Steven Jobs - The Book Review

Steven Job Died, and for a (not so short) while, it seemed like everyone had something to say about the matter.
Naturally I wanted to say something about it too, and this blog seemed like the perfect platform to say it.
But then I heard that there was this 600 page authorized biography, so naturally, I had to read it.
So here's what I though of it:
First, I think it's important to state how you read a book (especially if it's an Ebook), so I read this one on the Kindle software. That would be both on my Iphone kindle, and on Kindle for the cloud, which is the only version that works on my Linux PC.
I bet some of the readers can infer my opinions about Steven Jobs and the book from these facts alone.
Anyway, I thought it was a really interesting book. As an aspiring writer, there is enough stuff in there to write something like thirty novels. Just as an example, there is a story there about a Xerox employee who insisted on NOT telling Jobs about all the worderful ideas they had in the late 1970s. I bet her life story is novel worthy, and really, there is just so MUCH in this book.
Another good thing about the book is how it tidied everything I knew about Steven Jobs. I mean the guy was a feature in my life since at least 1983, when one of my friends got an Apple II clone, but the book really explained how eveything worked from his side (Apple I, Apple ][, LISA, Mac, NeXT etc.) now I think I really know this guy's life story.
Also, I think Walter Isaacson (the writer of the book) really got a rounded view of Jobs, by talking to people like Bill gates, and Eric Schmidt and Steven Wozniak. I'm sure some day when someone sits down to write a biography of say Schmidt, this will be really useful, but even now, we get a picture of silicon valley that goes way beyond Jobs.
So isn't there anything negative I can say about his book? I think its down side is actually the down side of almost any biography. We get a clear picture of Jobs, but not of the effects of the things that he did downstream (such as apple II clones we had in Israel in the early 1980s, I'm sure he was not a fan!).
But even this minor gripe is a good thing. It lets me get in and give you my two cents!
Starting next week.

Steven Jobs biography

It's Not About Greed

I'm going back to late 1993 now, and my second year as an undergrad at the Hebrew University in Jerusalem.
I studied Economics and Mathematics back in the day, and because of the odd nature of the aforementioned university, that meant I had to study in two campuses. Luckily there were a few other students on that program and so I hitched rides with one of them who had a car.
Whenever we got to Mount Scopus (Economics) he used to say: "I don't like the smell here. It smells like greed."
Funny thing, the guy is now a professor of Economics. but not greedy.
Anyway, since at least the 1970s there have been a profession called Business Administration in most US colleges and universities. The aim of this endeavor is explicitly making money.
The interesting fact is that many US undergrads went on to become millionaires since then, but most of them were computer scientists. Same thing happened in Israel on a smaller scale.
I think people like Bill gates, or even Steve Jobs are greedy to an extent, but that is not the prime motivator of their actions. I think the prime motivator was creating something useful or nice (yes, I even think that of Bill Gates). Money was just a (huge) byproduct of that.
So in the next few weeks I plan to air my personal views on at least four people: Steve Jobs, Bill gates, Eric Schmidt, and Jeff Bezos.
See ya'll next week!

Look at this TED lecture - seriuosly

I know I said this blog will move on to discuss matters having to do with technology and computer science, and it will, starting next week, I promise!
But for this week I've watched this really amazing TED lecture, and it ties so nicely with everything discussed in this blog in the past few weeks, that I have to recommend it now.
The video is here:
http://www.ted.com/talks/richard_wilkinson.html
And to give you the really short version; for developed economies, growth and GNP per capita are far less important than the equitable distribution within the society.
More equitable distribution lowers crime, improves health, and happiness and many more important life variables.
Now go watch the real lecture!

Actually This blog is not Supposed to be about Economics

Since I'm a small Israeli Ebook publisher, I'm not only supposed to have thoughts on matters related directly to Economics, but also on matters having to do with Literature.
That's why I want to talk about Business and Computers for a short while now.
Wait, What?
Yes, I think that the Ebook revolution is a huge deal, not only to book publishing, but also to human civilization as a whole.
The reason I wrote about Economics so far is that I studied economics, but found that Economic Analysis alone does a very poor job at writing books for publishing, at picking up which books to publish, but also at actually marketing and selling the books.
I'm not saying I'm a roaring commercial success, but four years of being a publisher at least taught me a few things that I should NOT do, but more about that later.
For now, that is for the next few weeks, I want to talk about some of the past and present leaders of the Software Industry, because that will lead to talking about Ebooks...

