Random Musings

Must watch! Rumsfeld in playful mood ...

2006-11-23T01:08:00.000+08:00

Is this it? Wireless power!

2006-11-21T21:38:00.000+08:00

Cut the cables
Nov 16th 2006
From The Economist print edition

A practical way to recharge gadgets without plugging them in

ALTHOUGH the laws of physics cannot be altered at whim, scientists are adept at manipulating the world to sidestep this inconvenience. One such deft manoeuvre has just been proposed by physicists who have worked out how to recharge the batteries in mobile phones and laptop computers without using power cables.

Physicists have known how to transmit power wirelessly for almost two centuries. Michael Faraday discovered in 1831 that an electric current flowing in a wire induces a secondary current in a neighbouring wire. The principle is exploited in devices from electric motors to power transformers. The problem is that the energy is transmitted in all directions, which means that power is lost rapidly with distance. To exploit the effect, the wires have to be so close as to be almost touching. The alternative—pumping up the power—would zap people with rather too much electromagnetic radiation to be entirely safe.

Marin Soljacic and his colleagues at the Massachusetts Institute of Technology have devised a solution to this problem. They propose to transmit power using what are known as “non-radiative” fields and to distribute the electromagnetic energy so that it is carried by the magnetic rather than the electric part of the field. Because magnetic fields interact much less strongly than electric fields with most types of matter—including, most importantly, people—the transmission of power would be both more efficient and considerably safer. They reported their work to the industrial physics forum held by the American Institute of Physics in San Francisco this week.

One of the most promising layouts, according to the researchers, is to have a simple loop of wire connected to the mains and stuck to the ceiling. They showed that the electric field is confined near the ceiling, leaving only the magnetic field to transfer the energy to a smaller receiving loop a few metres away. This could be placed on, say, a laptop or mobile phone.

Non-radiative fields also have a second advantage. The energy can be gathered only by gadgets specially designed to “resonate” with the field. Most of the energy not picked up by a receiver can be reabsorbed by the emitter. The proposed system has an overall efficiency of 40% and Dr Soljacic hopes to boost this by tinkering with the materials and layout. The idea would be to install a source in each room of an office building, factory or home, giving wireless power throughout.

Here's the link

Bye and thanks, Mr. Friedman

2006-11-18T01:27:00.000+08:00

Milton Friedman, economist, dies aged 94
By Samuel Brittan
Published: November 16 2006 17:58 Last updated: November 16 2006 17:58

Milton Friedman, who has died aged 94, was the last of the great economists to combine possession of a household name with the highest professional credentials. In this respect he was often compared to John Maynard Keynes, whose work he always respected, even though he to some extent supplanted it.

Moreover, in contrast to many leading economists, Friedman maintained a continuity between his Nobel-Prize winning academic contributions and his current journalism. The columns he contributed to Newsweek every third week between 1966 and 1984 were a model of how to use economic analysis to illuminate events.

Both his admirers and his detractors have pointed out that his world view was essentially simple: a passionate belief in personal freedom combined with a conviction that free markets were the best way of co-ordinating the activities of dispersed individuals to their mutual enrichment. Where he shone was in his ability to derive interesting and unexpected consequences from simple ideas. As I knew from my postbag, part of his appeal lay in his willingness to come out with home truths which had occurred to many other people who had not dared to utter them. Friedman would then go on, however, to defend these maxims against the massed forces of economic correctness; and in the course of those defences he, almost unintentionally, added to knowledge.

Those who wanted to write him off as a right-wing Republican were disabused by the variety of radical causes he championed. I was not impressed in my own student years by the claims to a belief in personal freedom of the pro-market British economists whom I first encountered. It was not until I came across Friedman, and learned that he had spent more time in lobbying against the US “draft” than on any other policy issue, that I began to take seriously the wider philosophic protestations of the pro-market economists.

Friedman's iconoclasm endured. He regarded the anti-drugs laws as virtually a government subsidy for organised crime. Even in the financial sphere, he espoused causes such as indexed contracts and taxes as a way of mitigating the harm done by inflation which did not endear him to natural conservatives.

But there was no self-conscious balancing of the political ticket in these positions. He adopted them by following the argument wherever it led. Unlike his fellow exponent of free market capitalism, Friedrich Hayek, he had no great patience for hidden truths that might be embedded in inherited attitudes, rules and prejudices.

There was indeed nothing of the Herr Professor about Friedman. A small voluble figure, he preferred the spoken to the written word, and he took to television as a duck to water. He came to add a good many subtleties to the book Free to Choose, which he wrote with his wife Rose, which were not in the broadcast version. But there is no systematic treatise except some written-up lecture notes outlining Friedmanite economics or even Friedmanite monetary theory.
Those who were won over by his unexpected charm sometimes underestimated his resolve. He would not give a millimetre where his convictions were at stake. Although an unassuming and essentially democratic personality, he was human enough to be aware of, and enjoy, his reputation in the last decades of his life.

