Sunday, January 30, 2011

Spoiled and Stupid

For too long, the US government had been allowed to spend more than it made in taxes. Deficit spending per se isn't wrong, but borrowed money needs to be invested in things that will elevate society as a whole, or it will ultimately become more expensive than just taxing. Obviously, decades worth of borrowed money did not increase revenue enough to pay back the debt, and worse, it gave the taxpayers an unrealistic expectation of services for the price they actually pay in taxes.

Well, the house of cards is coming down. California's new governor Jerry Brown is facing a US$25 billion deficit, and he is now proposing to cover half of that in painful cuts, and the other half with increased taxes. Tea Party winner Edward Mangano of Nassau County in New York kept his campaign promise and repealed an unpopular home energy tax on his first day in office. Now, the Nassau County Interim Financial Authority has seized control of the county's finances, because he is $176 million short. Still, the US Congress is nowhere near an agreement on whether to raise taxes to pay for the services (we're really just talking about four or five things that make up 75% of the budget) or to severely cut into those. There is no other way. Math doesn't care.

The core problem is not Democratic or Republican, but that the American people don't want to pay for the government services they want to keep, and are not smart enough to realize that the politicians either don't know, don't care, or are lying about this.

Thursday, January 27, 2011

From Simmer to Boil

Looking at Tunisia and now Egypt and Yemen, I can't help but think that decades of American and European foreign policy that values stability over freedom and fairness had a hand in it. Since 1979, the US gives Egypt an average of about US$1.3B a year in military aid, and another $815M in economic aid, for some $50B in all. It's hard to say how much, but surely this money helped the government keep a lid on dissent.

I don't mean to point fingers. It's extremely difficult for any president who is in power for four or eight years to do anything other than keep the lid on for the duration of his office. The nature of democracy means that no administration can really commit future administrations to thirty- or fifty-year projects, such as the kind of broad education and outreach that would slowly move a country from tribalism or feudalism or monarchy towards a moderate and free society. Because it is so hard, we simply don't try, and make peace with the men who can keep the lid on for a few years.

Inevitably the pot boils over. Once in a while it happens in an almost orderly manner, such as in Taiwan and South Korea. Once in a while not much blood is shed, such as in the Philippines. But many times we see civil war, such as in Vietnam, Iraq, and other places. The problem when this happens is that the people and their leaders are often unprepared for the power-sharing that is core to democracy. Taiwan was ridiculed for having legislators who fight with their fists in congress, yet it was remarkably civilized compared to many other examples that involve assassinations and car bombs. The people were suddenly asked to be in charge of their nation, and expected to vote wise and peaceable people to lead them. But that of course doesn't just happen overnight.

While the Bush doctrine of imposing democracy is lunacy, we also can't just keep doing nothing until a strategically-important country suddenly explodes in revolution. It's tempting to just pay attention to the "hot spots" like Iran and North Korea, but when it happens we're trapped between our words praising democracy and our deeds suppressing it when inconvenient. We would never invade Egypt or Pakistan or Yemen, I hope, but we need to make front and center a foreign policy that does not tolerate inaction towards democracy. Yes, you can move cautiously, but if you don't move the money must dry up.

We can't very well help suppress the Egyptian people, but if the government they want is fundamentalist Islam, we don't really want that either. We should've changed their minds before it got to this, by helping to educate their people that ours really is the better path. The diplomatic coup of the century would be if we could get Europe, Russia, and China to all enforce this principle, but if they won't, we'd still have to do what we can with the power we still have.

Saturday, January 15, 2011

The Slow Death of Software as a Product

I'm a big fan of simple business models. For example, at Apple we make things that we sell for money. The better we serve our customers, the more likely they'll buy another one later. This isn't the case at Openwave, where the users are usually our customer's customer's customer, nor is it at a company like Yahoo!, where "monetization" is actually a word, and more pertinently at a company like Google.

Google makes many useful services available for free. I use Gmail and Google maps, this blog is powered by Google's Blogger, and I like Sketchup. They have, as far as I can tell, acted ethically despite being so powerful. Except for some no-win situations such as the episode with China, they have generally done right by their users.

However, all of this is possible because of their infinite income from search advertising. Because no other branch really needs to make money, Google manages to attract many bright and idealistic engineers to turn out these wonderful freebies. Many projects they take on, such as Google Earth and Google Books, are of a scale that is difficult to imagine just a decade or two ago.

But the way I'm writing this must lead you to expect the other shoe to drop.

Unfortunately, despite their best intentions, Google also is a distorting influence on many markets. Just because Google can afford to give things away for free doesn't mean that competitors who don't have their infinite search advertising revenue also can. Android is an obvious example. While Apple is unlikely to license iOS, and Palm probably wouldn't have either, Microsoft very much wants to license Windows Phone 7. Yet WP7 must now contend with a free and very competent alternative in Android. Now, it's hard to feel bad for Microsoft, which has it's own cash spigot in Windows and Office, but think about a small company. If Geoworks was around today, how might it compete with Google?

I believe Microsoft launched the first such cannonballs. By giving away Internet Explorer, it made it impossible for Netscape to sell its browser. Opera is probably the only browser that charges money today, but it has only a few percent of the market. This makes no intuitive sense. A modern browser is easily a few millions of lines of code, as complex as anything else installed on your computer, yet it cannot charge money for the effort.

Now, you might say that open source software has the same issue. Yes, it does, and the zero-price browser has much to do with Mozilla. (WebKit grew up with Apple, Nokia, and now Google support, so I won't count it despite its KHTML roots.) However, for whatever reason, free software simply hasn't taken hold in many places. Linux has not really made it on the desktop after two decades, for example, and Microsoft isn't really losing sleep over OpenOffice.org. I'm not going to try to imagine why right now, suffice to say commercial software can still find ways to compete in many realms with free software.

Competing with company-backed free software is a different thing. Apple's backing has made WebKit the number one mobile browser, rendering other mobile browsers like Openwave's mostly irrelevant. Google has made it nearly impossible to sell web-based mail or maps. This is not good for the software industry or its practitioners, because it accelerates the path to monopoly, and thus the reduction of competing solutions. Put bluntly, the only software engineers that will be needed are those who work for infinite-money companies doing this as a hobby or sideline.

This worries me a little, because I'd really rather build software as a product instead of something that attracts advertising or whatever other "monetizing" mechanism they come up with.

...

In October 2013, Apple announced that the new version of OS X, as well as the iWork suite of application software for both OS X and iOS will now be free to customers of new hardware.