Net Neutrality is a term that has been appearing across the internet and in American Media, but what is it and how does it link to Economics.
What is Net Neutrality?
Net Neutrality means neutrality across the internet, which is the theory that each user on the internet should have equal access to websites and each website should have an equal chance.
In other words you pay for internet access but not for each website.
Why is it an issue at the moment?
Net neutrality has become an issue at the moment because some american internet provides are not following the ideals of net neutrality, they are changing more for some websites than when accessing others.
What is the importance of Net Neutrality?
Net Neutrality is vital, at present the internet is a 'free' while you must pay for access once on the internet each website has an equal footing with the next website. If firms start charging for access to websites there are huge social and economic consequences!
Socially it will mean that smaller websites will be weakened against larger websites, if their is free access to main stream media and it costs a lot more to access an independent website then instantly the free of speech on the internet becomes threatened. The advantage of the Internet now is that everyone has an equal say, you can go to any website and it will cost the same as accessing another, so you can choice where to get your news, information and entertainment. If firms break net neutrality then they can price out the competition.
Economically the fall of Net Neutrality is a disaster. What is glorious about the internet is is very few barriers to entry, which has greatly increased competition is most markets and in the internet industry itself lead to huge leaps of innovation and markets that are close to that of perfect competition (the blog market for example).
Also with the fall of net neutrality firms have an anti-competitive weapon to used to wipe out their competitors, as explained in the video bellow if internet providers can charge consumers for each website they access then they can offer some for free and charge huge amounts for others which will wipe them out.
Steve Wozniak co-founder of Apple is amount many trying to save net neutrality. It should be a social and economic priority for all peoples and nations!
Top American Youtube news reporter and Vlogger Phillip DeFranco explains the concept perfectly in this video:
Showing posts with label Markets. Show all posts
Showing posts with label Markets. Show all posts
Thursday, 23 December 2010
Tuesday, 21 December 2010
The new macro economic challage, supply side woes of getting things moving!!
Forget fiscal policy to get agreegate demand moving, it appears that this winter we are stuggling to get anything moving at all!
Its easy to over look the impact of weather in Economics but is a very important factor.
For a start weather gives out externalities, a rainy day could have negative externalities believe it or not! Perhaps the snow will make people happier and more productive.. though this is debated!
Where weather plays a key part though is the supply side of the economy. Shifts in weather conditions could damage crops or reduces solar power yeild lower agreegate supply. Famines can damage supply in market increasing prices and panic buying due to weather has drastic effects on sum markets.
This quick example shows the classical theory for what happens in the market for tinned beans short term in a panic buy. The supply is fixed short term as shown by being totally inelastic. The demand is also inelastic as demand will not be effectected by price rises. A jump to D1 leads to a drastic increase in price from P to P1.
This is exactly what plucky shop keepers can do in times of high demand. Although the large super markets like tesco and sainsbury's could be hindered by pricing policy, in this case it would be the small independent shops and francises (like Spar) that would benefit. Although classic theory tends not take into account customer loyalty that would be damaged for years to come for any shop keeper that abused his customers this way.
However the problem facing the UK at the moment is the effect of weather, in this case snow, on the mobility of the factors of production. Mobility of labour, land, capital and even enterprize is a very important supply side concept. To improve the supply side of the economy we can improve infrastructor like motorways to improve mobility of these factors.. so what happens when the economy is snowed to a stand still?
"The insurer RSA estimated that the freezing weather could cost the UK economy up to £1.2bn a day, with retailers and the restaurant and bar industries likely to be the worst affected." -Big freeze could cost UK economy more than £6bn - guardian.co.uk
For each person that does not get to work, each factory that's supplies are delayed and each school child that can't be educated the economy suffers.
Yet there is some good news, due to the internet things are not as bad as they could be. People are working from home and businesses can use webcams and phones to hold meetings, I know infact of a business now conducting a board meeting via skype.
Businesses are also offering their own solution, Miniture scifi model producer Games Workshop emailed its customers telling them while they can't promise Chirstmas orders they are offering online vouchers that can be given over the internet to solve Christmas gift woes. Ending their email with an appropreate image, I've shared with you bellow, to lift thier fans spirits.
Snow causes chaos but we just have to 'battle' through and hope the smiles a white Christmas will put on peoples faces will out weight the chaos, after all at the end of the day Economics is not really about money its or even dare i say it factors of production, but whats best for us all and thats happiness.
Its easy to over look the impact of weather in Economics but is a very important factor.
For a start weather gives out externalities, a rainy day could have negative externalities believe it or not! Perhaps the snow will make people happier and more productive.. though this is debated!