Kosher Mexican Food in Beer Sheva

This just occured to me the other day.
While is is very obvious that Tel Aviv is the food capital of Israel, so much so that many Israeli restaurant review sites don't even bother publshing reviews for any other places (which is a subject for a future post maybe), there are many more Mexican/Tortilla places in Beer Sheva, most of them Kosher, and I can't even think of one that exists in Tel Aviv currently.
For example you can chack out this site (if you can read Hebrew), and you will see that this franchise has three branches of Kosher Tortillas in Beer Sheva, and it plans on opening the fourth branch in Hadera (a small city north of Tel Aviv, so smaller and further from Beer Sheva).
Why is that?
You may reply, if you know the food fads of Israel, that Tortillas were a craze in Tel Aviv too three or four years ago, and then most businesses just moved on, but this does not explain why it stuck in Beer Sheva!
The two explanations me and my wife thought of are that cheaper food sells better in Beer Sheva, and that beer Shevans on the average like spicy food better that Tel Avivians. Both may be true, but it still make you wonder...

Couscous on Tuesdays

I have another shocking confession to make. I really like Couscous.
Now Couscous being a traditional Morrocan or Tunisian food it is quite easy to find decent (Kosher) Couscous places in Beer Sheva.
The interesting thing is that most of these places, and almost all of the good places serve Couscous mainly on Tuesdays.
I know it is traditional to eat Couscous on Tuesdays (and Friday night, but obviously not Kosher places...)
However, one would think that there would be an economic oportunity here, that some people migt like Couscous on Sunday for instance..
But for some reason this is not happening.
I think this is yet another evidence that economic is inextricably tied to culture, and that cultural traditions sometimes change very slowly despite of economic incentives.

Here's Something That Regular Economics Can't Explain

Ok.
This is actually the first idea I've had that made me think that current economic Theory is broken.
Also, before I start, I'm sorry that the only numbers to back me up here are from my own memory, but there are no regular statistics on these subjects.
So here goes:
In 1990 I distinctly remember being a youth councilor in Ashkelon. I was trying to train a group of junior councilors, and the Rabbi of the congregation wanted a session with the energetic youths.
He started the session with a meditation on the subject of Shawarma. it went something like this:
"Shawarma. Think of it. Shawarma. Lusciuos tasty Shawarma, with Tahina, and all you can eat salads. But the pita is too small, and the price just went up from 5 shekel to 6 shekel (about 2.50$ to 3$ at the 1990 exchange rates)..."
This is actually the point. Shawarma in 1990 cost 5 or 6 shekels. today it costs 24 to 30 shekels (7$ to 9$ at current exchange rates). This is a serious climb in the price.
So far, it's hardly shocking. But Sushi prices in Israel actually went down at the same time! from 40 shekel in the early 1990s (about 20$!) to about 24 shekels now (about 7$).
How can this be?
Regular economics cannot explain this, but economies of scale can. It's just that more people eat Sushi in israel now, and fewer people eat Shawarma than in 1990. Still, Shawarma is more popular than Sushi, only the difference is smaller. So competition in one area went way up, and in the other area it went way down.
People don't meditate about Shawarma so much now.

Does Democracy Stifle Economic Growth?

Sorry.
This is not my title and not my lecture.
Rather it is the title of a TED lecture by Mr. Yasheng Huang.
If you listen to this lecture, and I highly recommend it, you will be convinced that Democracy does not stifle Economic Growth.
That's a very good thing to be convinced of.
But you will also be convinced (I hope) that Economic Growth comes from an interplay of many factors, and that is a point I have been trying to make for the last few posts.
Only Yasheng Huang does it better.
Go watch, Seriously.

International GDP per capita comparisons - a wonderful way to get a headache

Seriously, I thought I understood at least where my country stood as far as international GDP per capita considerations were concerned, at least until I took a serious look at this chart.

This chart compares the GDP per capita of four countries from 1960 to 2009.

The countries are: Israel, UK, France and the US.

Until I looked at the chart, I thought I had it all figured out: we were a developing country, slowly gaining acceptance and status, and improving our GDP, and GDP per capita. One day we will catch up with Europe and the US, and in the past we were much farther away from them then we are now.