His professed attitude to the political process was that of the critical Public Choice theorists. The latter believe that legislators follow their self-interest in a highly defective political marketplace in which geographical and industrially-concentrated special interest groups gain at the general expense. But Friedman's ingrained belief in the power of reason and persuasion always got the better of any such theoretical misgivings. Although he occasionally professed gloom about the future of freedom, such forebodings were best left to the central Europeans whom he met at the Mont Pelerin Society. Friedman himself was an optimistic American to his fingertips.

Early Years

His own career was an archetypical American success story. He was born in New York in 1912 to poor immigrant parents and his father died when he was 15. He nevertheless studied at Rutgers and Chicago. In the 1930s he was on the staff of various research organisations and began an association with the National Bureau of Economic Research, which lasted until 1981 and which sponsored some of his most important work.

In 1938 he married Rose Director, herself an economist who was the co-author of some of his more general books. The closeness of his family life was an important clue to the man. His family circle included his wife's brother, Aaron Director, an economist who published little but whose wisdom was much cherished in the Friedman circle. His son David, in an attempt to avoid following in his father's footsteps, became at first a physicist, but eventually found the lure of socio-economic arguments too difficult to resist. His father was highly tolerant of David's excursions into anarchocapitalism preferring deviations in that direction to lapses towards the conventional left.

During World War Two Friedman not only worked for the US Treasury on tax, but had a spell in the statistical war research group at Columbia. He became professor of economics at Chicago in 1946, where he remained until his retirement. Friedman's own earliest work was in mathematical statistics, where he helped to pioneer some methods, for instance in sampling, which are still in use.

His first work of wider appeal was a study with Simon Kuznets, published in 1945, of income from independent professional practice. The authors found that state control of entry into the medical profession kept up the level of fees to the detriment of patients. These findings never ceased to get under the skin of the profession.

Friedman's next book, Essays in Positive Economics, published in 1953, contained a famous essay on method. While many other economists were embarrassed by the over-simplified view of human nature in much economic theory, he was characteristically non-apologetic. The fruitfulness of a theory, in both the physical and the social sciences, he declared, depended on the success of the predictions which could be made with it and not on the descriptive realism of the assumptions. One of his famous examples was the proposition that the leaves of a tree spread themselves to maximise the area of sunlight falling upon them. The value of the theory depended on whether the layout of the leaves corresponded to this prediction and not on whether the tree made any such conscious effort.

This essay generated a still-running controversy which has consumed many acres of forest. But Friedman, having issued his manifesto, left others to argue about it and was more concerned to apply it in practice. Similarly, in his later expositions of the case for capitalism, he stated his own values, and cited corroborative evidence, but resisted the temptation to argue about theories of freedom, justice, the state and so on.

Friedman's methods came as a breath of fresh air to many of the academic defenders of market capitalism who had previously felt themselves to be beleaguered armchair thinkers in contrast to the econometricians and other quantitative researchers who claimed to be the wave of the future and wanted to use their methods for planning and intervention. Here at last was somebody who could hold his own with the most advanced of whiz kids and was quicker on his feet than most of them, but who was on the side of the market indeed with far fewer reservations and qualifications than most of its other supporters.

Despite the unfashionable nature of his policy views, Friedman spoke the same language as the post-war Keynesians, fitted equations to time series and provided a new field for economists in the investigation of “demand for money” functions. Indeed, his contribution was essential. For if age-old verities about the relations between money and prices, or the futility of nations trying to spend themselves into full employment were to be rehabilitated, it had to be in modern statistical dress.

Friedman in Cambridge

I first met Friedman in the 1950's when I was a second-year undergraduate at Cambridge where he had come on a sabbatical. Unfortunately, I had to share supervisions with another student who had no difficulty in deflecting him into general political conversation. Friedman once arrived early and started to read a copy of Shaw's contribution to Fabian Essays which was lying on the table. “There are three mistakes in the first few pages,” he said, referring to Shaw's excursion into marginal productivity theory in which he thought he could instruct his less well-read fellow Fabians.

For all Friedman's charm, I received from him one of the best put-down remarks I have ever encountered. He mentioned to me a letter he had received from Arthur Burns (later chairman of the Fed) saying that Eisenhower was turning out well as President. I expressed surprise, to which Friedman responded: “First, Burns has much better knowledge of Eisenhower. Secondly, given equal knowledge, I would prefer his opinion to yours.”

