Microsoft and children in the developing world

The makers of the $100 laptop designed to give thousands of kids from the developing world access to a vital learning tool have announced that the Microsoft Windows XP operating system will now be supplied with the laptop alongside the free (and in my experience, far superior) Linux operating system. Users will be able to choose which operating system they want to use just after they switch on the laptop. The cost of the laptop has risen to $188 because the company involved can't demand that a country order a minimum number of laptops. With Windows XP the cost of the laptop has risen by a further $10 to $198, double the initial cost which means half as many kids will get their laptop. The project has also suffered delays because it has taken 1 year to adapt Windows XP to go on the machine. Even so the user interface doesn't work on Windows XP and the networking software that lets users talk to one another and share data also doesn't work. Scandal and shame.

Why are they letting big business in to profit from such a beautiful and altruistic NOT-FOR-PROFIT scheme? Because the users want it. The number of orders placed since Windows XP was made available has increased. I wonder how much pressure was placed on the governments of the countries placing orders. Of course, we all know that MS aren't in this because of education. They want to make sure their operating system and their software becomes dominant in the new markets in the developing world. This situation is akin to the companies who distribute free powdered milk to mothers in the developing world and then stop the free samples when the mothers natural milk dries up, forcing them to pay for the milk. Microsoft will raise a generation of children on Windows and then when they are adults they will be forced to use it and pay for it (out of familiarity, the same reason Windows is till dominant everywhere else), instead of taking advantages of all the goodness of FREE open source software.

Sainsburys beware

The UK supermarket Sainsburys has reported a 28% increase in its profits this year. Now, I know they are one of the big nasty supermarket chains but I'm quite pleased about this. I was, for many years a Tesco customer partly out of laziness and partly because of the clubcard. But I got fed up of sub-standard fruit and veg and awful meat (see my post from almost a year ago). So I switched to Sainsburys. I travelled the extra few miles to their store and paid a few pence extra and got less of a reward for my loyalty (nectar points aren't as valuable as clubcard points). It was worth it for the better food. And I'm delighted and surprised that lots of other people have made the switch in a time when food prices have been rising fast. Sainsburys concentrate mainly on food but they have decided to reinvest the profits in the non-food side of the business. Boo. Concentrate on maintaining the quality of your food and you will maintain your profit margins (and your customers). Tesco took their eye off the ball and started selling crap food a year and a half ago so they could concentrate on their USA operations and their non-food lines and look what happened. I said it a year ago for Tesco and I'll repeat it again today; Sainsburys beware.

Defence Spending

The armed forces are woefully underfunded. The living conditions for some army families are a disgrace. So it makes people very angry when the government spends £33 million on asylum centres that were never built. That's right. It cost £33 million pounds for the government to even just think about building such centres, such as the one at Bicester. Think about how many army homes could have been rebuilt with £33 million. And think what we could do with the £20 billion that the Trident nuclear 'deterrent' will cost.

In other news Tesco has launched its US operations. The stores are called 'fresh and easy'. They chickened out on using 'Tesco' because if the venture fails they don't want to taint their name. What I find ironic is that their selling point is cheap fresh food for home cooking. Tesco UK are lousy for fresh food. In my experience their fruit, veg and meat is terrible quality.

Schools PFI

A programme to spend £45bn on rebuilding many schools took its first major step today. A new state of the art school has just opened in Bristol and it looks stunning. It came in on time and on budget. Other PFI initiatives across the public sector haven't worked so well. Like the classic case of the two hospitals in Coventry that needed refurbishing at a cost of £30 million pounds. To attract PFI money this plan was scrapped and a single new hospital was built at a final cost of £410 million pounds. The NHS trust is now in debt and owes the private sector partners loads of money. So Coventry swapped two hospitals for one that has less money and less beds and nurses and doctors for a total saving of -£380 million. By the same scale up of costs the schools rebuilding programme will cost £615bn, a debt that will have to be paid in future generations. Gordon Brown loves PFI because he doesn't have to raise taxes to get public service investment andhe passes the debt forward to a time when he won't be in power. Read Captive State by George Monbiot or talk to anyone who works for a privatised company or a joint venture or PFI initiative and share in the horror of what is to happen to our schools.

Orange gigs'n'tours

Orange have a new offer to their customers. You get to reserve concert tickets 48 hours before they go on sale. Sounds great from an Orange customer perspective but any band that is willing to treat fans like this isn't worth watching. The argument can be made that most live events are more accessible to those who pay more; corporate boxes in football and snooker etc. But this Orange thingy is pure queue jumping which is a very non-British thing to do. I don't know why I'm bothered; the acts that are in partnership with Orange aren't the type of acts I'd like to see anyway. Shed Seven anyone? Lily Allen (*shudders like Homer when thinking of Patty and Selma*)? Amy Winehouse ('I'm on drugs, aren't I kewl)? The Streets (geezer, music once OK, now reported lost somewhere in celeb land)?

