlier this week, the independence of Scotland is starting to look only a matter of time. The SNP, the Scottish National Party is now the