In the 1950s, Friedman was much better known for his advocacy of floating exchange rates than for monetarism. The background was the widespread concern about a supposed dollar shortage, which Friedman believed entirely due to overvalued exchange rates in Europe and elsewhere. “Sure,” he would say, “there is a dollar shortage in Britain - in exactly the same way as there is a dollar shortage for every US citizen.” He had the last laugh, as within a few years the supposed dollar shortage had turned into an equally mythical dollar surplus.

What I did not discover until many years later was that Friedman had been spitefully frozen out of much of the intellectual life of the Cambridge Economics Faculty. For instance, there was an absurdly-named “secret seminar” that discussed capital theory, where Friedman could have helped very much by cutting through some of the mathematical problems and bringing out the essentials, but from which he was excluded.

What dismayed him most were the illiberal attitudes of some in the faculty who were theoretically on his side. An example was the late Professor Sir Denis Robertson, who always maintained reservations about Keynes and who advocated zero inflation decades before that became fashionable. But he shocked Friedman by defending vigorously the right of County Agricultural Committees to dispossess farmers they deemed inefficient. The Chicago professor's admiration for the founding fathers of British economics became tinged with perplexity at what so many contemporary English people were inclined to assert.

“Permanent Income” and Money

During the rest of his career, Friedman was largely occupied with the empirical testing of economic ideas. His major achievement was his Theory of the Consumption Function, published in 1957. which was the work most prominently mentioned in the citation for the Nobel Prize which he won in 1974. His investigation was touched off by a well known paradox. Cross-section data appeared to show that the percentage of income saved increased as income rose. On the other hand, time series data showed much less change in the savings proportion over the years. The resolution of the puzzle was that spending and savings decisions depended on people's views of their long-term (“permanent”) income; but they were much less inclined to adjust to transitory income variations in either direction.

These findings had at least two implications which Friedman cherished. One was that capitalism did not after all suffer from a long-term tendency to stagnate because of under-consumption. Another was that fiscal fine-tuning would be very difficult, as consumers would ignore temporary variations in disposable income due to government budgetary tightening or relaxation. Here indeed is the clue to why Chancellor Kenneth Clarke's 1994 tax increases did not have the recessionary effects so widely predicted. Friedman's Consumption Function was so thorough and convincing in its marriage of theory and data that it convinced many economists who far from relished the political implications.

It was in the late 1950 and 1960s that Friedman developed the monetarist doctrines by which he became best known. He treated money as an asset. The public desire to hold this asset depended on incomes, the rate of interest and expected inflation. If more money became available the effect would be initially to raise real output and incomes, but eventually just to raise prices more or less in proportion. Here was where the famous ‘long and variable lags' appeared: typically nine months before real output and income were affected and a further nine months before the main effects on prices came through. These time periods were much cited and much derided; but they were not the heart of Friedman's message.

The stock response of the anti-monetarists was to say that the money supply adjusted passively to events such as wage explosions or government deficits. Although this sometimes occurred it was important for Friedman to establish that this was not always the case. Sometimes money was the active agent, whether because of an inflow of gold, an official easy money policy, an attempt to maintain a particular exchange rate, or whatever.

Monetary History and Monetarism

The book in which he tried most fully to demonstrate money's active role was A Monetary History of the US, 1867-1960, published in 1963 and written jointly with Anna Schwartz it was one of Friedman's skills that he always found the right collaborator for a particular work. The Monetary History is Friedman's masterpiece. Containing hardly any equations, it has been read with profit and pleasure as history, even by people who have disagreed with, or been indifferent to, the doctrines it was designed to advance. Characteristically, it began as a by-product of an attempt to establish the factual record of the US money supply, which turned up so many problems and brought to light so much new material that the more ambitious volume more or less suggested itself.

A later attempt by the same two authors at a more formal equation-based approach, concentrating on cyclical averages and covering the UK as well, was not as successful. There were so many snags that the results did not appear until 1982; and the authors themselves admitted that they were hardly worth the effort. They particularly regretted the time spent on extending the analysis to the UK, which had not yielded much extra light. The scholarly debate on the new work was itself delayed for nearly another decade, partly because of the attempts of British anti-Thatcherites to harness the analysis of Friedman's critics for their own political purposes. One day the story will be told.

The policy conclusion Friedman drew was his famous money supply rule a stable growth of the money supply, year in year out. He accepted that this was not the only policy that could be derived from monetarist findings. But nearly all suggested monetarist strategies became embroiled in difficulties as financial assets proliferated and with them the number of rival definitions of money. In the early 1990s some monetarists were accusing the Fed of depressing the US economy with too tight a policy and at the same time as other monetarists were criticising it for expanding too much.