Tesco Beware

Tesco is the giant of UK consumer retail. 1 in 8 pounds spent on the high street goes to Tesco. I have been a Tesco customer for many years now and I like the range of goods, the low prices, the clean bright stores and, most of all, the loyalty clubcard. However, I have noticed that things are starting to slip. The fresh food is, to put it plainly, awful. The quality of the fresh meat has dipped considerably and the fruit and vegetables are always low on stock and the only options seem to be multipacks whereas I want to pick my own. I now shop elsewhere and I'm prepared to pay more for the extra quality. I've heard grumbles from others too and Tesco should be careful. If all of their customers feel fed up and start to leave in droves it will be very hard to coax them back. Food is why people enter your supermarkets. Don't take your eye off the ball because it might be more than just this one loyal customer that you loose.

Fight the Power

My bank charged me £23 because one of my accounts accidently went a few pounds overdrawn even though there was more than enough money in my other account to cover it. I asked them to give me the £23 back, they said no. I then said I was going to go through the official complaints procedure to get my money back and that I would switch to their rival first thing tuesday morning after the bank holiday. They called me back and said that as a gesture of goodwill they would repay me the money.

The banks are in mess over charges they make. Interest charged on mortgages and loans is much higher than interest paid on savings and the banks make a killing (see my earlier post about banking and its profitability). The other way they make money is by overcharging people for going briefly overdrawn. The banks fold as soon as you show willingness to contest these charges officially. They don't want to go to court because a ruling against them would bring down their whole system of robbing money out of the cashflow situation of the poor working people of this country. So if they charge you unfairly complain and go through official complaints. I know loads of people who have won back money. Fight the power.

The Time Of The Locust

Venture capitalists have decided to go for high street brands. Boots the chemist is next.

The locusts have no king, yet go they forth all of them by bands.

Bible: Proverbs 30:27

University of York money gouging

I have just found out that my employer, the University of York, is to charge me £154 to park my car outside my place of work. Each member of staff is charged a percentage of their salary for this right and it must add up to a fortune in revenue, much more than the cost of maintaining the tarmac. The aim is to encourage people to use public transport to get to work. Sorry. Tried this for six months. I live 35 miles from York and my daily round trip by bus train and bus takes 3 hours and costs me £71 per week. Absolute misery and a severe reduction in my quality of life. My only option is to move to York but they don't pay me enough to be able to afford this and I'm not paying £150'000 for a terraced house without parking or central heating or double glazing. My current house is clean and warm and has space. And they know all this. Which is why they can profiteer by raking money from their staff. It's not our fault the Universities are all in debt.

British Telecom profit gouging and Trident

British Telecom owns much of the telephone and internet infrastructure of the UK. Once upon a time it had a monopoly but in recent years it has struggled to compete as first mobile phones and then the home internet phenomenon took off. In an effort to encourage customers to pay by direct debit the company has just announced that it will charge customers £4.50 to pay their bill in cash. I can see their point; it costs more to process cash transactions and automated payment will save them money. But come on. It is the right of everyone to restrict access to their bank details. A person should be allowed to use money if they wish. As long as bills are paid on time then BT should not add penalty costs. It amounts to profit gouging to save costs in every part of the business by a desperate company who are prepared to inconvenience their customers if it will save them money. But this is Britain today. No consumer protests will happen. There will be no boycott. People will not notice or care. Vivienne Westwood hit the nail on the head yesterday when she said that people were too busy with their lifestlye/consumer interests to care about the fact that the governement is about to spend £20 billion on a renewal of our cold war defence system. £20 billion to provide the armed forces with pointless busy work in the form of nuclear warheads to maintain.

Our era is one not of capitalism, but of rampant corporatism and consumerism, master and slave. The unavoidable end product is a company like Tesco. This faceless collective has grown by first offering the user the best alternative and then offering no alternative. The motto is 'everything, to everyone, everywhere'. How chilling. This cancerous market force has killed agriculture and millions of small and medium businesses. Poor quality, mass produced meat, fruit and vegetables have now replaced local produce and choice. Food shortages are common. Many times I have left without potatoes or bread or milk. There are often large queues at petrol pumps caused by the pulsing of shoppers and not by petrol supplies. Small town centres now contain just charity shops and building societies. My home village, once considered the 'queen of villages' now has a large polyp attached which has caused huge traffic problems, light pollution problems and has violated planning laws by expansion onto green land. This has happened everywhere, to everyone in every way. This is your prize for winning the cold war. Power over your life in fewer hands than ever before and with less accountability than at any stage. The Blue army has won.

Rover and Scientific Research

£270m of taxpayers money was used to prop up the ailing Rover car manufacturing company, which is now Chinese owned. As a result £68m given to the scientific research councils by the DTI will now be taken back to help balance the books. This means that thousands of research grants will be turned down and thousands of PhD and Postdoc projects across all scientific disciplines will never come into being. The worst hit research council is the Engineering and Physical Sciences Research Council (EPSRC) which loses £29m.

