Where next, Microsoft?

Apple is a retail aggregator. They own client details of customers of thousands of retailers including over 500-million active credit card numbers. Google sells highly targeted advertising, and gives away stuff in the cause of crowdsourcing their target database. Amazon sells scalable infrastructure, prototyped by building an unprofitable web bookstore.

Microsoft sells software. and is trying to figure out what Apple got right in 1977, forgetting that’s not actually what made them successful. Buying Nokia doesn’t fix that.

Apple, Google and Amazon have a lot in common – highly scalable infrastructure, a market that relies on massive net outreach, and a rapidly evolving product line. But they are not really in the same business.

Microsoft needs to stop thinking of itself as a desktop software supplier, and find a new niche that works for the post-PC world. Owning Nokia’s handset business may be a step in that direction, but they need to change their thinking radically to get there.

Apple had it easy in a way: their computer business was never going to take off in a way that would make them a market leader, so inventing new niches that attacked the economics of their old market was not a show-stopper. Microsoft, on the other hand, has to worry about such things as what a $10 version of Microsoft Office on the Surface (or Android or iOS) does for the credibility of their desktop pricing. That doesn’t mean Microsoft has no options – but an option that looks like Windows on a phone isn’t a good one.

There’s a huge wide open world of opportunity out there for anyone who can operate at scale and can connect with the mass market. That’s their challenge: to find such a connection.

Black Economic Empowerment: What Went Wrong?

I’m all for black economic empowerment. What’s the alternative? A society where most are miserable and have neither prospects nor hope is not a friendly place to live. The haves live in cages. The have-nots rattle the cages, when they are not too hopeless to do anything. So why has BEE not delivered?

A huge part of the problem is the ANC’s top-down approach, strangely similar to Reagan’s trickle-down economics. Like Reaganomics, top-down BEE doesn’t work. In the US, the already rich became richer. Here, equality ended when we equalized the number of billionaires.

In a stark example of what’s wrong with BEE, I recently read an application for a gambling license for a small Eastern Cape town. The application in effect said, “This town lacks the economic base to sustain entertainment businesses, so we are filling the gap by offering the community drinking and gambling.” If you sit back and think about this, the notion is pretty obnoxious. A town that lacks the base of disposable income to support entertainment would, you’d think, not be able to support the proposed business – unless its clientele spend money on drink and gambling that’s not disposable income. In other words, they go home broke and the family doesn’t eat that week.

That though is not my main point about this proposal. One of the “key persons” listed is a car factory production line employee who is interested in getting into the gambling business.

Why would someone with no relevant experience be a “key person”? Because of a BEE requirement for earning a license. So why is this bad?

A black person who already has a job and therefore is a lot better off than the average in a poor province stands to get rich. Many other black people, should the application and similar ones for other poor towns be granted, stand to move from poor to destitute. How is that black economic empowerment?

But it gets worse. Why has the gambling company nominated someone with no relevant experience? Because their new business partner is going to sit in the background spending his new wealth and not interfere with the white baas. How can he interfere when all he knows is car parts?

Zoom out from this one example to the big picture. The faustian deal the ANC made when taking power nearly twenty years ago was that its favoured people would become instantly wealthy, and the needs of the poor would be parked indefinitely. BEE is the “fix” that hides this sorry fact. BEE that takes the form of deliberate promotion of black incompetents to prevent real transfer of control is directly related to lack of delivery. Both in government appointments and in choice of government contractors, this same game is being played. It suits both sides. The ANC can cement its base by patronage, and the old baasskap players can carry on much as before with a little camouflage.

The sad thing is this is not really in anyone’s interest. While it’s true that some people have become obscenely rich in a relatively short time, that wealth cannot really be enjoyed if you have to live in a cage. The white population, the newly empowered black population and those who have managed to rise above poverty without suckling on the BEE teat are living on borrowed time. Sooner or later, the excluded masses will demand their share. In the meantime, our cages are rattled harder and harder.

So what’s to be done?