Friedman himself sometimes gave the impression that whatever a central bank did, it could do no right. To gain his favour it had not only to pursue monetary targets, but pursue them by a particular method known as monetary base control; and when the Fed attempted such a method in 1979-82 it was damned for getting the mechanics wrong.

No Inflation-Jobs Trade-off

Some economists would argue that Friedman's most important contribution to macroeconomics lay, not in his technical monetary work, but in his 1967 presidential address to the American Economic Association. Here he demonstrated that the idea of a stable trade-off between inflation and unemployment which held sway under the name of the Phillips curve and which seemed to give policymakers a menu of choices was invalid. Suppose that a Government or central bank tried to raise output and employment at the expense of accepting higher inflation. Once market participants started to take into account inflation in their behaviour, the economy would eventually end up with the same rate of unemployment as before but a higher rate of inflation. If the authorities none the less persisted in trying to achieve an over-ambitious target unemployment rate, the result would not be merely inflation, but accelerating inflation, with which no society could live for long.

This family of Friedman doctrines was sometimes called the vertical Phillips curve, sometimes the accelerationist hypothesis and sometimes the ‘natural rate' of unemployment.The latter was the level at which the economy would settle once any stable rate of inflation had been established. The name was later changed by some users to the Nairu the non-accelerating inflation rate of unemployment to banish the idea that there was anything natural or inevitable about it.

It was in fact these ideas related to the Nairu which caused my own conversion from post-war Keynesianism rather than any of Friedman's more technical monetary ideas. The basic propositions are now quite familiar. But at the time they were explosive stuff for the British economic establishment and also for many American economists on the Eastern seaboard.
Some economists treated the Nairu as a new technocratic concept which they set about estimating and using for still more sophisticated forms of demand management. This was contrary to the spirit of Friedman's address, where it was were obviously intended as a warning against government attempts to spend their way into pre-determined levels of employment. The Friedman ideas achieved popular currency in the UK amazingly enough as a result of prime minister Callaghan's address to the 1976 Labour Party conference when he warned against believing that governments could spend their way into full employment.

All the same it was a little disappointing to those who were interested in macroeconomics rather than monetary technicalities that Friedman did not make more use of the Nairu in his more popular writings. Indeed he sometimes seemed to stretch his own doctrines in attributing to short term variations in monetary growth the responsibility for recessions about which he could be as critical as any Keynesian.

Relations with Thatcher

Friedman's direct influence on Margaret Thatcher was much less than often supposed. Although they got on together at a private dinner before the 1979 election, the two did not know each other well and Friedman is only mentioned en passant in the former prime minister's memoirs. Her own inspiration, as she relates, came from Hayek.

Nevertheless, Friedman had an obvious, if indirect, effect on many of her advisers and ministers. The Medium Term Financial Strategy of the 1980s, with its target of a gradual reduction in the growth of the money supply and the abandonment of fine tuning, obviously stemmed at one remove or another from the Chicago economist.

But the master himself disowned the MTFS because the Bank of England continued to regulate the money supply through interest rates rather than via the monetary base. Moreover, he did not believe that reducing the Budget deficit would have much effect on interest rates or in any other way deserved the prominence given to it in the MTFS. On a broader front, however, without Friedman's writings and television expositions, the Thatcher government would not have enjoyed even that very limited degree of approval that it did among a minority of the intellectual elite.

A Working Retirement

From the late 1970s onwards Friedman lived in San Francisco. He obviously enjoyed his working retirement in this more clement climate, within easy reach of his office at the Hoover Institution in Stanford. Rose was even more obviously delighted with the move.

The very modernity of Friedman meant that he was vulnerable in his technical findings to new researchers claiming to refute his work by still more up to date statistical methods. Indeed, Friedman lived long enough to see a reaction against basing economics on discoverable numerical relationships and the revival of so-called Austrian methods which concentrated on predicting general features of interacting systems on the lines of biology and linguistics. But a methodological dialogue between different schools of free market economists would not have been possible without Friedman's initial dislodgment of the collectivists from the scientific high ground.

In the last couple of decades of his life, Friedman kept his distance from the New Classical Economics which was based on rational expectations and rapid market clearing. He feared that economists were being trapped into a search for mathematical rigour and elegance for their own sake instead of as tools for investigating what was happening.

Outside monetary affairs Friedman remained a mainstream economist. As he himself wrote in Capitalism and Freedom (a book published in 1962 which meant went much deeper than Free to Choose) he could offer no hard and fast line for the limits of government intervention. But he believed that an objective study of the facts, case by case, combined with an underlying belief in personal choice, would usually swing the argument in favour of private provision in the market place. His friend, Sir Alan Walters, has expressed regret, however, that he did not in his last decades devote more effort to scholarly work outside the monetary field.

