Poverty Changes

£14,000 is quite a large amount of money. Enough for 70,000 Freddos, a decade’s worth of holidays, two new Nissan Pixo’s, several thousand potatoes or a gold standard racing pigeon. However, if you’re trying to live off just that amount in modern Britain, it quickly seems quite a lot smaller. Half of that could easily disappear on rent, whilst the average British family will spend a further £4,000 on food (significantly greater than the European average, for one reason or another). Then we must factor in tax, work-related expenses, various repair bills, a TV license, utility & heating bills, petrol money and other transport expenses, and it quickly becomes apparent that trying to live on this amount will require some careful budgeting. Still, not to worry too much though; it’s certainly possible to keep the body and soul of a medium sized family together on £14k a year, if not absolutely comfortably, and in any case 70% of British families have an annual income in excess of this amount. It might not be a vast amount to live on, but it should be about enough.

However, there’s a reason I quoted £14,000 specifically in the figure above, because I recently saw another statistic saying that if one’s income is above 14 grand a year, you are one of the top 4% richest people on planet Earth. Or, to put it another way, if you were on that income, and were then to select somebody totally at random from our species, then 24 times out of 25 you would be richer than them.

Now, this slightly shocking fact, as well as being a timely reminder as to the prevalence of poverty amongst fellow members of our species, to me raises an interesting question; if £14,000 is only just about enough to let one’s life operate properly in modern Britain, how on earth does the vast majority of the world manage to survive at all on significantly less than this? More than 70% of the Chinese population (in 2008, admittedly; the rate of Chinese poverty is decreasing at a staggering rate thanks to its booming economy) live on less than $5 a day, and 35 years ago more than 80% were considered to be in absolute poverty. How does this work? How does most of the rest of the world physically survive?

The obvious starting point is the one stating that much of it barely does. Despite the last few decades of massive improvement in the living standards and poverty levels in the world in general,  the World Bank estimates that some 20% of the world’s populace is living below the absolute poverty line of surviving on less than $1.50 per person per day, or £365 a year (down from around 45% in the early 1980s- Bob Geldof’s message has packed a powerful punch). This is the generally accepted marker for being less than what a person can physically keep body and soul together on, and having such a huge proportion of people living below this marker tends to drag down the global average. Poverty is something that the last quarter of the century has seen a definitive effort on the part of humanity to reduce, but it’s still a truly vast issue across the globe.

However, the main contributing factor to me behind how a seemingly meagre amount of money in the first world would be considered bountiful wealth in the third is simply down to how economics works. We in the west are currently enjoying the fruits of two centuries of free-market capitalism, which has fundamentally changed the way our civilisation functions. When we as a race first came up with the concept of civilisation, of pooling and exchanging skills and resources for the betterment of the collective, this was largely confined to the local community, or at least to the small-scale. Farmers provided for those living in the surrounding twenty miles or so, as did brewers, hunters, and all other such ‘small businessmen’, as they would be called today. The concept of a country provided security from invasion and legal support on a larger scale, but that was about it; any international trade was generally conducted between kings and noblemen, and was very much small scale.

However, since the days of the British Empire and the Industrial Revolution, business has got steadily bigger and bigger. It started out with international trade between the colonies, and the rich untapped resources the European imperial powers found there, moved on to the industrial scale manufacture of goods, and then the high-intensity sale of consumer products to the general population. Now we have vast multinational companies organising long, exhaustive chains of supply, manufacture and retail, and our society has become firmly rooted in this intense selling international economy. Without constantly selling vast quantities of stuff to one another, the western world as we know it simply would not exist.

This process causes many side effects, but one is of particular interest; everything becomes more expensive. To summarise very simply, the basic principle of capitalism involves workers putting in work and skill to increase the value of something; that something then gets sold, and the worker then gets some of the difference between cost of materials and cost of sale as a reward for their effort. For this to work, then one’s reward for putting in your effort must be enough to purchase the stuff needed to keep you alive; capitalism rests on the principle of our bodies being X% efficient at turning the food we eat into the energy we can use to work. If business is successful, then the workers of a company (here the term ‘workers’ covers everyone from factory floor to management) will gain money in the long term, enabling them to spend more money. This means that the market increases in size, and people can either sell more goods or start selling them for a higher price, so goods become worth more, so the people making those goods start getting more money, and so on.