Where weather plays a key part though is the supply side of the economy. Shifts in weather conditions could damage crops or reduces solar power yeild lower agreegate supply. Famines can damage supply in market increasing prices and panic buying due to weather has drastic effects on sum markets.
This quick example shows the classical theory for what happens in the market for tinned beans short term in a panic buy. The supply is fixed short term as shown by being totally inelastic. The demand is also inelastic as demand will not be effectected by price rises. A jump to D1 leads to a drastic increase in price from P to P1.
This is exactly what plucky shop keepers can do in times of high demand. Although the large super markets like tesco and sainsbury's could be hindered by pricing policy, in this case it would be the small independent shops and francises (like Spar) that would benefit. Although classic theory tends not take into account customer loyalty that would be damaged for years to come for any shop keeper that abused his customers this way.
However the problem facing the UK at the moment is the effect of weather, in this case snow, on the mobility of the factors of production. Mobility of labour, land, capital and even enterprize is a very important supply side concept. To improve the supply side of the economy we can improve infrastructor like motorways to improve mobility of these factors.. so what happens when the economy is snowed to a stand still?
"The insurer RSA estimated that the freezing weather could cost the UK economy up to £1.2bn a day, with retailers and the restaurant and bar industries likely to be the worst affected." -Big freeze could cost UK economy more than £6bn - guardian.co.uk
For each person that does not get to work, each factory that's supplies are delayed and each school child that can't be educated the economy suffers.
Yet there is some good news, due to the internet things are not as bad as they could be. People are working from home and businesses can use webcams and phones to hold meetings, I know infact of a business now conducting a board meeting via skype.
Businesses are also offering their own solution, Miniture scifi model producer Games Workshop emailed its customers telling them while they can't promise Chirstmas orders they are offering online vouchers that can be given over the internet to solve Christmas gift woes. Ending their email with an appropreate image, I've shared with you bellow, to lift thier fans spirits.
Snow causes chaos but we just have to 'battle' through and hope the smiles a white Christmas will put on peoples faces will out weight the chaos, after all at the end of the day Economics is not really about money its or even dare i say it factors of production, but whats best for us all and thats happiness.
Saturday, 4 December 2010
Tuition fee increase: Political not economic.
Many would have use think that the Tuition fee increase is way of raising finance for the Government, that in these tough times we all must pay. Nick Clegg said his reasons for flip flopping on his promise to the NUS about not increasing them was because after he saw the 'true extent of the debt' he changed his mind. However after a bit of reading around, I've come to the conclusion that in fact it is no an economic move at all.. it is a political move based upon ideology.
The Government wants to reduce exspenditor, so it will cut University funding and increase tuition fees. As a one off this will cut the expenditior for that department as now less funding will go out to Universities. Yet this will cancel out becuase the Government will have to give out more loans. This is not a short term stragegy because it will take some time for these loans to be paid back, the Government will start seeing the return after this term in office. Not to mension the huge costs of setting up the new system!
Its claimed that the increase in tution fees will not have an effect on people going to university, that students will not be put off by high debts and the new system is fairer. This is not true at all, just from first hand experience I can say that many students are being put off from going to university and it can be seen but the civil up roar displited by the students all across the country that it is very much not regarded as fairer.
Increasing the skills and education that works have is a good way of developing the economy. It is a core supply side policy. If we deter people from going to collage then growth will suffer in the economy. On average those with a degree earn 35% more than the national average. This means that if less people go to university the Government will collect less taxes! No only this but the cut to university funding will mean Universites will have to scale down their research, this again will put Briton behind.
So what is too gain from this? Freeing tution fees is on more step to privatising it, the Conservitive party believe in the free markets. The best universities will be able to offer higher charges so will have a higher income. This means the top Universities will have more money to spend but what about those that can't charge so much?
Could we be faced with Universities disappearing? Those that don't perform may be wiped out. This could just be the begining of policy. The Government will keep pushing up tutuin fees and liberating Universites until it becomes a business. Those that don't attract will fail. Is this really what we want?
There are serious implicaitons to slowing increasing tution fees, re-making university for the elite could be a danger. The question is, is this in the Converitives interest? Some might say so.
If fees are pushed up but the Government whats to still make it viable for everyone to go to University then they will have to increase grant, those maybe this is not a consern for the present Government.
We have established that higher tuition fees will put people off university but perhaps this is the point. Some people believe that their are too many University course and many are useless. Could this be the motive, to put those off that will not benefit themselves or society by going to University?
Really what have the Tories got to loose from upsetting students, they are not a key group of supports of the Conservative party! Those that are, are unlikely to change their view based upon this. The only ones loosing out are the Lib Dems and the students ofcourse.
Yet we must remember for all of this speculation of Conservative gain it was Labour that brought in tuition fees in the first place...