Friedman himself attributed the spread of both free markets and monetarist ideas to belated recognition of the consequences of soaring government spending and high inflation in the 1970s. But so far as the reaction was coherent and rational, much of the credit must go to him. The very success of free market policies has, of course, led to fresh problems; and what would one not give for a reborn 30-year-old Milton Friedman to comment upon and analyse these new challenges?

Google Docs is here

2006-10-14T01:10:00.000+08:00

Now that I am writing so much at the job it requires extra efforts to find the energy to update this blog. I'll try to keep these blog posts light so I can blog more often.

Google Docs finally arrived. My collegue tried it out and had nothing but high praises particularly for the ease of collaboration. MS Office used to make up half of Microsoft's profits. Don't know if still true today. It'll be very interesting to see how Microsoft responds to what could be the biggest threat to its cash cow.

I've been using Gmail for some of the document works, and Editgrid for spreadsheets. The connection isn't always smooth but for now Editgrid is more complete than Google Spreadsheets. Met the team behind it. Bright young guys. Alas, you don't see teams like that often in HK.

Time to wake up

2006-08-13T01:26:00.000+08:00

In case you've missed it, Justin left me a comment a while ago:

"Okay, the WC has been over for more than a week now. Time to wake up from your drunken stupor and get blogging!"

Indeed.

The other day I went to Chris Patten's book-signing thing. There were no more than two dozens people when I got there, yet I managed to bump into a UM friend, a middle-school friend, an ex-collegue from YA, and an ex-biz partner/supplier - not something I encounter everyday. Anywayz, had a small chat with Patten. He was very charismatic - which isn't surprising given his root as a politician who's risen through elections after elections. I bet if you layout photographs of all US presidential candidates and pick out the most charismatic / leader-like one from each election, you'll have picked the winner 90%+ of the time. Just a thought.

IPTV scores in World Cup

2006-06-15T14:15:00.000+08:00

Our TV at home is showing its age. It looks like it's self-imposed a 3-hour-per-day quota. After 3 hours, it will switch off itself and refuse to boot up until the next day. In this World Cup period, which is conceivably the most inconvenient time for this to happen, this means we can only watch 1.5 matches per-day max.

On the night of S. KOR vs TOG, FRA vs SWI and BRA vs CRO, we brought home a small old TV stored away at the office. We checked before we carried it home to make sure it still worked. We got home, plugged in the cable and the cord, and it was on! Great! ... except that the channel up / down buttons were not working. It would only show the Channel 1 while all the World Cup actions were happening on the Channel 5. We couldn't find the remote, which has probably been lost years ago, so here's this small old TV, sitting in the middle of the dining room, with no value to our cause whatsover.

We ended up watching the second and third matches on the internet, live and for free. Given it's the internet, the quality was actually not as bad as I expected. The only caveat was that the mandarin-speaking female commentator seemed less than enthusiastic. Starting from the next World Cup, or perhaps the one afterwards, the quality of free live internet broadcasts may have risen to such a degree that we shall no longer be stuck with Cable.

Welcome to the world of IPTV.

Note: World Cup has stolen my blogging time plus reading time plus half of my sleeping time. This blog will be updated less frequently until this party ends.

Let's get it cracking ...

2006-06-09T14:13:00.000+08:00

The wait is over. Let the party begin!

PS3

2006-06-08T13:53:00.000+08:00

In another post I mentioned that the Microsoft lost $150 per original Xbox sold. In an article from the latest issue of Fortune, it's said that each PS3, scheduled to debut in November, is poised to be sold at a loss over $200 apiece, despite the $499 price tag (basic version; $500 for enhanced). That will translate into $1 billion of loss for 2006 if it hits the target of selling 4 million by the end of the year.

The potential prize? A share of the $26.6 billion-a-year video-game market. Plus, Sony could populate the world with millions of Blu-ray HD DVD players and thus making it a de facto standard.

An Inconvenient Truth

2006-06-06T12:42:00.000+08:00

I've been waiting for quite a while to see Al Gore's "An Inconvenient Truth", which has earned the following comment from Roger Ebert:

"In 39 years, I have never written these words in a movie review, but here they are: You owe it to yourself to see this film. If you do not, and you have grandchildren, you should explain to them why you decided not to."

From what I've heard, the movie could well succeed in motivating its viewers to conserve and innovate to save planet Earth. I hope it does.

(Thanks to Justin for pointing me to Ebert's review)

Paying dues

2006-06-05T15:37:00.000+08:00

In the long history of civilizations, economic and political freedom is a very recent thing, more so than we tend to realize. 99.9% of all men that have lived did not live a single day in a free society where everyone is born with equal right to pursue whatever he sets to pursue as long as his pursuit doesn't intervene others'. We owe it to the philosophers and soldiers and statesmen and all the unsung heroes who have risked lives and spilled blood to fight in the name of freedom, and we owe it to them to pass the torch to those who come after us.