Science is the biggest thing in history. It has had a bigger impact than any king, politician, war, disease, political ideology or natural disaster. The changes in the world over the past 100 years have been science driven. Computers, TVs, mobile phones, space flight, electric lighting and much more have come directly from Physics. Hacking away at scientific research budgets in this country will cause it to fall behind. And it may prevent the spark of inspiration that will help find a cure for aids or cancer, develop the electric car or make clean nuclear fusion energy a realistic prospect.

Microsoft vs The Beatles

I have nothing against Microsoft (MS) as a software company. Windows works. It has flaws; over rigidity, security vulnerablities and instabilities but the typical PC user finds the interface with their hardware quick and easy. Linux does not offer the same level of support to its users. A Linux installation can take weeks to finalise. In the past I have been plagued by problems with such basics as getting my computer to play sound and obtaining drivers for my broadband modem.

I do object to the business practices of MS. The consumer did not choose Windows, because it is bundled with all new PCs. The situation is akin to that of a person baptised as an infant and raised as a Christian; all of this was decided for them without their consent. After decades of Windows ubiquity anyone who considers heresy must repel years of familiarity, habit and dogma.

A recent example is the smear campaign of The Beatles begun by MS. The Beatles back catalogue is to be made available online via software from Apple. Such a lucrative contract for the only significant commercial rival to MS has prompted them to lash out. Cue an article on the MS network website. It suggests that The Beatles are not above criticism and that there are deficits in some of their output and their personal behaviour. Fair enough. The article also suggests that The Beatles were not innovators and merely followed the tide. The Beatles have admitted that they borrowed mercilessly and there is no shame in this because 99.99% of all art works in this way. But The Beatles did innovate and lead the way at certain points. The article says that The Beatles were slow to emerge from psychedelia and that the song 'Get Back' marks their return to straight rock, hence the name. Wrong. The title of 'Get Back' reflected the desire of Paul to resume live performance. The real get back record was 'Lady Madonna' recorded in early 1968 before The Beatles went to India, a full year before 'Get Back'. The Beatles abandoned psychedelia at its peak and were one of the first mainstream groups to get back.

Factual innaccuracy renders any just criticism in the MS network article into a smear campaign penned by a lazy journalist with a hidden commercial agenda. Perhaps MS can explain on their mouthpiece website why MS Vista costs twice as much in Britain as in the US. Bill Gates gave a non answer the other day. The real reason is that the British consumer has been exploited by high prices for many years. The British economy is founded upon the idea that its own health is more important than that of the individual. This sort of ideology, in which the state is deemed more important than the individual is inherently totalitarian. Consumer debt is caused by excessive prices in all sectors. The banks then move in and pick the bones of the carcass by charging overdraft and credit card fees. Of course, the consumer has choice - no one forces the consumer to pay these prices. Yeah right. And billion dollar ad campaigns don't work in convincing people that they need this product and will fall behind and face social exclusion if they don't get it.

Oil company profits are not the problem

Shell has just announced a record profit of $25bn. The knee-jerk reaction to this is to gasp and ask how they dare rip us off. In fact, oil companies make very little money at the petrol pumps.

Cost of a barrel of oil (159 litres) - £ 42
Petol yield per barrell 51.4% - 82 litres
Net earning at the pump per barrel of oil - £ 74 *
Estimated profit for oil company - 1.5p per litre (£2.39 or $4 per barrel)

The price of petrol is mostly comprised of >50% tax charged by the government. The oil companies make most of their money in the speculative and dangerous business of extracting the oil from the ground.

So where do the oil companies spend their profits? A small percentage of the profit goes into shareholder dividends and bonuses for employees. Most of the money is invested back into infrastructure and finding new oil reserves.

The profit margins aren't all that big either. To work this out divide net income by total revenue. This will give an indicator of the fraction of earnings that are lost due to costs and taxes. The graph below shows how the profit margin of the energy industry compares with other businesses
Banking comes out top. Banks do provide a useful service but there is a dark side. How many people have been charged a fine because bills have been deducted from their bank account before their cheques have been paid in? If this does happen don't let them get away with it. In most cases the charges can be appealed quite easily. Go to your local citizens advice office. They are experienced in dealing with cases such as this and will help you draft letters that will get your money back. It works, trust me.

Anyway, the knee-jerk reaction to oil company profits should be avoided. Get onto the chancellor about the price of petrol. The real problem with the oil industry is in the environmental damage caused by its day-to-day procedures and by accidents and, of course, by the contribution to global warming. Oil companies do not pay for the oil they take from waters owned by the UK. They pay for a license to operate but what they extract they keep. It all amounts to subsidy. And I haven't mentioned the practices used by oil companies to destabilise oil rich regions. The behaviour of oil companies in countries such as Nigeria is a whole other can of worms which you can open here.