Right? wrong!

This chart says that in 1960 UK, Israel and France were all in the same spot! Roughly one half of the US GDP per capita at the time.

Wait, there's more. According to the chart that (1960) was the last time Israel was doing so well at least compared to the UK and France. And these two grew faster than Israel, almost catching up with the US recently.

What is the meaning of this? How can this make sense?

After looking at the chart there are still more questions such as:
Is the UK doing better than France recently? If so is 2009 just a blip? Can blips be really this big?
Why was France doing so much better than the UK in 1980?
Why the same in 1994?
I bet that there are great explanations for all of these questions.
A good starting point is that since 1960 Israeli population has more than tripled, whereas UK and France almost did not grow.
But that leads us to what I wanted to say from the beginning: GDP per capita is just one number, if you look only at one number you will be confused, and you will not be able to tell the whole story!

The First Computer I really Bought

The first computer I really had was a ZX Spectrum, the year was 1984, and the future looked bright if you only knew how to program in BASIC. but I didn't buy this computer, my parents bought it for me, I was only 14 at the time, so stands to reason.
The first computer I bought was a Pentium 90, top of the line model for 1995. I just finished my BA and moved to Haifa. It had cost 6,500 NIS, thus a bit more than 2,000$ at the time. I really couldn't afford it, but I needed a computer. I did some serious work using Word 5 (Word 6 was too hard to obtain at the time), and I played on it. Little big adventure.
So what's the point of this astounding confession? that 2,000$ bought you a lot less computer then than 84.95$ can buy you now. Obviously some guys in Israel at the time made some money from assembling my computer. I hope thay found another job they can do by now, because it pays A LOT less nowadays.
To sum it all up, If you try to measure a computer as a part of GDP you will get nonsense, because the numbers are meaningless as prices keep going down all the time...

About GDP and Real Estate

Let's say this right away: the value of real estate is not a part of GDP. That is because the entire value of real estate was not produced in just one year.
However, the Change in the value of real estate is a part of GDP - at least as far as new housing construction and services on exiting housing is concerned.
Which leads us to the following question: Suppose I bought a house in a town in Israel in 2003 (I did), and suppose the value of the house now, a mere eight years later, is three times what it was before, what does it mean?
To tell you the honest truth, I can ask the question - but I don't know the answer. What can possibly change in the same floors, and the same walls and the same ceiling that would make it worth three times as much in just eight years?
It's true that the train now gets not very far from my house, and the number of residents in the town has increased, but the house also got older.
It all boils down to this - the price of houses is determined by supply and demand, and thus supply and demand for houses have a very clear effect on GDP.
So I hope that the lesson from this example is clear - GDP is to a large degree determined by 'psychological' factors.
This means two things:

• GDP is hard to predict
• It is not clear what it measures in the first place.

GDP Measures a Lot of Things

Suppose we look at an economy. Let's take an example that is close to home - the economy of Israel (that would be close to my home).
So GDP Measures everything that the Israeli economy produces in one year - the IDF, the Israeli education system, the bread baked in bakeries (including pita bread since this IS the middle east), and also the refined diamonds that Israel exports that are consumed say in Belgium.
If the Israeli economy were to produce the exact same products in 2011 as it did in 2010, only 5% more of each, than we could comfortably say that the Israeli GDP grew 5%, but what if for example everything else stayed the same, and only diamond production went up by 50%?
Now if Diamond production is 10% of the Israeli economy, we would still be inclined to say that GDP went up by 5%, but this completely changes the picture. For starters, most of the diamonds produced (refined) in Israel are not consumed in it, and for seconds, only a small group of Israelis has enjoyed this growth, and it might not 'trickle down' to the rest of the Israeli population.
So here we have seen two scenarios of '5% Growth' that are not that similar. In the next few weeks I will show how for different 'products' GDP and changes in GDP mean different things.