Any way you see it, this is a bargain for us.

Tasmania!

2006-06-02T01:05:00.001+08:00

The other day I met a new friend who has just returned to HK after spending 12 years of "exile" in - of all the places in the world - Tasmania! (No, that's NOT a picture of my friend)

Why the exclamation, you ask? Well, she's the first person I personally know who's been to this island featured in one of my favorite books, Jared Diamond's Gun Germs and Steel. What makes Tasmania special is that it was "the most extreme outpost of the most extreme continent." It was part of Australia until 10,000 years ago when the land bridge in between was severed by rising sea level. Those who walked to Tasmania from Australia before the flood would never get to see another thing from the mainland. Tasmania has lost all contacts with the outside world - for 10,000 years - until the Europeans arrived in 1642.

Jared Diamond uses Tasmania as an example to illustrate the significance of small population size and isolation for the pace of development. Here's his description of the state of Tasmania when the Europeans arrived,

"Tasmania was occupied by 4,000 hunter/gatherers related to mainland Australians, but with the simplest technology of any recent people on Earth. Unlike mainland Aboriginal Australians, Tasmanians couldn't start a fire; they had no boomerangs, spear throwers, or shields; they had no bone tools, no specialized stone tools, and no compound tools like an axe head mounted on a handle; they couldn't cut down a tree or hollow out a canoe; they lacked sewing to make sewn clothing, despite Tasmania's cold winter climate with snow; and, incredibly, though they lived mostly on the sea coast, the Tasmanians didn't catch or eat fish. How did those enormous gaps in Tasmanian material culture arise?"

Learn more about Tasmania and allegedly the last Tasmanian Aborigine (the one in the picture).

Golden days of movie-going?

2006-06-01T00:34:00.000+08:00

During a family dinner, the TV popped an ad of the newly-remade "Poseidon" which Roger Ebert described as "perfunctory". My brother and I have watched the original in primary school as it was part of the - if I remember correctly - "English literature" curriculum. Dad said he watched it in the theater. His brief description of the experience was not unlike what I've read in today's Ma Ka Fai's column in MingPao. You get the feeling that going to the cinema back in those days is a very different experience from that nowadays. I was trying to ask for Mr. Ma's permission for reprinting parts of it here but I couldn't find his email address. If you do know his email address, please kindly let me know. Meanwhile, let me take the liberty to print the following excerpt:

荷李活流行重拍經典，像把果肉咬光，果核吐進泥土裡，過了一段時間便會再次發芽茁壯，只因土壤營養厚實，支撐得起幾季收成。

於是，《海神號歷險記》又來了，踏入戲院，你有機會重驗塵封了廿多年的悲喜與驚惶。

上回看《海神號》，你幾歲？恐怕比自己的孩子還年輕。好像是在銅鑼灣豪華戲院，伊斯曼七彩闊銀幕，炎炎夜裡，一家老幼在電影院門外買了一堆烤魷魚、炒栗子之類的熱燙小食，走進黑暗，張開眼睛，迎接一場海上災難。

‧‧‧

舊戲如今有了新顏，有若老友回魂，前世今生，你抱著叙舊的心情進場看戲，角色雖已交由不同的人演繹，但你仍然看得津津有味，因為，新戲舊戲以及你自己的戲，三齣好戲同時在眼前閃動，生命本如一場有趣的歷險，你當然看得過癮。

Book: Capitalism & Freedom

2006-05-31T12:02:00.000+08:00

**Posted on aNobii on May 11, 2006**

Honestly, I have no idea how I could earn an eonomics degree without ever having to read this book.

Friedman starts off with the most fundamental belief of a liberal - a belief "in the individual's freedom to make the most of his capacities and opporunties according to his own lights, subject only to the proviso that he not interfere with the freedom of other individuals to do the same."

As such, in judging social arrangements, the question to ask is, "Does it promote individual freedom?"

He goes on to argue that in order to have a free society, you need a free economy. Then he lays down fourteen activities undertaken by the government which could not be justified. They include:

Tariffs on imports and restrictions on exports
Minimum wage rates, maximum prices
Current public school system
The present social security systems
Licensure provisions
National parks

This is quite a big challenge he brings to himself. I mean, this guy is arguing against requiring doctors to get a license!

He proceeds to argue very convincingly for each of the item. Every chapter is a gem. The thinking is rigorous, its clarity stunning. And they are filled with humor and insights that are a joy to read by themselves (think "Freakonomics").