The net result of this is that in an ‘expensive’ economy, everyone has a relatively high income and high expenditure, because all goods, taxes, land, utilities etc. cost quite a lot; but, for all practical purposes, this results in a remarkably similar situation to a ‘cheap’ economy, where the full force of western capitalism hasn’t quite taken hold yet- for, whilst the people residing there have less money, the stuff that is there costs less having not been through the corporation wringer. So, why would we find it tricky to live on less money than the top 4% of the world’s population? Blame the Industrial Revolution.

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Pineapples (TM)

If the last few decades of consumerism have taught us anything, it is just how much faith people are able of setting store in a brand. In everything from motorbikes to washing powder, we do not simply test and judge effectiveness of competing products objectively (although, especially when considering expensive items such as cars, this is sometimes impractical); we must compare them to what we think of the brand and the label, what reputation this product has and what it is particularly good at, which we think most suits our social standing and how others will judge our use of it. And good thing too, from many companies’ perspective, otherwise the amount of business they do would be slashed. There are many companies whose success can be almost entirely put down to the effect of their branding and the impact their marketing has had on the psyche of western culture, but perhaps the most spectacular example concerns Apple.

In some ways, to typecast Apple as a brand-built company is a harsh one; their products are doubtless good ones, and they have shown a staggering gift for bringing existed ideas together into forms that, if not quite new, are always the first to be a practical, genuine market presence. It is also true that Apple products are often better than their competitors in very specific fields; in computing, for example, OS X is better at dealing with media than other operating systems, whilst Windows has traditionally been far stronger when it comes to word processing, gaming and absolutely everything else (although Windows 8 looks very likely to change all of that- I am not looking forward to it). However, it is almost universally agreed (among non-Apple whores anyway) that once the rest of the market gets hold of it Apple’s version of a product is almost never the definitive best, from a purely analytical perspective (the iPod is a possible exception, solely due to the existence of iTunes redefining the music industry before everyone else and remaining competitive to this day) and that every Apple product is ridiculously overpriced for what it is. Seriously, who genuinely thinks that top-end Macs are a good investment?

Still, Apple make high-end, high-quality products with a few things they do really, really well that are basically capable of doing everything else. They should have a small market share, perhaps among the creative or the indie, and a somewhat larger one in the MP3 player sector. They should be a status symbol for those who can afford them, a nice company with a good history but that nowadays has to face up to a lot of competitors. As it is, the Apple way of doing business has proven successful enough to make them the biggest private company in the world. Bigger than every other technology company, bigger than every hedge fund or finance company, bigger than any oil company, worth more than every single one (excluding state owned companies such as Saudi Aramco, which is estimated to be worth around 3 trillion dollars by dealing in Saudi oil exports). How has a technology company come to be worth $400 billion? How?

One undoubted feature is Apple’s uncanny knack of getting there first- the Apple II was the first real personal computer and provided the genes for Windows-powered PC’s to take the world, whilst the iPod was the first MP3 player that was genuinely enjoyable to use, the iPhone the first smartphone (after just four years, somewhere in the region of 30% of the world’s phones are now smartphones) and the iPad the first tablet computer. Being in the technology business has made this kind of innovation especially rewarding for them; every company is constantly terrified of being left behind, so whenever a new innovation comes along they will knock something together as soon as possible just to jump on the bandwagon. However, technology is a difficult business to get right, meaning that these products are usually rubbish and make the Apple version shine by comparison. This also means that if Apple comes up with the idea first, they have had a couple of years of working time to make sure they get it right, whilst everyone else’s first efforts have had only a few scance months; it takes a while for any serious competitors to develop, by which time Apple have already made a few hundred million off it and have moved on to something else; innovation matters in this business.

