Arasmus

Nature’s Changing Course

Posted in History by Arasmus on August 31, 2006

Last night I watched an inspiring documentary by British historian Michael Wood entitled, “In Search of Shakespeare.” With his characteristic passion and enthusiasm, Wood transports the viewer to Shakespeare’s world – that of a young man navigating an unlikely destiny through the treacherous waters of Elizabethan England. How delicate fate seems when viewed in episodes. England’s official religion changed four times in just twelve years and when Elizabeth I ascended the throne, Europe must have viewed her arrival as we do that of a gold-braided general in some dysfunctional banana-republic. William Shakespeare, a country boy from Wiltshire, a married teen with a pregnant wife and still living with his parents. But a chance wind that scattered the superior Spanish Armada and a chance murder of an actor in a traveling theatre group would afford both Elizabeth and William their respective shots at history.

Shakespeare has always occupied a special place in my mind, an exciting realm, at once bucolic and lethal, much like the England of his time. Wood’s documentary transported me to that inner domain, its deep ancient soils and fertile imaginings in stark contrast to the grey urgency of the modern world. My Grandfather first introduced me to Shakespeare as a very young boy and in doing so populated my thoughts with a world of images – the walking woods of Dunsane, the mad prince, the foolish king and the wise fool. At night I used to listen for Lady Macbeth outside my bedroom door, her insomniac pacing, whispering, “wash this filthy witness from my hands!” Later I found an old photograph of my Grandfather, dressed in chain-mail and I was agog at the thought that he had somehow met Lady Macbeth! I was hooked. The iambic pentameter and the unfamiliar English contributed to the fascination. I always knew what they meant even though I didn’t always understand what they were saying. Like an old Greek myth it touched some older part in me. Then came school. We studied Romeo and Juliet, Julius Caeser and King Lear. Today I file my childhood memories within the pages of Shakespeare’s plays. Like old English law books organized according to the reigning monarch, my awareness at different points in my childhood is filed under whatever Shakespearean play that we were studying that year. When I think of Julius Caeser I can recall what it felt like to start secondary school, King Lear guards the memories of my preparations for university. Romeo and Juliet was completely destroyed for me by a rote-learning nun who knew less about passion than she did about art. Macbeth and Hamlet were the mast and main-sail of my awakening. Shakespeare seemed to me to have that divine knowledge, that ability to appreciate both sides of the coin; the self and the not-self, the joy and the sadness, the glory and the pointlessness of all glory. I wondered what had he done and where had he been, to have accumulated such knowledge.

How wonderfully accidental then is this life. Darwin and Hegel have influenced us, unintentionally no doubt, to think that there is some pre-ordained logic to it and that history has some rhyme and reason. But this secular transcendentalism masks the truth that its all just a sloppy mess of order and random chance. Two drunken actors fall out of an alehouse in Elizabethan England, one kills the other, and a new player takes his place. The player dips a feather in ink and 400 years later my world is changed.

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Got Acorns?

Posted in Anthropology, Economics, Technology by Arasmus on August 24, 2006

If you like what you do for a living then you should be worried, that is unless you are a pervert. Let me explain. Wired Magazine recently published an article about “crowd-sourcing”. In it a professional photographer described how competition in his business had become overwhelming, given the proliferation of high quality photographs on online databases ranging from iStockphoto to Flickr. The article started me thinking about what sorts of other markets might be vulnerable to crowd-sourcing.

At the outset, the most vulnerable markets are those for products that have a low marginal cost of production and by that I mean that the cost of producing one additional unit of the product is low. Thus, for example, Apple has probably spent millions developing OSX, but once developed, the cost of making a copy of the operating system is nothing more than the cost of burning a copy of the program onto a DVD or putting it on a website for consumers to download. “Digital products” such as software, e-books, music and photographs easily fall into this category. The markets for these products are vulnerable because the low distribution cost allows anyone in the world to easily sell these products to anyone anywhere.

But fixed costs or semi-fixed also have a role. If fixed costs are too high then a market will not be vulnerable to crowd-sourcing. The difficulty or cost in developing the Google search algorithm ensures that there is not a cottage industry for search algoritms. If fixed cost is zero then no one is willing to pay for the product because it has little or no value or it is just as easy for the consumer to make it themselves – e.g. the market for people to set your alarm clock. However if fixed costs are falling then a market may become vulnerable to crowd-sourcing. Fixed costs fall when the price of the means of production falls. For the purposes of crowd-sourcing I want to focus on the cost of labor which can be more of a semi-fixed cost than a variable cost depending on the labor market and regulations. The cost of labor is the price at which a worker is willing to sell utility or alternatively buy disutility. Returning to the example of photos – “workers” are willing to sell photographs for very little because they actually get utility rather than disutility out of taking them. This is all fancy language for saying a much more simple proposition which is that people are willing to work for less if they enjoy what they are doing. If technology can increase the utility a worker gets from their job then the salary for that job will fall because more people are willing to do it for less.

The film business offers an interesting example. Back in the 1930’s making a film was beyond the ability of the average Joe – i.e. it was hard work and you had to pay people to do it – indeed you still have to pay people today. However, technologies such as iMovie and high quality video cameras now allow you to make films that would have amazed audiences in the 1930’s. Indeed, film-making has not only become feasible for the average Joe it has become fun – in other words, for some portion of the workforce, making films has gone from being disutility to utility. As a result, you have television programs such as America’s Funniest Home Videos that show hours and hours of videos that cost them nothing because the people that made them enjoyed doing it. The internet is full of video footage and even independent films that you can consume for absolutely nothing.
What’s the bottom line? If you enjoy what you do and if other people would enjoy doing it too – be afraid. If you make a digital product – be very afraid. The world is full of people who want to have just as much fun as you and you will get to exchange Cyworld acorns with them on the one-way train to the badlands. Only those that enjoy what others do not enjoy will survive and the richest of these will be the most perverted. Quel change?