Liberals are anything but idealistic. Friedman's basic argument is this: look, you can try to get the government to do something about an issue, and with luck you may see some quick effects. But once the government gets its hands into this, they are never gonna get out. That's the REALITY. Like in every institution, government's natural tendency is to seek to grow and expand its influence. Once the government minds the business it should't mind, it's gonna bring in evil effects that are gradual, indirect, and unfortunately, will go unnoticed for a long while. So please be prudent in asking for government's intervention. In other words, let the government be the umpire. Unless it's absolutely necessary, don't ask him to join the play.

If you are a liberal, you can't be a good one without reading this. If you are somewhere else in the spectrum, this book will give you plenty food for thought.

Oh btw, in case you think this is something new, he wrote this book back in 1962.

My bookshelf at aNobii

The secret gem of PSP

2006-05-30T12:40:00.000+08:00

I bought a PSP yesterday so I could watch videos during my weekly commute to Guangzhou. I struggled for half an hour trying to get it to play the Google videos I downloaded. Turned out that I put the ".MP4" inside the file name while the extension ALREADY was MP4.

PSP's video playback quality is amazing. Much better than the alternatives I've looked at, including iPod video. And it's selling at half the price of most others. Yet Sony is not touting its strength as a video player at all. Why the reservation? Here's my guess.

First, why is it selling at a relatively low price? The video game business is a lot like the printer business. When HP sells you a printer, it doesn't earn much. After all, the printer is just a bait to get you to buy HP ink/toners for the next couple years, and that's where the real margin comes from. It's just another case of law of complements at work. The lower the price of a product (printer), the higher the demand for its complements (ink/toners). That's why you see laser printers selling at under $1000.

In the same manner, game console is just a bait to keep you buying games. How much are the console-makers willing to dole out to bait you? Microsoft, for one, is willing to lose US$150 per XBox! I couldn't find any data on how much Sony makes / loses for each PSP sold. But given its price tag, I suspect the margin is very low, if not negative.

I bought my PSP just for playing videos I acquire elsewhere. So chances are, Sony is losing money on people like me (and those who buy pirated games, of course) even if you count the 1G proprietary memory stick I bought. And that's probably why they are keeping PSP's amazing video quality low-key. But who knows? Maybe they'll exact revenge on me with an irresistable Winning Eleven XI.

Bye bye, gasoline?

2006-05-29T11:18:00.000+08:00

Which do you prefer?

Feed mid-east terrorism or mid-west farmers?
Import expensive gasoline or use cheaper ethanol?
Create farm jobs or mid-east oil tycoons?
Fossil fuels or green fuels?
ANWR oil rigs or "prairie grass" fields?
Gasoline cars or cars with fuel choices?

This is a slide from the presentation by Vinod Khosla, one of the founders of Sun Microsystems. His VC is backing the development of replacing gasoline with ethanol.

The case for ethanol is compelling. It's cheaper, it's cleaner, it reduces our dependence on mid-east, it helps the farmers and thus helps reduce the need for agricultural subsidy, which is a rather explosive issue, as every Hong Kong-er can tell you, and, requiring no technological breakthrough, it's cheap to get started. Simply put, there's something for everyone except oil companies that do not embrace it.

Best of all, it's been proven plausible. In Brazil, driven only by consumer demand with no government subsidy, the share of ethanol-friendly cars (called "Flex-fuel vehicles") in car sales rose from 4% to 70%. And Brazil is already enjoying all the benefits mentioned above. All in three-year time.

The presentation is available here. It's one of the talks hosted at Googleplex. You can download it for your PC, iPod or PSP.

The light is better over here

2006-05-28T23:22:00.000+08:00

A man is looking for his lost keys under the street lamp. His companion tells him that he's probably dropped them near his car. The man replies, "I know, but the light is better over here."

In a company I've worked for, management wanted to measure the contribution of each employee. They made us punch the time-card when we arrive for work and when we leave. They could then add up all the hours and see who logged the most.

The light is better over here.

In the equity market, data clearly show that the market behaves in nonlinear ways. The variables are not necessarily linked in a proportional manner, nor are outputs proportional to inputs. But we continue to apply linear models in predicting the market.

The light is better over here.

(The market example comes from A Mathematician Plays the Market)

(Image source)

(own) GOOOOAAAAAL!

2006-05-27T10:51:00.001+08:00

A short collection of fascinating own goals that will delight fans (except when it's your favorite team's defender who nails that unstoppable "match-winner") and non-fans alike. The video makes it look like own-goals are not as rare you'd think.

Warning: after a couple of those you may get confused as to how soccer is meant to be played and who's playing against whom. In that case, walk away from your computer, take a deep breath and relax your mind before you continue.

http://video.google.com/videoplay?docid=-5879759145636232499

Run Forrest, Run!

