Tuesday, February 27, 2007

Sound bytes!

I was thinking...how do these famous quotes get made. So I decided I would have a shot at it. Sound bytes for the internet age.



"There is no reality. Just an illusion that pretends really well"



"Economics is about people assuming rationality in the face of overwhelming evidence to the contrary."



"Love is blind, deaf, and quite frequently...dumb" (I am not sure if this is mine...surely this has been used before?).



"Fear makes you do things you would have done better without!"



"Every day starts off with the hope that things are getting better."



"You are fat enough to actually disturb the gravitational balance of the earth" (That was from when I used to be compared to satellites rather than elephants!)



"Watch that step!"



Well, that's all folks...till my next post!





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Sunday, February 25, 2007

Politically Incorrect Economics

I have been studying some Economics, and while everyone has been praising India and China to the skies, and hailing them as economic superpowers, it is interesting to note that the total production of a company depends (finally) on basically 2 factors. One is Labour, the other is raw materials. (Lets take out Capital for the sake of this argument).

India and China have a huge amount of free labour sitting around, what with our populations. But in terms of raw materials, our land area is not exactly proportional to our population. Especially India.

Now lets consider the United States. Its two and a half times the size of India in area, and has just hit 300 million people. So its area/population is almost 9 times that of India. Just that difference would account for a huge proportion of the per capita income difference. Of course, Indian productivity of land is probably higher, but how much higher can you get? 2 times, 3 times higher? Not Ruddy likely!

Now for the really funky part. If you wanted the economy of the United States to grow like how the Indian and Chinese economies are, what do you do? You can try to raise productivity, but that is not really going to increase your growth rate from 3% to 10%. You could try exporting your goods, but that is definitely not a practical option, considering the American propensity to import Chinese made iPods!

No...how about allowing unrestricted immigration? You increase the number of people, and then have them do the jobs that are currently being outsourced. At first sight, that seems pretty odd...after all, the jobs that were previously being performed by Americans are now going to be performed by (probably) illegal migrants from Mexico. But free markets would mean that these workers would do the job for wages that no American would accept. And considering that you are now getting the same job done for less money, your productivity would probably go up!

But outsourced jobs being taken over by Mexicans won't really grow the American economy. But what if you could get labour at Indian prices for an iron ore mine in the United states. And if cheap ore is obtained, how about that for viability of the American Steel Industry. Especially if they can also employ labour at far less than minimum wage.

Of course, America is an expensive country to live in. So this labour would probably starve to death without social security. But what if an alternative economy could be set up only to target these low paid workers. We could have differential citizenship. One would be the "True citizens", and the other would be the "Labour Citizens", who would be allowed "Special privileges" such as the right to shop at exclusive stores for food. And of course, this food would be super cheap, because...you guessed it, the food has been grown by cheap labour. (or is of lower quality...but we won't walk that road, will we?).

The amazing thing is...this is probably very possible to do. With the first RFID's capable of being implanted in the skin available in the market, there is no technical problem in this sort of segregation. A "Labour Citizen" would be tagged, and only tagged citizens could enter the "Second Class Stores". And technology could be used to target every single product, to ensure that no "True Citizen" is able to use it.

Of course, "Labour Citizens" would not be allowed to buy certain items that are the prerogative of the "True Citizens". Eg: Cars, or Designer Watches. This would be one way of also ensuring that car theft is lowered!

And this would be a market economy. The instant you lose your high paying (above minimum wage) job, you would, along with your last social security check, also get a free RFID implant that would send you to the "Labour Citizen" Category.

And someone who graduates out of "Labour Citizen" gets his RFID software changed so that he can become a "True Citizen". Of course, encryption software to prevent this from being hacked must be developed. But even this is only going to add to the economy....and this can be outsourced to India to achieve cost savings!



Any thoughts?





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