One Equation Is Often Too Little

Quite often when I sit down to discuss Science with my literary friends, the subject turns to Quantum Mechanics. It seems that many people think that 'Quantum Mechanics disproves Science', or that 'Quantum Mechanics proves that everything is in the eyes of the beholder'.
I'll be the first person to admit that quantum mechanics is in many ways non-intuitive, difficult, and yes it does attribute some role to the 'observer' (in most interpretations).
However, Quantum Mechanics is very much a scientific theory in that it fits our observations of nature. In fact, Quantum Mechanics is so powerful, that it can deduce from one number (the Atomic Number) any number of physical qualities (such as easiness of chemical bonding, Melting Temperature, Color, and Density). So in the case of Quantum Mechanics, one equation, or one observed variable (Atomic Number) predicts many other things.
But this is not a column about Physics, but rather, it is about Economics, and Economic Growth in particular. The Wikipedia article about Economic Growth is not a bad place to start. Basically it says that Modern Economics has three Growth Theories: The Solow Model, Endogenous Growth, and Integrated Growth.
Here is the Solow Model:

It goes like this: there is Economic Growth as long as the amount of Capital per Worker increases. Endogenous and integrated Growth try to explain why there is ongoing Growth in the modern world, and why there was less of it, more than about 250 years ago.
But, I think all of these models are flawed. They are flawed because any Modern Economy (and any non-modern economy as well) is way too complex to fit into a single number (such as Capital per Worker).
So in the next few weeks I'll try to show why one number (in Economics, as opposed to Quantum Mechanics) is not enough.

I'm Back: Economic Musing Number One

First and foremost, I'm back from Hungary. Before now, I've been to Hungary just once, in 1987, back in the Communist Era. Needless to say, there were quite a few changes, mostly economic changes, between then and now. More about this in later musings.
Second of all, despite the title of this post, I don't intend to number all of the Economics Musings, and like I said in the previous post, I don't intend to write only Economics Musings. Nuff said.
Let's get down to business.
The main reason that I think that modern Economics is broken is that it's not a predictive science. Let's make this clearer: since at least the time of Isaac Newton, Physics has been a predictive science. We know with fantastic accuracy where hundreds of objects in our Solar System are going to be in the next few centuries (never mind the wonderful experiment of dropping your pen and checking whether and when it hits the ground!).
We can say the same thing about the predictive ability of Genetics since the times of Gregor Mendel. However, this is definitely not the case with economics!
Arguably the most important economic variable is GDP. Now, if one were to predict say the GDP in Israel in the next couple of years, one would probably not be very wrong, if one were to use the current GDP. So the GDP changes from year to year, but not by much, only a few percent. Needless to say that this adds up over the years, and if one were to predict the GDP of Israel 50 years from now, one would be in serious trouble!
But that's not all. The change in GDP is called Economic Growth, and it is also very important (the question of whether the Economy is in a recession or in a boom is a question of Economic Growth). Now Israel's growth was supposed to be something like 5% this year. Yesterday we found out that in the second quarter it was only 3.3% (on a yearly basis). Anyone care to guess what the 2011 GDP growth in Israel is going to be? (when more than half the year is over! this is predicting the present, not the future!)
Like I said yesterday we found out the the earlier prediction might be 50% off, and will almost certainly be at least 20% off. This is normal in Economics, hence my saying that current economics is not a predictive science.
Economists faced with this truth are saying to me things like: 'Look, Economics is hard, so many things effect GDP Growth, it's hard to predict!" They are right of course.
All I'm claiming is that given how many things effect GDP, the tools (equations, models) used by economists are too simple, and too simplistic.
More about this next week.

Coming up next

Despite the dismal record of this blog with regards to future posts in general, and series of future posts in particular, I'd like to declare, hmmm, well, a series of future posts.
You see, for many years I've been a student of Economics (Formally from late 1992 to mid 2003, but informally also ever since). In all those years I've been thinking that there is something broken in Economics.
I don't mean that it's a little thing that is broken, I mean that the whole framework of modern Economics is seriously bent.
Now, if I'm right, this is potentially a huge deal, because unlike other Social Sciences, Economics is used in our everyday decision making process, both on the private level and on the public level.
Thing is this, it's hard to enunciate even what a 'good' Economic Theory would look like, because like I said earlier, the whole framework is bent.
So I propose a series of 'Economic Musings', to be published here in the next few months. Hopefully by the time it is done, it'll all be clearer to all, myself included.
However, next week, I'm in Hungary, after many years of not taking a vacation abroad, so expect the first 'Economic Musing' to be here in two weeks time.
Also, I bet current affairs, and my wavering interest, will sometimes require posts about other subjects, so stay tuned...