But the real reason for Apple’s success can be put down to the aura the company have built around themselves and their products. From their earliest infancy Apple fans have been self-dubbed as the independent, the free thinkers, the creative, those who love to be different and stand out from the crowd of grey, calculating Windows-users (which sounds disturbingly like a conspiracy theory or a dystopian vision of the future when it is articulated like that). Whilst Windows has its problems, Apple has decided on what is important and has made something perfect in this regard (their view, not mine), and being willing to pay for it is just part of the induction into the wonderful world of being an Apple customer (still their view). It’s a compelling world view, and one that thousands of people have subscribed to, simply because it is so comforting; it sells us the idea that we are special, individual, and not just one of the millions of customers responsible for Apple’s phenomenal size and success as a company. But the secret to the success of this vision is not just the view itself; it is the method and the longevity of its delivery. This is an image that has been present in their advertising campaign from its earliest infancy, and is now so ingrained that it doesn’t have to be articulated any more; it’s just present in the subtle hints, the colour scheme, the way the Apple store is structured and the very existence of Apple-dedicated shops generally. Apple have delivered the masterclass in successful branding; and that’s all the conclusion you’re going to get for today.

Getting bored with history lessons

Last post’s investigation into the post-Babbage history of computers took us up to around the end of the Second World War, before the computer age could really be said to have kicked off. However, with the coming of Alan Turing the biggest stumbling block for the intellectual development of computing as a science had been overcome, since it now clearly understood what it was and where it was going. From then on, therefore, the history of computing is basically one long series of hardware improvements and business successes, and the only thing of real scholarly interest was Moore’s law. This law is an unofficial, yet surprisingly accurate, model of the exponential growth in the capabilities of computer hardware, stating that every 18 months computing hardware gets either twice as powerful, half the size, or half the price for the same other specifications. This law was based on a 1965 paper by Gordon E Moore, who noted that the number of transistors on integrated circuits had been doubling every two years since their invention 7 years earlier. The modern day figure of an 18-monthly doubling in performance comes from an Intel executive’s estimate based on both the increasing number of transistors and their getting faster & more efficient… but I’m getting sidetracked. The point I meant to make was that there is no point me continuing with a potted history of the last 70 years of computing, so in this post I wish to get on with the business of exactly how (roughly fundamentally speaking) computers work.

A modern computer is, basically, a huge bundle of switches- literally billions of the things. Normal switches are obviously not up to the job, being both too large and requiring an electromechanical rather than purely electrical interface to function, so computer designers have had to come up with electrically-activated switches instead. In Colossus’ day they used vacuum tubes, but these were large and prone to breaking so, in the late 1940s, the transistor was invented. This is a marvellous semiconductor-based device, but to explain how it works I’m going to have to go on a bit of a tangent.

Semiconductors are materials that do not conduct electricity freely and every which way like a metal, but do not insulate like a wood or plastic either- sometimes they conduct, sometimes they don’t. In modern computing and electronics, silicon is the substance most readily used for this purpose. For use in a transistor, silicon (an element with four electrons in its outer atomic ‘shell’) must be ‘doped’ with other elements, meaning that they are ‘mixed’ into the chemical, crystalline structure of the silicon. Doping with a substance such as boron, with three electrons in its outer shell, creates an area with a ‘missing’ electron, known as a hole. Holes have, effectively, a positive charge compared a ‘normal’ area of silicon (since electrons are negatively charged), so this kind of doping produces what is known as p-type silicon. Similarly, doping with something like phosphorus, with five outer shell electrons, produces an excess of negatively-charged electrons and n-type silicon. Thus electrons, and therefore electricity (made up entirely of the net movement of electrons from one area to another) finds it easy to flow from n- to p-type silicon, but not very well going the other way- it conducts in one direction and insulates in the other, hence a semiconductor. However, it is vital to remember that the p-type silicon is not an insulator and does allow for free passage of electrons, unlike pure, undoped silicon. A transistor generally consists of three layers of silicon sandwiched together, in order NPN or PNP depending on the practicality of the situation, with each layer of the sandwich having a metal contact or ‘leg’ attached to it- the leg in the middle is called the base, and the ones at either side are called the emitter and collector.

Now, when the three layers of silicon are stuck next to one another, some of the free electrons in the n-type layer(s) jump to fill the holes in the adjacent p-type, creating areas of neutral, or zero, charge. These are called ‘depletion zones’ and are good insulators, meaning that there is a high electrical resistance across the transistor and that a current cannot flow between the emitter and collector despite usually having a voltage ‘drop’ between them that is trying to get a current flowing. However, when a voltage is applied across the collector and base a current can flow between these two different types of silicon without a problem, and as such it does. This pulls electrons across the border between layers, and decreases the size of the depletion zones, decreasing the amount of electrical resistance across the transistor and allowing an electrical current to flow between the collector and emitter. In short, one current can be used to ‘turn on’ another.