2006-05-25T19:13:00.000+08:00

It isn't exactly intuitive that a sports gears business and a music retail shop have anything to do with each other. But Nike and Apple - should I say iPod? - have made the connection look so natural you wonder why it's taken so long to materialize.

I don't see how any runners can resist the temptation. Heck, I am not a runner and I want to lay my hand on a set! This is a perfect showcase of what Nike does best - engaging ASPIRING athletes. And I suspect that every non-runner is an aspiring runner to varying degrees. So chances are, people like me will buy in the hope that it will turn them into runners. It probably won't. But that only makes the campaign all the more beautiful.

How about your own TV station?

2006-05-24T12:49:00.000+08:00

If the price of a product goes down, all other things being equal, the demand for its complements rises, and vice versa.

If the price of gas goes down, demand for cars goes up.

If the price of PCs goes down, demand for OS goes up. That's why Microsoft refused to sell an exclusive license to IBM. Redmond wanted the PC market commoditized.

If the price of enterprise software goes down, demand for enterprise software integration goes up. That's why IBM - the current consulting firm IBM, not the old PC IBM aforementioned - is embracing the open-source movement like it's its favorite child.

In a video project, you acquire the gears, produce the video, market it, and distribute it to whoever wants it.

The likes of Google and YouTube are driving the price of video distribution to zero. So what happens when video distribution, which has previously been dominated by a few dozens (think TV stations), is now open to everyone with an internet connection? To be more precise, who stand to gain the most?

You are likely to produce more videos or buy more services to produce videos for you. Which means you are also likely to buy more online ads (Google ads, maybe?) to promote your videos.

And I won't be surprised that Macs, perceived by many to possess this supposedly-native superiority in dealing with videos, will grab some more points in PC market share as a result.

(See Joel Spolsky's introduction to complements.)

Thou must paint thy bathroom door green ...

2006-05-24T10:24:00.000+08:00

You are living in an apartment building. Every resident is by default a member of the building's committee.

There's been an issue about how things should be decided around here. Some argue that the current simple majority rule should be replaced by dictatorship. Some say votes shall be casted in the form of money. Some argue that decisions should be made by the special 10% chosen by God through a lottery. Some propose setting up another committee to check against the power of the original committee. Some say that those in the minority of opinions should have a way to get things done the way they want. Some propose a democratic dictatorship with local characteristics, whatever that means.

Hold on, you say. What's the next issue the committee will decide on? The color of your bathroom door followed by how much you should save each month for the retirement of your dog.

Oh.

$1M in 6 weeks

2006-05-23T14:56:00.000+08:00

Next time you're short on cash, consider this scheme:

Get yourself some professional-looking stationaries. Send out 64,000 letters, half saying that in the coming week the S&P 500 will drop, half rise. 32,000 people will be quite impressed.

The next week, send letters to those 32,000 people, telling half of them that S&P will drop, the other half rise. 16,000 people will be more impressed (don't forget to mention your dead-on prediction from the previous week).

The week after, send letters to those 16,000 people in the same manner. 8,000 will be very impressed after the 3rd week, 4,000 will be super impressed after 4th, 2,000 will be chanting your name after 5th. After the 6th week, 1,000 will call you god.

Then you send a letter to those 1,000 telling them to pay you $1000 in order to continue getting such predictions / letters. If every one of them pay - which is not surprising given your newly-acquired deity status - you'll net a cool $1 million without knowing what P/E means.

Of course, you may serve time for that too.

(An idea from A Mathematician Plays the Market)

Take care, fans of socceroo!

2006-05-22T18:57:00.000+08:00

If you are drafted into your country's World Cup Finals team, you'd pay extra attention not to break your foot by dropping a bottle of aftershave (Canizares). Or damage your knee ligaments while reaching for TV remote (David Seaman). Or twist your shoulder while fishing (again, David Seaman).

Fans around the world shall be taking good care of themselves too. Especially the Aussies who've waited 32 years since their last Finals appearance and 12 years for their golden generation to crack it into the last thirty-two.

Hang in there mates!

Grue & Bleen

2006-05-21T23:02:00.000+08:00

Let's call an object "Grue" if it is green before Jan 1, 2010 and blue afterwards.

And let's call an object "Bleen" if it is blue before the same date and green afterwards.

Now, all emeralds examined up to now have been green. One may feel confident that all emeralds are green. But one should feel EQUALLY confident that all emeralds are "grue."

That doesn't sound right, you say. "Grue" is too weird a concept. But is it?

Consider an alien whose color system includes "grue" and "bleen". By the same token, the concept of "green" must be very weird. "Green", after all, is something that is grue before Jan 1, 2010 and bleen afterwards.

Hm ...

(A paradox by Nelson Goodman. Mentioned in A Mathematician Plays the Market)

(Image source)