The Government wants to reduce exspenditor, so it will cut University funding and increase tuition fees. As a one off this will cut the expenditior for that department as now less funding will go out to Universities. Yet this will cancel out becuase the Government will have to give out more loans. This is not a short term stragegy because it will take some time for these loans to be paid back, the Government will start seeing the return after this term in office. Not to mension the huge costs of setting up the new system!
Its claimed that the increase in tution fees will not have an effect on people going to university, that students will not be put off by high debts and the new system is fairer. This is not true at all, just from first hand experience I can say that many students are being put off from going to university and it can be seen but the civil up roar displited by the students all across the country that it is very much not regarded as fairer.
Increasing the skills and education that works have is a good way of developing the economy. It is a core supply side policy. If we deter people from going to collage then growth will suffer in the economy. On average those with a degree earn 35% more than the national average. This means that if less people go to university the Government will collect less taxes! No only this but the cut to university funding will mean Universites will have to scale down their research, this again will put Briton behind.
So what is too gain from this? Freeing tution fees is on more step to privatising it, the Conservitive party believe in the free markets. The best universities will be able to offer higher charges so will have a higher income. This means the top Universities will have more money to spend but what about those that can't charge so much?
Could we be faced with Universities disappearing? Those that don't perform may be wiped out. This could just be the begining of policy. The Government will keep pushing up tutuin fees and liberating Universites until it becomes a business. Those that don't attract will fail. Is this really what we want?
There are serious implicaitons to slowing increasing tution fees, re-making university for the elite could be a danger. The question is, is this in the Converitives interest? Some might say so.
If fees are pushed up but the Government whats to still make it viable for everyone to go to University then they will have to increase grant, those maybe this is not a consern for the present Government.
We have established that higher tuition fees will put people off university but perhaps this is the point. Some people believe that their are too many University course and many are useless. Could this be the motive, to put those off that will not benefit themselves or society by going to University?
Really what have the Tories got to loose from upsetting students, they are not a key group of supports of the Conservative party! Those that are, are unlikely to change their view based upon this. The only ones loosing out are the Lib Dems and the students ofcourse.
Yet we must remember for all of this speculation of Conservative gain it was Labour that brought in tuition fees in the first place...
Sunday, 7 November 2010
Microsoft VS Opensource
There is a fascinating economic war going on, that mainly people don't know about it!
In the beginning
In simple terms: Back in the early days of the personal computer several giants rose up to fight for the throne, mainly Apple and Microsoft. Both created operating systems to run on PCs (or Macs in Apples case) but these systems needed applications and programs to run on them. So many other firms set up to provide programs, for example: Netscape sold an internet browser for windows. However Microsoft (and Apple) did not want this, they wanted monopoly power! So they played a number of anti-competitive tricks to remove the competition, these included the infamous buy outs. Also a trick played by Microsoft was to offer equivalent software for free, thus totally wiping out the competition. So when Microsoft released its next operating system, it released it with Internet Explorer, for free included! Netscape was wiped out.. Over time the giants gained more and more control over every aspect of the market but then something happened there was rebellion!
The open revolt:
Around the early 2000s something appeared to nibble at Microsoft's and the other computer giants power it was called open source. Not a new concept open source is a philosophy, the idea is that computer code is left open, visible and editable for anyone to improve. How does it effect Microsoft? Well, open source programers began building programs and together over the internet improving them until with such a range of skills and backing they launched them to compete with Microsoft. How to compete? well they beat Microsoft at their own game! They offered it for free. They created Firefox that cut apart internet explorers market share and more importantly they created and give away for free Open Office. When Microsoft's latest version of office costs around £90, open office is near enough identical for £0 and it has rattled the USA computer giant.
The Empire Strikes back
Times seemed good, as an economist and fan of good free ideas, open source was fascinating and some what of a blessing. However one should never under estimate Microsoft! For they have now begun a damning campain to whipe out opensource!
The video above is a brutal assault on open office, while the points raised have some weight it is again an example of advertising power damaging an attempt to revive the free market. If open source is so bad then no one would buy it, the free market would take its course and people would pay Microsoft the full price. Clearly consumers value Microsoft's products cheaper than they are selling them or they would still chose to buy the official Microsoft office which is better, but its monopoly power keeping the price up not good value.
The video makes my stomach churn! Oh yes it is genius but dark. It portrays open source as evil, the feel of the advert looks more like an anti drug campaign or worse! All I can say is Microsoft has sunk to a new low, and after my opinions of them was improving.