Transistor radios use this principle to amplify the signal they receive into a loud, clear sound, and if you crack one open you should be able to see some (well, if you know what you’re looking for). However, computer and manufacturing technology has got so advanced over the last 50 years that it is now possible to fit over ten million of these transistor switches onto a silicon chip the size of your thumbnail- and bear in mind that the entire Colossus machine, the machine that cracked the Lorenz cipher, contained only ten thousand or so vacuum tube switches all told. Modern technology is a wonderful thing, and the sheer achievement behind it is worth bearing in mind next time you get shocked over the price of a new computer (unless you’re buying an Apple- that’s just business elitism).

…and dammit, I’ve filled up a whole post again without getting onto what I really wanted to talk about. Ah well, there’s always next time…

(In which I promise to actually get on with talking about computers)

The Great Madiba*

I have previously mentioned on this blog that I have a bit of a thing for Nelson Mandela. I try not too bring this up too much, but when you happen to think that someone was the greatest human who has ever lived then it can be a touch tricky. I also promised myself that I would not do another 1 man adulation-fest for a while either, but today happens to be his ninety fourth (yes, 94th) birthday, so I felt that one might be appropriate.

Nelson Mandela was born in 1918 as the son of a Xhosa tribeschief, and was originally named Rolihlahla, or ‘troublemaker’ (the name Nelson was given to him when he attended school). South Africa at the time was still not far out of the Boer war, which has been a difficult one for historians to take sides in- the British, lead by Lord Kitchener of the ‘Your Country Needs You’ WWI posters, took the opportunity to invent the concentration camp whilst the Dutch/German descended Boers who both preached and practiced brutal racial segregation. It wasn’t until 1931 that South Africa was awarded any degree of independence from Britain, and not until 1961 that it became officially independent.

However, a far more significant political event occurred in 1948, with the coming to power of the National Party of South Africa, which was dominated by white Afrikaners. They were the first government to come up with apartheid, a legal and political system that enforced the separation of white & black South Africans in order to maintain the (minority group) whites’ political power. Its basic tenet was the dividing of all people into one of four groups. In descending order of rank, they were White, Coloured, Indian (a large racial group in South Africa- in fact a young Mahatma Gandhi spent a lot of time in the country before Mandela was born and pioneered his methods of peaceful protest there) and Black. All had to carry identification cards and all bar whites were effectively forbidden to vote. The grand plan was to try and send all ‘natives’ bar a few workers to one of ten ‘homelands’ to leave the rest of the country for white South Africans. There were a huge number of laws, many of which bore a striking resemblance to those used by Hitler to segregate Jews, to enforce separation (such as the banning of mixed marriages), and even a system to be up- (or even down-) graded in rank.

Mandela was 30 when apartheid was introduced, and began to take an active role in politics. He joined the black-dominated African National Congress (ANC) and began to oppose the apartheid system. He originally stuck to Gandhi’s methods of nonviolent protest and was arrested several times, but he became frustrated as protests against the government were brutally opposed and he began to turn to more aggressive measures. In the early sixties he co-founded and lead the ANC’s militant (some would say terrorist) wing, coordinating attacks on symbols of the Apartheid regime. This mainly took the form of sabotage attacks against government offices & such (he tried to avoid targeting or hurting people), and Mandela later admitted that his party did violate human rights on a number of occasions. Mandela was even forbidden to enter the United States without permission until 2008, because as an ANC member he had been classified a terrorist.

Eventually the law caught up with him, and Mandela was arrested in 1962. Initially jailed for 5 years for inciting workers to strike, he was later found guilty of multiple counts of sabotage and sentenced to life imprisonment (only narrowly escaping the death penalty, and once turning up to court in full Xhosa ceremonial dress). He was transported to the imfamously tough Robben Island prison and spent the next 18 years, between the ages of 45 and 58, working in a lime quarry. As a black, and a notorious political prisoner, Mandela was granted few, if any, privileges, and his cell was roughly the same size as a toilet cubicle. However, whilst inside, his fame grew- his image of a man fighting the oppressive system spread around the world and gained the apartheid system notoriety and hatred. In fact, the South African intelligence services even tried to get him to escape so they could shoot him and remove him from his iconic status. There were numerous pleas and campaigns to release him, and by the 1980s things had come to a head- South African teams were ostracised in virtually every sport (including rugby, a huge part of the Afrikaner lifestyle), and the South African resort of Sun City had become a total pariah for almost every western rock act to visit, all amidst a furious barrage of protests.