The ANC is so steeped in the politics of patronage that it’s hard to see it changing, which is sad given the party’s history. Past the 20th anniversary of ANC rule, I expect an increasing fraction of voters who did not grow up with apartheid to be open to other options. The DA doesn’t have a narrative with mass appeal. The smaller parties show no signs of rapid growth. What of the newer players? Malema’s notion of economic freedom ends when he’s liberated wealth in his direction. Agang still needs to hit its stride. I don’t know what it stands for aside from “ANC bad”. A party that promises to do roughly what the ANC stands for but do it right could be in with a chance. On the other hand, Mamphela Ramphele was a senior executive at the World Bank, and I have not heard her repudiating its disastrous structural adjustment jihad. Agang is holding a policy workshop this weekend, so let’s see how that foes. I’d rather judge on results than history, since the ANC has amply demonstrated that history has little influence on how you behave now.

My fear is that all this will lead to another Arab Spring movement – a mass uprising driven by youth with cell phones, with a clear idea of grievance but no clear sense of what to do about it. What South Africa desperately needs now is a clear lead on what to do post-ANC. And that time is fast approaching.

WikiLeaks: Strange Bedfellows

Julian Assange’s Australian WikiLeaks Party has some strange ideas about how to pursue freedom.

In a recent story published in the US, he extolls the US Right interpretation of libertarianism as the “only hope” and representing non-violence. Reading the whole article is interesting, and worth taking the time to do so, especially if you are an Australian voter.

Where does he get that the hardcore antigovernment right is about nonviolence (including as regards abortion)? They are happy to endorse murder when it suits their agenda. To me libertarianism starts with maximising freedom of choice for the individual. The American right version of libertarianism goes off the rails when it aligns itself with extremist religion (which opposes free choice) and big business (which can undermine the individual as much as or even more than government). Ask Russians concerned about oligarchs if excessive concentration of power in big business is a problem.

Meanwhile, in Australia, parties contesting the Senate election need to rank all candidates so any votes that don’t go to elect them are reassigned according to the order the party specifies. The purpose of this exercise to create a group voting ticket is so voters who don’t want to number every candidate can just tick one box, and the order preset by the party they select is used to fill in the ballot. The WikiLeaks Party has preferenced minor parties with views in line with the US right ahead of the Greens, their ally in anti-war and transparency causes. Even more bizarrely, they have put the Nationals ahead of the Greens in Western Australia, reducing the chances of reelection for Greens senator Scott Ludlum, one of the most consistent campaigners for freedom of information. The Nationals are not libertarians by any stretch of the imagination The WikiLeaks Party claims this happened as result of an “administrative error”.

The Australian Electoral Commission’s web site right now is in meltdown so I can’t check the details, but there is enough reporting of this stuff that it seems unlikely to be wrong.

You can read more about similar strange deals here. If parties were doing this the way you’d expect a voter to, they would number candidates in the order of nearest to their position to furthest. Instead, many take the approach of numbering the candidate closest to them last to try to eliminate their most obvious competition. Just to make things more interesting, the big parties tend to use the opposite tactic, favouring each other over smaller parties who offer a real alternative. This way, the two-party duopoly is maintained. This is nothing new. In the past, the Greens were criticized for dodgy deals, and don’t do that anymore. Everyone else still does, apparently. One more reason to support the Greens.

As a consequence of this weirdness, anyone wanting to express support for WikiLeaks has to either accept that they are undermining the chances of the Greens to be elected, or number all the candidates themselves. With about 100 in NSW, that takes some commitment.

In the interests of transparency, the WikiLeaks Party should publish a full and complete record of how they arrived at their preferences for the Senate vote in New South Wales.

What was it that WikiLeaks stands for?

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Update

The WikiLeaks Party has imploded spectacularly, with one of Julian Assange’s oldest associates Daniel Mathews quitting, and providing explicit detail of how the preferences fiasco happened. In summary, “administrative error”, my arse. What is particularly disappointing about this is how Assange appears to see his voters as cattle who can be herded to the slaughter, without concern about how and where they are being led. The very notion that you can negotiate a dodgy preferences deal on the basis that no one cares about that sort of detail is contrary to the core principles of a whistleblower organization. The details do matter, and everyone is not only entitled to know, but ought to check.

Here are some articles from WLP (GVT means group voting ticket, a specification of preference flows if a voter votes only for that party’s ticket rather than number all candidates):

• The WikiLeaks Party Announces Independent Review – most notably, it mentions “ errors made in some GVTs” – an acknowledgement of more than one error
• Statement on the appointment of Binoy Kampmark as Julian Assange’s primary running-mate – this one says “… misinformation from Christine Milne, leader of the Greens, who has stated incorrectly that we made ‘administrative errors’ in ‘three states’. We did not. The ‘administrative error’ occurred only in NSW”

Possibly. But we don’t know what their preference negotiators told the Greens during negotiations, and the inconsistency between the two statements does not add to their credibility.