Try open office for yourself: OpenOffice
Looking to get your own free open source software try: sourceforce
Thanks to: http://www.zath.co.uk/author/john-thompson/ - check him out for great tech news/reviews
In the beginning
In simple terms: Back in the early days of the personal computer several giants rose up to fight for the throne, mainly Apple and Microsoft. Both created operating systems to run on PCs (or Macs in Apples case) but these systems needed applications and programs to run on them. So many other firms set up to provide programs, for example: Netscape sold an internet browser for windows. However Microsoft (and Apple) did not want this, they wanted monopoly power! So they played a number of anti-competitive tricks to remove the competition, these included the infamous buy outs. Also a trick played by Microsoft was to offer equivalent software for free, thus totally wiping out the competition. So when Microsoft released its next operating system, it released it with Internet Explorer, for free included! Netscape was wiped out.. Over time the giants gained more and more control over every aspect of the market but then something happened there was rebellion!
The open revolt:
Around the early 2000s something appeared to nibble at Microsoft's and the other computer giants power it was called open source. Not a new concept open source is a philosophy, the idea is that computer code is left open, visible and editable for anyone to improve. How does it effect Microsoft? Well, open source programers began building programs and together over the internet improving them until with such a range of skills and backing they launched them to compete with Microsoft. How to compete? well they beat Microsoft at their own game! They offered it for free. They created Firefox that cut apart internet explorers market share and more importantly they created and give away for free Open Office. When Microsoft's latest version of office costs around £90, open office is near enough identical for £0 and it has rattled the USA computer giant.
The Empire Strikes back
Times seemed good, as an economist and fan of good free ideas, open source was fascinating and some what of a blessing. However one should never under estimate Microsoft! For they have now begun a damning campain to whipe out opensource!
The video above is a brutal assault on open office, while the points raised have some weight it is again an example of advertising power damaging an attempt to revive the free market. If open source is so bad then no one would buy it, the free market would take its course and people would pay Microsoft the full price. Clearly consumers value Microsoft's products cheaper than they are selling them or they would still chose to buy the official Microsoft office which is better, but its monopoly power keeping the price up not good value.
The video makes my stomach churn! Oh yes it is genius but dark. It portrays open source as evil, the feel of the advert looks more like an anti drug campaign or worse! All I can say is Microsoft has sunk to a new low, and after my opinions of them was improving.
Try open office for yourself: OpenOffice
Looking to get your own free open source software try: sourceforce
Thanks to: http://www.zath.co.uk/author/john-thompson/ - check him out for great tech news/reviews
Monday, 12 July 2010
Zoo-opoly
i took a visit with my psychology class to a certain zoo. The basis of this was to look into animal behaviour... how ever when we stopped for lunch my mind tuned to an interesting example of Micro economics.
For my lunch I had a chicken burger with chips and a medium soft drink, this was at a frankly extortionate price of £5.50! High price.. good quality? NO it was perhaps the worse meal i have had in months.
McDonald's:
£3.59 - larger, better quality ingredient, better packaging, better taste,
Zoo Restaurant:
£5.50 - Small, droopy, cold, side order of stomach pain
First thought: MARKET FAILURE
This was clearly an example of a monopoly, once you enter the zoo you are in a world with no free market. The shops, the restaurants and everything else is a total monopoly. This is no competition, supply is restricted and demand is high. I settled on disgruntled on this analysis for some time then i had a second thought..
Second though: Positive Externalites?
Upon further contemplation i considered a new route of analysis.. your not paying for the burger, your paying for the animals. Perhaps there is a positive externality in comsumption of the dodgy burger, by consuming the burger you are giving money to the zoo which pay for the animals. The more burgers bought the more animals the zoo can afford. Its of course not a positive externalitiy in a orthodox sense because lowering the price to increase demand will remove the effect, but there are positives of consumption.
So the question is which is it? what do u think?
Also where were the kangaroos...........?
For my lunch I had a chicken burger with chips and a medium soft drink, this was at a frankly extortionate price of £5.50! High price.. good quality? NO it was perhaps the worse meal i have had in months.
McDonald's:
£3.59 - larger, better quality ingredient, better packaging, better taste,
Zoo Restaurant:
£5.50 - Small, droopy, cold, side order of stomach pain
First thought: MARKET FAILURE
This was clearly an example of a monopoly, once you enter the zoo you are in a world with no free market. The shops, the restaurants and everything else is a total monopoly. This is no competition, supply is restricted and demand is high. I settled on disgruntled on this analysis for some time then i had a second thought..
Second though: Positive Externalites?
Upon further contemplation i considered a new route of analysis.. your not paying for the burger, your paying for the animals. Perhaps there is a positive externality in comsumption of the dodgy burger, by consuming the burger you are giving money to the zoo which pay for the animals. The more burgers bought the more animals the zoo can afford. Its of course not a positive externalitiy in a orthodox sense because lowering the price to increase demand will remove the effect, but there are positives of consumption.
So the question is which is it? what do u think?
Also where were the kangaroos...........?
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