After Robben Island, Mandela spent a further 9 years in mainland prisons during which time he refined his political philosophy. He had also learned to speak Afrikaans and held many talks with key government figures who were overblown by both his physical presence (he had been a keen boxer in his youth) and his powerful, engaging and charming force of personality. In 1989, things took a whole new turn with the coming to power of FW de Klerk, who I rate as the South African equivalent of Mikhael Gorbachev. Recognising that the tides of power were against his apartheid system, he began to grant the opposition concessions, unbanning the ANC and, in 1990, releasing Mandela after nearly three decades in prison (Mandela holds the world record for the longest imprisonment of a future president). Then followed four long, strained years of negotiations of how to best redress the system, broken by a famous visit to the Barcelona Olympics and a joint awarding, in 1993, of the Nobel Peace prize to both Mandela and de Klerk, before the ANC got what it had spent all its years campaigning for- the right for black citizens to vote.

Unsurprisingly Mandela (by now aged 75) won a landslide in the elections of 1994 and quickly took apart the apartheid regime. However, many white South Africans lived in fear of what was to come- the prospect of ‘the terrorist’ Mandela now having free reign to persecute them as much as he liked was quite terrifying one, and one that had been repeated multiple times in other local African nations (perhaps the best example is Zimbabwe, where Robert Mugabe went from the first black leader of a new nation to an aggressive dictator who oppressed his people and used the race card as justification). Added to that, Mandela faced the huge political challenges of a country racked by crime, unemployment and numerous issues ranging from healthcare to education.

However, Mandela recognised that the white population were the best educated and controlled most of the government, police force and business of his country, so had to be placated. He even went so far as to interrupt a meeting of the national sports council to persuade them to revoke a decision to drop the name and symbol of the Springboks (South Africa’s national rugby side, and a huge symbol of the apartheid regime) to try and keep them happy. His perseverance paid off- the white population responded to his lack of prejudice by turning a boom in international trade caused by apartheid’s end into a quite sizeable economic recovery. Even Springboks became unifying force for his country, being sent off to coaching clinics in black townships and being inspired to such an extent by Mandela and his request for South Africans of all creeds to get behind the team that they overcame both their underdogs tag and the mighty New Zealand (and more specifically their 19 stone winger who ran 100m in under 11 seconds, Jonah Lomu) to win their home World Cup in 1995, igniting celebrations across the country and presenting South Africa as the Rainbow Nation Mandela had always wanted it to be. Despite his age, declining health he would only ever sleep for a few hours every night (claiming he rested long enough in prison). donated a quarter of his salary to charity on the grounds that he felt it was too much, and had to juggle his active political life around a damaged family life (his second wife having divorced from him & his children having some disagreements with his politics).

It would have been easy for Mandela to exact revenge upon his former white oppressors, stripping them of their jobs, wealth and privilege in favour for a new, black-orientated system- after all, blacks were the majority racial group in the country. But this is what makes Mandela so special- he didn’t take the easy option. He was not, and has never been, a black supremacist, nor one given to knee-jerk reactions- he believed in equality for all, including the whites who had previously not extended such a fair hand to him. He showed the world how to ‘offer the other cheek’ (in Gandhi’s words), and how to stand up for something you believe in. But most importantly, he showed us all that the world works best when we all give up thoughts of vengeance, and petty selfishness, and we instead come together as a brotherhood of humanity. Mandela’s legacy to the world will none be of his brilliant political mind, nor the education, healthcare or economic systems he put in place to revive his country, or even the extraordinary dedication, perseverance and strength of will he showed throughout his long years behind bars. Nelson Mandela taught the world how to be a human being.

*Madiba was Mandela’s Xhosa name, and he is referred to affectionately as such by many South Africans