| Subject: | [socialcredit] "Digital Rules Ten Laws Of The Modern World" (CITS Capital & Debt Watch) | | Date: | Wednesday, April 20, 2005 15:06:55 (-0400) | | From: | W. Curtiss Priest <bmslib @...edu>
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W. Curtiss Priest, Ph.D.
Center for Information, Technology & Society
466 Pleasant Street Melrose, MA 02176
E-mail: BMSLIB@MIT.EDU, Voice: 781-662-4044, FAX: 781-662-6882
April 20, 2005
Public Issue #:123
CITS Capital & Debt Watch
"Digital Rules Ten Laws Of The Modern World"
Commentary by Dr. W. Curtiss Priest, Director:
Fact: US Consumers consume more goods and services than
they can afford. One only need consult a growing number
of books from Juliet Shor (Overworked Americans) to
James Medoff (Indebted Society); and whether the debt is held
in credit cards, various loans, equity loans and refinancings,
is secondary. Further, the obligations and liabilities of
the US Federal Government greatly exceeds the amount of US
Federal debt (which in of itself is too large).
So, I have a political cartoonist soulmate, Toles, and hardly
a cartoon of his is off the mark -- but -- in particular,
see:
http://cybertrails.org/debtol45.gif
[provided under "fair use," "teachable moment," "archival,"
Section 107(a), 1976 Copyright Act and 1998 Digital Millennium Act]
[others, http://www.ucomics.com/tomtoles/]
[Note: this one cartoon I could not find at the above site]
Toles is regularly published in the Washington Post.
***
As all of us wish for "simple rules" about the economy, I
was pointed to an article in Forbes (below) via an "electronic
products" web site (EEMonthly@heh10.net).
I guess, even electronics-oriented folk care about the
rules that govern the economic universe.
As this site refers to various, common references such
as Moore's Law and the Laffer Curve, I find this synthesis
by Mr. Karlgaard to be informative and intriguing.
Perhaps Mr. Karlgaard's insights will lead to a more stable
economy.
Regards,
W. Curtiss Priest, Ph.D.
Editor, CITS Capital & Debt Watch
Director, Center for Information, Technology & Society
Research Affiliate, MIT, Comparative Media Studies
***
For prior issues of the CITS Capital & Debt Watch:
http://groups.google.com/groups?hl=en&lr=&ie=ISO-8859-1&scoring=d&q=%22cits+debt+watch%22+%22debt-financed%22
[please rejoin this address if it splits]
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Source:
http://www.forbes.com/business/2005/04/19/cz_rk_0419karlgaard.html?partner=rss
Digital Rules Ten Laws Of The Modern World Rich Karlgaard, 04.19.05,
10:00 AM ET
• Moore's Law. Listen to a billionaire explain why an understanding of
Moore's Law is a key to unlocking business riches. Don Valentine
founded Sequoia Capital in 1972 and presided over early investments in
Apple Computer, Electronic Arts, Cisco Systems, Yahoo! and Google. He
once told me the secret to his success: "That's easy. I just follow
Moore's Law and make a few guesses about its consequences." This April
marked the 40th anniversary of Gordon Moore's famous dictum. In 1965
Moore (he co-founded Intel three years later) noted that components on
silicon chips were doubling every year. In 1975 he amended that to
every two years. Today Moore's Law has transcended silicon chips. It
has become a way of saying that all digital stuff, from PCs to cell
phones to music players, get twice as good every 18 to 24 months--at
the same price point. Projecting from Moore's Law, venture capitalist
Valentine saw a future of personal computers, games, routers and
search engines. Now, go project!
• The Back Side of Moore's Law. This one says that digital stuff gets
30% to 40% cheaper every year--at the same performance point. The back
side of Moore's Law is why your $299 Treo 650 is as powerful as a
$3,500 Compaq PC was in 1988. It's why hundreds of millions of Chinese
and Indians now own their personal portals to the global economy.
• Andy and Bill's Law. The origin of this was a funny one-liner told
at computer conferences in the 1990s. It went like this: "What Andy
giveth, Bill taketh away." It meant that every time Andy Grove--then
chief executive of Intel (nasdaq: INTC - news - people )--brought a
new chip to market, Bill Gates--then CEO of Microsoft (nasdaq: MSFT -
news - people )--would upgrade his software and soak up the new chip's
power. But beyond the laugh, there's deep truth. Moore's Law
constantly enables new software. Often the new software is just an
incremental improvement. But every few years the world gets a wild
breakthrough--graphic computing in the 1980s, Web browsers in the
1990s, fast search engines today. Next? Surely something amazing.
• Metcalfe's Law. This one's named after Robert Metcalfe, the inventor
of the computer networking protocol Ethernet. Metcalfe said the
usefulness of a network improves by the square of the number of nodes
on the network. Translation: The Internet, like telephones, grows more
valuable as more join in. This is how eBay (nasdaq: EBAY - news -
people ) grew so profitable so fast.
• Gilder's Law: Winner's Waste. The futurist George Gilder wrote about
this a few years ago in a Forbes publication. The best business
models, he said, waste the era's cheapest resources in order to
conserve the era's most expensive resources. When steam became cheaper
than horses, the smartest businesses used steam and spared horses.
Today the cheapest resources are computer power and bandwidth. Both
are getting cheaper by the year (at the pace of Moore's Law). Google
(nasdaq: GOOG - news - people ) is a successful business because it
wastes computer power--it has some 120,000 servers powering its search
engine--while it conserves its dearest resource, people. Google has
fewer than 3,500 employees, yet it generates $5 billion in (current
run rate) sales.
• Ricardo's Law. The more transparent an economy becomes, the more
David Ricardo's 19th-century law of comparative advantage rules the
day. Then came the commercial Internet, the greatest window into
comparative advantage ever invented. Which means if your firm's
price-value proposition is lousy, too bad. The world knows.
• Wriston's Law. This is named after the late Walter Wriston, a giant
of banking and finance. In his 1992 book, The Twilight of Sovereignty,
Wriston predicted the rise of electronic networks and their chief
effect. He said capital (meaning both money and ideas), when freed to
travel at the speed of light, "will go where it is wanted, stay where
it is well-treated...." By applying Wriston's Law of capital and
talent flow, you can predict the fortunes of countries and companies.
• The Laffer Curve. In the 1970s the young economist Arthur Laffer
proposed a wild idea. Cut taxes at the margin, on income and capital,
and you'll get more tax revenue, not less. Laffer reasoned that lower
taxes would beckon risk capital out of hiding. Businesses and people
would become more productive. The pie would grow. Application of the
Laffer Curve is why the United States boomed in the 1980s and 1990s,
why India is rocking now and why eastern Europe will outperform
western Europe.
• Drucker's Law. Odd as it seems, you will achieve the greatest
results in business and career if you drop the word "achievement" from
your vocabulary. Replace it with "contribution," says the great
management guru Peter Drucker. Contribution puts the focus where it
should be--on your customers, employees and shareholders.
• Ogilvy's Law. David Ogilvy gets my vote as the greatest advertising
mind of the 20th century. The founder of Ogilvy & Mather--now part of
WPP (nasdaq: WPPGY - news - people )--left a rich legacy of ideas in
his books, my favorite being Ogilvy on Advertising. Ogilvy wrote that
whenever someone was appointed to head an office of O&M, he would give
the manager a Russian nesting doll. These dolls open in the middle to
reveal a smaller doll, which opens in the middle to reveal a yet
smaller doll...and so on. Inside the smallest doll would be a note
from Ogilvy. It read: "If each of us hires people who are smaller than
we are, we shall become a company of dwarfs. But if each of us hires
people who are bigger than we are, we shall become a company of
giants." Ogilvy knew in the 1950s that people make or break
businesses. It was true then; it's truer today.
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--
W. Curtiss Priest, Director, CITS
Research Affiliate, Comparative Media Studies, MIT
Center for Information, Technology & Society
466 Pleasant St., Melrose, MA 02176
781-662-4044 BMSLIB@MIT.EDU http://Cybertrails.org
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