Much of the Assange story revolves around his personality, which is unfortunate. The ideal of real governmental transparency is a great one. If you really care about this, vote for the Greens because they not only are on the right side of this issue, but are a principled party that doesn’t revolve around personalities.

Australia and Xenophobia

In Australia, whenever a new leaky boat full of desperate asylum seekers shows up, it’s treated with hysteria in the media. If the government of the day doesn’t react with cruelty, it’s considered to be weak on border security. And every time the approach to dealing with asylum seekers wanders further from humanitarian norms, it’s lauded as a solution to he problem.

Well, is it? As former prime minister Malcolm Fraser put it:

no democratic Australia could ever impose penalties or hardships on refugees which could match the terror from which most of them flee

So even if deterrence could work, should Australia attempt that?

And, anyway, is the view that numbers spike when the policy softens and go down when it gets harsher valid?

Correlation isn’t causation. You have to look at the push factors as well, and those definitely are causation. More refugees at source = more arriving at destination. Nothing could be simpler.

Even with the latest increases the numbers are not that high by world standards. If you look at UNHCR stats, 2012 had the highest number of new refugees since 1999. Australian stats for boat arrivals peak in 1999-2000 when numbers at source previously peaked, and they shoot up again over the last year when the number of new refugees shot up.

Some refugee stats here show that Australia does not have a serious problem, and treating a relatively small number of arrivals as a huge crisis for national security is not warranted.

Why is it impossible for any party besides the Greens to be rational on this? Could it be because anything but xenophobic hysteria results in a media beat-up?

Here in South Africa, genuine illegal immigrants (mostly economic migrants from Zimbabwe) amount to 10% of the population, yet all sides of politics condemn xenophobia when it flares up. Australia only leads the world in one respect as far as refugees go: mainstreaming of xenophobia.

Anyway numbers don’t lie so let’s check them. The graph here shows the difference for each year between reported numbers for that year and the year before of refugees (I use the UNHCR’s refugee count, excluding categories like internally displaced persons and Palestinians who are less likely to arrive in a distant country) and boat arrivals in Australia. The UN numbers are for a calendar year, while the Australian reporting period is a financial year (1 July–30 June). This is not a bad thing however as a 6-month delay takes into account the time between a push factor and a boat arrival.

The graph illustrates that upticks in numbers arriving correspond closely to upticks in the number of refugees over the previous year. The green line is the difference between boat arrivals in Australia and the number the previous year, and the blue line is the difference between UNHCR reported numbers of refugees versus the previous year. The lines mostly correspond pretty well, with just the major uptick in refugees in 2006 failing to result in major change in boat arrivals. The 2006 increase may however have arisen from a reporting anomaly (see UNHCR Statistical Yearbook 2006, Chapter 2, p  pp 25–26) rather than a major change in real refugee numbers.

Eyeballing data is risky: we should really do the stats. So let’s look at whether the data correlates. The correlation coefficient is statistically significant: r=0.56, and if we do a t-test for significance, the p-value is 0.006. So yes, this is a real correlation that explains the data well. And we can assign a cause to it, so we are not guilty of assigning causality to a coincidence.

So couldn’t the John Howard “Pacific Solution” actually be the cause of the decline in boat arrivals? That started in 2001 when the number of boat people hit a peak. So let’s mark that on the graph. The red arrow points to the 2001 data point where we can see that the push factors were already declining. And the number of boat arrivals also declined. Given that the correlation is also also strong before 2001 (0.60, though we don’t have enough data points for statistical significance, p=0.057), it is unlikely that being tough on asylum seekers actually had a significant chilling effect on boat arrivals. The only data point that lends comfort to xenophobia is the apparent 2006 increase in refugees but as we have seen that is not a real increase (mostly Iraqi refugees of the 2003 war in Syria and Jordan who had not previously been counted).

Anyway I present the data for you to make up your own mind. To me it looks pretty clear that being harsh on asylum seekers is nothing more than bad politics, dragging the political discourse down to the gutter. Mainstream politics, it seems is presented with no alternative but to go this route for fear of vilification by the commercial media. The Greens are the only party of significance that has resisted the politics of fear and xenophobia. Good on them. I hope they do well this election.

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Further Reading

The Guardian has some useful stats on refugees here.