Hayek vs Keynes Rap - For Geeks Only..
Khanan Grauer // I'm the founder of Investio and once in a blue moon, I post my thoughts here. You can reach me at kgrauer@gmail.com
It’s fascinating to see how much buzz was generated around the iPad. Way, way before launch, rumors ran wild and the press enjoyed every bit of it. I don’t remember seeing anything so hyped up in a long time.
People said things like it’s an ‘iPhone for old people.’ And perhaps there is truth to that - it’s a giant iPhone. People look at that and ask ‘where is the innovation?’
Take a step back. What I think people are missing is the notion that Apple pioneered the iPhone, that very interface that changed the way we interact with cell phones. The interaction made possible by touch, and the rapidly growing application market turned the iPhone into a thing from the future. People look at that as a ‘thing of the past.’ Funny, how quickly we forget.
OK, now we got a giant iPhone. So what? Steve Jobs positioned the tablet as a device in between the cell phone and a laptop. That was the explicit message.
The implicit message is very different. The tablet aims to completely change our interaction with hardware and software. There is no more room for a laptop. No more room for a keyboard and a mouse. Those are the things of the past. The iPad is not intended to be a ‘middle’ device implicitly.
What I think people are missing is rushing to judge the device immediately on what it offers. It’s missing a camera, an X port, etc. The real value is the extra display real estate offered on the device. Think about the apps of the future. The iPhone pioneered touch and how we consume and interact with information. Browsing, gaming, watching videos, and so on from a device that fits in our pocket. The app platform took off and now there’s so many apps that we don’t know what to do with. Playing with the apps available on the iPhone can be a full time job. But what’s missing from the iPhone/iPod family is a native ability to create things. It’s difficult to write email, to draw, to do anything creative that is much easier on a laptop with a large screen, mouse and keyboard. Having the extra horse power that the iPad offers, and a proven platform where developers are actively engaged, opens up a new door in our industry. Someone told me: the developer is now the ultimate end user. I can’t even begin to imagine the creative applications of the future. What really jumped at me is iWork and the re-design that took place specifically for the tablet. That is the sort of innovation I’m talking about. Imagine a Photoshop app? Imagine OmniGraffle? As developers get their hands on the SDK and start rolling out future apps intended for the tablet, then I think people will get it. Judging it right now on what it’s capable of does not serve it justice.
Looking ahead, what is really needed from a PC/Mac? Mac OS X? We see that the innovation is shifting from the OS to the web. The web has pioneered tons of applications and ways we work. I use Gmail for all email, Outlook is gone for example. Perhaps the desktop/laptop will belong to the hardcore users that need the extra power. For myself, having the tools I need on a tablet device would eliminate the laptop. Need heavy computing resources? That's located in a cloud.
It’s also interesting to note that Apple is a closed system. There are pros and cons for that. However, another thing that strikes me is the Google vision where apps are in a browser - not downloaded as third parties. I think that is the fundamental difference in vision between the titans. It also strikes me that the titans are trying to figure it out - i.e. Android vs. Chrome OS.
Lastly, when I see people saying ‘it’s missing this’ and ‘it’s missing that’ - that shows only that there is demand and leaves room for improvement. No I don’t work at Apple and applaud them for making big, gutsy moves to change the order of things. Respect.
Update***
I mentioned OmniGraffle in this post and have recently encountered this: http://blog.omnigroup.com/2010/01/29/ipad-or-bust/
The revolution has begun!
I have been reading Ayn Rand "Capitalism: The Unknown Ideal" and while it's fascinating, there are two fundamental arguments that it fails to answer. (These are two that I see, there may very well be more)
The argument that the world should be left to laissez faire economics is a fine one, however:
1. How will laissez faire work to resolve negative externalities? An externality is an outcome of an economic transaction where there is an impact on a third factor that is not directly involved. For example, a power plant that deals with supply and demand of its business negatively affects pollution of the air. While say, unregulated, power plants compete for business: figure out the cheapest way to produce most power - what is the incentive for them not to pollute the air? More on economic externalities here.
2. While I'm a huge believer in free, unregulated markets: how does this hold up in third world countries, specifically where there is a high death rate from malaria? Bill Gates interestingly said that more money is being invested in R&D of male pattern hair loss vs. curing malaria victims in poor countries. After all, people in those countries do not have the money to afford drugs - hence what is the incentive to invest in producing drugs to those countries from a free market perspective? Free markets thrive on only one factor: markets. This, among other reasons, is why Bill Gates formed the philanthropic foundation: address those where free markets fail. I cannot find the link, however remember reading where Bill Gates & Warren Buffet talk of 'creative capitalism' to address these failures in great detail.
I wonder how fans of Ayn would approach these two points. Overall, I highly recommend reading the book as it's super thoughtful and stimulating.
Below are videos I found posted by Brad Feld. It's a fascinating interview of Ayn Rand by Mike Wallace on Objectivism in 1959:
I think this will be a very tough battle: http://www.nytimes.com/2010/01/21/business/21volcker.html?hp
This is probably one of the best papers I have seen on the subject. Although I did not perform a study on my own, I have had the pleasure of interacting with a bunch of entrepreneurs. The arguments in this paper nail it.
The paper makes an insightful distinction between causal reasoning and effectual reasoning. Causal rationality begins with a pre-determined goal and a given set of means. In IT for example, causal reasoning is we need to built this architecture to support business X – here is how we are going to do it (step by step). Causal reasoning, according to this paper, is also what we learn in school. Effectual reasoning does not begin with specific goals. Opposed to causal reasoning, there are a given set of means that allows goals to emerge contingently over time from the varied imaginations and diverse aspirations of the founders and the people they interact with. Basically navigating in unchartered waters in the hopes of discovery. Key word here is ‘discovery.’ This may sound a bit crazy. But then, I will reference a quote (not from this paper) that to me re-enforces this view:“All progress depends on the unreasonable man” - George Bernard ShawLastly, this paper has incredible humor, as can be seen by this note:
