Take SOPA, the “Stop Online Piracy Act,” a bill introduced in the United States House of Representatives last October (and its counterpart bill in the US Senate, called “Protect IP Act”, PIPA.) They are supposed to protect intellectual property. But opponents to the bills argue that it will have a chilling effect on free speech, that it violates the First Amendment of the US constitution (which guarantees freedom of expression to US citizens and is the first of the Bill of Rights), and that it amounts to internet censorship.

To protest SOPA and PIPA (remember that they are bills and are not yet enacted into law), prominent groups and companies are planning on taking action. Google will have something on their main page; Wikipedia will be off-line for 24 hours on Jan 18th; reddit is going down for 12 hours to protest SOPA and PIPA. That all is going on in the US. What’s going on in India?

India is an interesting case. Like that of the US, the government of India depends on a compliant citizenry: people who do as they are told, and to shut up when they are told to STFU. Of course, this is not all that difficult since a majority of Indians have been brainwashed into the belief that the government is a benevolent agency — mai baap — which hands out goodies to favored groups and therefore has to be obeyed. The trouble is (from the government’s point of view) that some people are not very cooperative and insist on exposing the government’s lies. This simply would not do. These people write stuff and say things that could be damaging to the government’s case.

The government has a two-pronged approach to this problem. First, do something about the “demand side.” If people cannot read and write, they are unlikely to be exposed to the truth. The way is therefore to control the education sector and make it dysfunctional enough that even after more than 60 years post independence, about half a billion Indians are illiterate. Destroying the future of the people just to keep them in the dark is one of the greatest crimes that the governments of India have committed against India. The Congress party has directly and indirectly held the reins of government for around 50 years, and mass illiteracy is one of their enduring legacies.

The Indian government has censored news reports, banned books and movies, and made it illegal for people to discuss current affairs on radio. That’s what I call the “supply side” of the matter: make sure that the supply of information is limited to what the government likes. But then came the new threat: the internet and with it access to the world wide web of information.

As long as the internet was just text based, the government was not too worried. What scared them into action was that the internet became multi-media. Not just text, you could watch videos and listen to a variety of opinions, and you did not have to be literate to do so. That, as you can imagine, put a spanner in the carefully designed works of the government to keep the people uninformed through illiteracy.

So here we are. The country is being run by a bunch of crooks, headed nominally by the most despicably dishonest man, the appointed prime minister, Dr Manmohan Singh. His master is an Italian woman who rules her minions with an iron hand. Among her hand maidens is one Kapil Sibal, a man who is roundly despised and is perhaps a cretin. Sibal is in charge of internet censorship. He regularly tells internet firms to censor content that will damage the carefully built images of his master and her family.

The Center for Internet & Society has an informative article, “Invisible Censorship: How the Government Censors Without Being Seen” by Pranesh Prakash (dateline Dec 15, 2011.) Here’s an extended excerpt:

Government Has Powers to Censor and Already Censors

Currently, the government can either block content by using section 69A of the Information Technology Act (which can be revealed using RTI), or it has to send requests to the Internet companies to get content removed. Google has released statistics of government request for content removal as part of its Transparency Report. While Mr. Sibal uses the examples of communally sensitive material as a reason to force censorship of the Internet, out of the 358 items requested to be removed from January 2011 to June 2011 from Google service by the Indian government (including state governments), only 8 were for hate speech and only 1 was for national security. Instead, 255 items (71 per cent of all requests) were asked to be removed for ‘government criticism’. Google, despite the government in India not having the powers to ban government criticism due to the Constitution, complied in 51 per cent of all requests. That means they removed many instances of government criticism as well.

‘Self-Regulation’: Undetectable Censorship

Mr. Sibal’s more recent efforts at forcing major Internet companies such as Indiatimes, Facebook, Google, Yahoo, and Microsoft, to ’self-regulate’ reveals a desire to gain ever greater powers to bypass the IT Act when censoring Internet content that is ‘objectionable’ (to the government). Mr. Sibal also wants to avoid embarrassing statistics such as that revealed by Google’s Transparency Report. He wants Internet companies to ’self-regulate’ user-uploaded content, so that the government would never have to send these requests for removal in the first place, nor block sites officially using the IT Act. If the government was indeed sincere about its motives, it would not be talking about ‘transparency’ and ‘dialogue’ only after it was exposed in the press that the Department of Information Technology was holding secret talks with Internet companies. Given the clandestine manner in which it sought to bring about these new censorship measures, the motives of the government are suspect. Yet, both Mr. Sibal and Mr. Sachin Pilot have been insisting that the government has no plans of Internet censorship, and Mr. Pilot has made that statement officially in the Lok Sabha. This, thus seems to be an instance of censoring without censorship.

Backdoor Censorship through Copyright Act

Further, since the government cannot bring about censorship laws in a straightforward manner, they are trying to do so surreptitiously, through the back door. Mr. Sibal’s latest proposed amendment to the Copyright Act, which is before the Rajya Sabha right now, has a provision called section 52(1)(c) by which anyone can send a notice complaining about infringement of his copyright. The Internet company will have to remove the content immediately without question, even if the notice is false or malicious. The sender of false or malicious notices is not penalized. But the Internet company will be penalized if it doesn’t remove the content that has been complained about. The complaint need not even be shown to be true before the content is removed. Indeed, anyone can complain about any content, without even having to show that they own the rights to that content. The government seems to be keen to have the power to remove content from the Internet without following any ‘due process’ or fair procedure. Indeed, it not only wants to give itself this power, but it is keen on giving all individuals this power.

So what are we going to do about it? We, if we care, should make sure that Manmohan Singh and his cohorts like Kapil Sibal, and their master the Italian Antonia Maino aka Sonia Gandhi, and her puppy are stopped from destroying the nation. Let’s vote them out.

“There is no more dangerous mistake than the mistake of supposing that we cannot have too much of a good thing.” Thus spake George Bernard Shaw. Excess is as damaging as shortage in most things that are considered good. More is better but only up to a point of satiation. Beyond the satiation point, the marginal utility of a good is negative, as an economist may put it. Particular instances of that generalization are not hard to find.

Food, for instance, is a good that in excessive quantities is a bad as the success of the dieting industry so starkly demonstrates. Yet tens of millions poor people around the world dying of malnutrition and starvation every year is the horrible demonstration of the problem at the other extreme.

The same holds for information.

What brings all this to mind is the so-called information revolution occurring globally. Information is a good which is also subject to the law of negative marginal utility beyond the satiation point. Information overload can be as debilitating as too little. For much of the world now the problem is no longer a shortage of information but rather a surfeit.

All living beings acquire information from their surroundings for survival. Information needs vary depending on the nature of the being and the sense-organs have co-evolved to perform the required function. The more complex the entity, the more sophisticated the sense organs are. The sophistication has two dimensions: the bandwidth and the filter.

Higher bandwidth means that more information per unit of time is sensed by the entity. But the information gathered is filtered severely for relevance and only a small percentage is passed on to the processing unit (the brain) for internalization and for response. Therefore the filtering mechanism had to evolve in step with the evolution of high bandwidth sense organs.

Here is my conjecture. Higher intelligence is marked by possessing very high bandwidth sense organs (channel capacity), and a very sophisticated filtering system which rejects most of the inputs and processes only a very small portion of the total information received

We humans sense the world around us mainly through our eyes and ears. Most of the megabits per second of information we receive is rejected and only a minute fraction is processed by our brains. The filtering mechanisms developed over our evolutionary history and did so gradually. Even the brain has an inbuilt capacity to forget. There are a few who suffer from a pathological condition which does not allow them to forget anything that they have ever seen or heard.

Now we are faced with a world where information is being generated and accumulated at an exponentially increasing rate and we face the possibility of information overload that could overwhelm our capacity to filter and meaningfully process it.
. . .
I conjecture that the age of information dieting industry is upon us. The day is not far off when you would have to go on an information diet.

In a follow up post, I addressed the issue of sorting and searching the large stock of public information and claimed that “in post-industrial world and increasingly so in the future, sorting and searching through information will occupy the role that manufacturing did in the growth of the old economy.”

Sorting and searching through information are uniquely human activities because only humans have an external store of information which needs to be accessed and acted upon. The notion of acting on information stored externally is not associated with non-human animals.

The larger the stock of information, the more expensive it is to search through it to locate the precise bit that is relevant at any particular instance. To make the task of searching more tractable, ordering the information in some fashion—called sorting—becomes paramount. Computer scientists have worked on the problem of sorting and searching for decades with phenomenally successful advancement in our understanding in this regard.
. . .
When the quantity supplied of any good is in excess of anything reasonably required or demanded, the variable of importance is quality. Basically a person’s information needs are really very simple. One can only read so much, listen to so much talk and music, watch so much video, and wish to know only so much about what is going on around in one’s neighborhood and in the world at large.
. . .
The bottom line is this: there is already so much information out there that even if no additional information were generated, each one of us could be occupied a little longer than forever to finish it. Information, as we well know, is a non-rival good. That is, my “consuming” a particular piece of information will not diminish the amount available to you. Compare this to a rival good such as food. Stock of food is enough to last the six billion humans for about 3 months. In other words, if we produce no additional food, all together humans would finish the stock in three months. Or, a single human can therefore finish this in 1.5 billion years. But it is not so in the case of information. Each of us would take the estimated 18 billion years to finish the information we already have before we ask for more.

Clearly, for an average human, about 0.00000000001 percent of the total information stock is more than enough. About 99.9999999999 percent of the available information is worthless. So how does one go about searching out the teaspoonful of useful information from the oceans of available information. That is the challenge and therein lie the opportunities. That is why firms like Google will make the big bucks. The opportunity is not so much in making information available but making the right information available.

Which brings me to the point which I started off with. Searching is only part of the story when it comes to information. The other part is sorting. If one can sort the information along some relevant dimension, then you have meaningful information. What is meaningful can only be defined in the context of the entity processing the information. From the same stock and flow of information, different entities define different subsets that are relevant and meaningful. This subset can be labeled private information as opposed to the vast store of public information. Private information is the top of the sorted list of public information. Internalizing the private information leads to what we can call a stock of knowledge associated with the individual.

It is useful at this point to remind ourselves of the distinction between information and knowledge. Information is a public good the stock of which is growing exponentially. Knowledge is a private good and its primary raw material is the private information which is a very vanishingly small subset of the available public information. Even though public information has no known bounds, there are limits to how much private information can processed by a human brain and thus there are limits to the acquisition of the private good we call knowledge.

Conflating knowledge and information is distressingly too common these days and so I would like to dwell on this distinction for a bit. Some say that today we have a knowledge economy. It is trivially true because it has always been a knowledge economy ever since humans evolved brains capable of processing information into knowledge and began using knowledge to organize and coordinate economic activities. What is novel is the unfathomably huge stock of information we have available today. What distinguishes one individual from another today is the capacity to figure out what is relevant information and to internalize it efficiently into knowledge. That capacity is one of the basic skills imparted by what we call education.

To summarize the story so far: from the vantage point of an individual, this is an age of superfluous information; only a tiny fraction is relevant and meaningful; searching through the information can be automated but efficiently sorting for relevance is a private skill; imparting that skill is a primary function of education.

And now a bit from the Economist article linked above.

[Researchers of the dense data fog] raise three big worries. First, information overload can make people feel anxious and powerless: scientists have discovered that multitaskers produce more stress hormones. Second, overload can reduce creativity. Teresa Amabile of Harvard Business School has spent more than a decade studying the work habits of 238 people, collecting a total of 12,000 diary entries between them. She finds that focus and creativity are connected. People are more likely to be creative if they are allowed to focus on something for some time without interruptions. If constantly interrupted or forced to attend meetings, they are less likely to be creative. Third, overload can also make workers less productive. David Meyer, of the University of Michigan, has shown that people who complete certain tasks in parallel take much longer and make many more errors than people who complete the same tasks in sequence.

Curbing the cacophony

What can be done about information overload? One answer is technological: rely on the people who created the fog to invent filters that will clean it up. Xerox promises to restore “information sanity” by developing better filtering and managing devices. Google is trying to improve its online searches by taking into account more personal information. (Some people fret that this will breach their privacy, but it will probably deliver quicker, more accurate searches.) A popular computer program called “Freedom” disconnects you from the web at preset times.

OK, I have added to your information overload. Sorry.

[I even have a category called "Information Overload." How cool is that!]

Despite the instinctive appeal of distributing laptops to schoolchildren, there is precious little evidence that making computers available to children improves educational outcomes. The circumstantial evidence that exists certainly doesn’t buttress the one-laptop-per-child approach.
. . .
Two other recent studies conducted in the developing world are even more telling. Economists Ofer Malamud and Cristian Pop-Eleches studied a program in Romania that distributed discount vouchers for the purchase of home computers to low-income families. When they compared the families that used the vouchers to acquire computers with families that were just above the income cut-off to receive the vouchers, they found that computers had a negative effect on students’ grades and educational goals. Leigh Linden, an economist at Columbia University, and Felipe Barrera-Osorio of The World Bank studied a program in Colombia that increased the number of computers in schools and provided curriculum support and training for teachers — and found no impact on student outcomes. “In this case, despite the curriculum support, it was clear that the teachers simply weren’t using the computers,” Linden says.

Linden also led one of the few experimental studies to show a positive impact from the use of computers — a project in India that provided computers and education software to schools and randomly assigned some schools to use the software during school hours and others to encourage computer use after hours. This study found that using computers during school hours —essentially substituting computers for teachers — actually hurt learning, while using them after hours as a supplement to traditional classroom teaching had dramatic positive effects on the weakest students. Even this outcome doesn’t really support the OLPC mission, though; the software evaluated is very much in the “drill and practice” model that Negroponte has explicitly derided.

Ogden further on in the article mentions a few more effective means of improving educational outcomes.

There are a number of simple, cheap programs that have been proven successful at getting children in developing countries into school and helping them learn more while they are there.

The simplest and least costly of these programs is deworming. Nearly 2 billion people around the world are affected by parasitic worm infections, with children disproportionately affected. While each variety of parasitic worm affects a person differently, they all take a substantial toll on growth, energy and attention, with entirely predictable impacts on school attendance and learning. Harvard economist Michael Kremer has studied the impact of mass deworming in Kenya and India. Delivering deworming medication costs 50 cents per child per year in Kenya but yielded a 25 percent increase in school attendance; a similar program in India cost $4 per student per year and yielded a 20 percent attendance gain. “This is a simple, cost-effective and yet tragically not-done program. It’s a scandal that [deworming] hasn’t been addressed,” Kremer says. There are spillover effects as well. “The most surprising thing about the study in Kenya was the widespread impact,” Kremer says. The program drove down infection rates for several kilometers around the schools, he says, and there were significant improvements in attendance for untreated students, in the treatment schools as well as in nearby schools not in the program.

Go read it all.

Related Posts: Aside from the posts in the category OLPC, you may wish to see –

The OLPC is Inappropriate for India. (May 2009)

Formula for Milking the Digital Divide. (Nov 2005)

Imagine, in 1996, asking some net-savvy soul to expound on the potential of craigslist, then a year old and not yet incorporated. The answer you’d almost certainly have gotten would be extrapolation: “Mailing lists can be powerful tools”, “Social effects are intertwining with digital networks”, blah blah blah. What no one would have told you, could have told you, was what actually happened: craiglist became a critical piece of infrastructure. Not the idea of craigslist, or the business model, or even the software driving it. Craigslist itself spread to cover hundreds of cities and has become a part of public consciousness about what is now possible. Experiments are only revealed in retrospect to be turning points.

In craigslist’s gradual shift from ‘interesting if minor’ to ‘essential and transformative’, there is one possible answer to the question “If the old model is broken, what will work in its place?” The answer is: Nothing will work, but everything might. Now is the time for experiments, lots and lots of experiments, each of which will seem as minor at launch as craigslist did, as Wikipedia did, as octavo volumes did.

It’s a long piece on newspapers, and the challenges they face from the change brought about by the information technology revolution. The story is instructive and the lessons apply to domains other than news. Here’s a bit more:

The curious thing about the various plans hatched in the ’90s is that they were, at base, all the same plan: “Here’s how we’re going to preserve the old forms of organization in a world of cheap perfect copies!” The details differed, but the core assumption behind all imagined outcomes (save the unthinkable one) was that the organizational form of the newspaper, as a general-purpose vehicle for publishing a variety of news and opinion, was basically sound, and only needed a digital facelift. As a result, the conversation has degenerated into the enthusiastic grasping at straws, pursued by skeptical responses.

“The Wall Street Journal has a paywall, so we can too!” (Financial information is one of the few kinds of information whose recipients don’t want to share.) “Micropayments work for iTunes, so they will work for us!” (Micropayments work only where the provider can avoid competitive business models.) “The New York Times should charge for content!” (They’ve tried, with QPass and later TimesSelect.) “Cook’s Illustrated and Consumer Reports are doing fine on subscriptions!” (Those publications forgo ad revenues; users are paying not just for content but for unimpeachability.) “We’ll form a cartel!” (…and hand a competitive advantage to every ad-supported media firm in the world.)

Round and round this goes, with the people committed to saving newspapers demanding to know “If the old model is broken, what will work in its place?” To which the answer is: Nothing. Nothing will work. There is no general model for newspapers to replace the one the internet just broke.

With the old economics destroyed, organizational forms perfected for industrial production have to be replaced with structures optimized for digital data. It makes increasingly less sense even to talk about a publishing industry, because the core problem publishing solves — the incredible difficulty, complexity, and expense of making something available to the public — has stopped being a problem.

Time to once again ponder the Schumpeterian idea of “creative destruction”. Note the sequence of events: First, something changes. That change creates new capabilities. I call this the “new capability creating change.” This makes possible the supply of new goods and services. This, in turn, creates new demand which displaces the old demand.

What happens to the old model is not that is breaks but that it becomes irrelevant. Absent the “new capability creating change”, that model would have continued to supply those goods and services to meet the demand. With the change, the old goods and services are replaced by new goods and services.

Instead of the causal direction implied by “new capability creating change” (where change creates new capability), you could also have “new capability created change” (where new capability creates the change), the opposite causal direction. I think both work in a kind of feedback loop. Change –> new capabilities –> more changes –> more capabilities –> and so on.

The model which used telegraph for transmitting information was rendered irrelevant when the capacity to transmit voice became available. It is not that telegraph gradually morphed into the telephone system. Technological change is discontinuous. You could say that technological change is digital, not analog. Also, changes in digital technology forces discontinuous (and therefore “digital” rather than “analog”) changes on systems.

It may be worth considering systems such as the economy, or its subsystems such as governance, transportation, education, energy, etc., in light of the idea that technological change is digital and that change in digital technologies have a profound impact on those systems.

No surprise to me as I have observed the same sort of insanity in the case of the children of friends and family.

Kids are pretty much forced to do school related activities nearly 14 hours of the day. They go to school for classes, and then go to “tuitions,” and then come back to get homework done, and . . . By the time they are done for the day, they have had no free time. They don’t have time ever to just sit and stare. There is no time for self-reflection. They are becoming narrowly focussed and self-absorbed through all the constant doing of required things.

The textbooks are horrors.

I saw the economics textbook of a kid in the 10th grade. He goes to an IB school in Mumbai. It is a fat tome of about 600 pages long and has within its covers every conceivable topic on economics. It is dense with information. If I had to read that book for comprehension, it would be work for me. I only have a PhD in economics and I would find it hard going.

The kid was struggling with “effect of expansionist monetary policy on aggregate demand” or some such nonsense. Dear god in heaven. What the hell was wrong with these idiots who try to teach macro to 14-year olds? I read the relevant pages and I could not make too much sense of it. The kid of course was so out of his depths that he didn’t know even the most basic of concepts, forget “aggregate demand.” I asked him to explain to me what a demand curve was and got a look of helplessness and worry. He tried in vain to recall from memory some definition of a demand curve.

It was a pitiable situation. I explained that I was not looking for a definition. What I wanted was an explanation of what it was. Then I took a few minutes to explain what it was. By starting at the beginning, I said that it’s an observed relationship between this and that. What do we mean when we say that two things are related? It was a series of questions and answers, slowly building up to the concept. It took so little time but at the end he got the concept so thoroughly that you could shake him up from deep sleep and he will be able to explain to you what a demand curve is and not have to struggle for a definition which he could parrot without comprehension.

I felt that all that his economics course and the book had achieved so far was demonstrate to him that the subject was incomprehensible and that he was inadequate. It had turned him off the subject.

Schools are turning the kids into uninteresting and uninterested people. Their learning so shallow that it all evaporates at the slightest disturbance. In all the furious teaching, what is lost is learning.

What’s the way out? I think there’s a need for a “back to the basics movement.” One of the things that needs to be done is to reduce the amount that is force-fed to the kids. It may appear paradoxical but I believe that school curricula have become obscenely obese.

They say that perfection in a work is achieved not when you have nothing more to add to it but rather when you have nothing more to subtract. The irreducible core is what matters. And one needs all the time in the world to understand that core.

There was a time when it was easy to keep the focus of teaching and learning to that irreducible core. We did not have fat tomes with excruciating details on every conceivable topic. Neither we nor the system could afford fat books. We did not have access to a gazillion web pages with dancing doo-daahs on every topic in the known universe. We were not under the constant pressure of learning new stuff every single day. We did not feel overwhelmed by it all. It was really a very relaxed time. Sit in a few classes every day and when school was over, just run around the neighborhood. Maybe do a bit of homework every now and then but not every day.

We could just sit around and not feel that we were not going anywhere. These days they have designed the Alice-in-Wonderland school system where kids have to run as fast as they can just to stay in the same place.

I think I know what the problem is: people with pre-www mindsets have wandered into a www-world and are totally lost. Their pre-www mindset says that you must commit to memory whatever information you have access to; in the www-world, memorizing available information is not only impossible but it is also totally unnecessary.

Technological change is rapid and is accelerating at an accelerating pace. That’s a function which is differentiable at least twice. Humans adapt to change much more gradually. Human institutions are even slower than humans in adapting to change. The education system is perhaps the slowest human institution when it comes to adapting to change.

Information technology has created an ocean where previously there used to be at most a small deep well. The educational system, a heavy concrete structure anchored to the ground, was designed for a world where water was limited and precious and could only be drawn from a small well. That all changed without much warning. Now the ocean of information has drowned that building since it cannot float. What we need are boats, not buildings. Where previously one had to work at drawing water out of the well, now the task is to keep afloat in the ocean and keep the water out of the boat. Take in too much water and you are sunk.

So here’s an opportunity. Forget the submerged huge buildings. You cannot uproot them from the ground, and even if you did, they will be impossible to float. Those who are stuck in the buildings — the people from the ministry of education mainly — are beyond rescue anyway. Instead, build boats that can float on the ocean of information.

Rebuilding education is perhaps the greatest challenge and the greatest opportunity the world has had in a long time. Technology matters of course and it is easy to note that the most important and innovative technology companies are located in the developed world. That’s so because they co-evolved. Since technology will be at the core of the rebuilding of the education system, it is quite likely that the best new education system will also be created in the developed world. But the real need for a new education system is in the developing countries because they have the populations and the demand is huge.

India could be the home of the new education revolution. India passed up an opportunity for becoming a manufacturing giant; China got that one. I just hope and pray that it does not pass up on this one. The large corporations in India could do it but the government of India will not allow that to happen. Why? The Congress government has not allowed Indians to become fully literate. It cannot afford an educated citizenry because it depends on the poor and illiterate to vote for it.

It’s all karma, neh?

Related posts:

1. The World is (Information) Fat. June 2005.

2. The Age of Superfluous Information. Oct 2005.

3. The High-tech Puzzle. July 2007.

4. Infinite Information, Infinite Ignorance. March 2008.

Although I have only briefly handled an XO, the laptop from One Laptop Per Child, I have read enough reviews about the device to be fully convinced about the innovative computer that it is. Knowledgeable technical experts have expressed almost unreserved admiration for the XO and the innovative technologies it embodies. It is hard not to be impressed by the little green machine.

XO is Great, OLPC for India is Not

How could it be otherwise? Considering that some of the most technically brilliant people have worked on developing it – often coming up with truly innovative technical breakthroughs. Without a doubt, the XO has rewritten the rules of the game and indeed radically changed the way that laptops will be designed.

Its influence can already be seen in the success of netbooks in the developed markets. The chief evangelist and creator of the idea, Professor Nicholas Negroponte, can be justifiably proud of the OLPC program and what it has done–and undoubtedly will do more.

I have had the privilege of expressing my admiration for the OLPC XO in person to Prof Negroponte when I saw him at the launch of the OLPC India project in Mumbai last year.

All this may make me appear inconsistent since I have written dozens of posts about the XO on my blog since 2005 arguing that the OLPC project is absolutely the last thing that India needs. My position has actually been quite consistent.

The essential point is that even though something is technically marvellous does not imply that it is appropriate for a specific purpose or under special circumstances. My argument has been that the XO is inappropriate for India. It would be a mistake for the India to spend its limited public funds available for education in buying the XO laptop.

Educational Failure in India

It is worthwhile to recount the ground reality in India. First, the numbers: the school-going cohort is around 200 million strong. India has around a million schools, a few thousand colleges and universities. Over 90 percent of children drop out of school by the 12th grade. Public spending in education is in the low single-digit percentages.

A depressingly large percentage of schools are so cash-strapped that they don’t even have a blackboard, to say nothing about any other facilities normally associated with schools. Of the little of financial resources available, a good proportion of it is wasted due to negligence and misappropriations.

The Indian education system is an unmitigated failure, especially for the children of the poor. Higher education does not fare much better but the much celebrated successes of a few who graduate from a handful of elite technical institutions superficially masks that failure.

Its Not a Technical Problem

There are well-known reasons for why the Indian education system is a failure but they will not detain us here. What is relevant is that none of factors have anything to do with technology. It is not a technical problem that leads to the dysfunctional system. So technology cannot be part of the fix that the system needs.

This is not to say that technology will not have a role to play once the system has been fixed, but only that it needs the non-technology related interventions before technology can have any effect on it.

It is a matter of sequencing. First get rid of the obvious faults of the system, taking care that the intervention is appropriate to the problem. For example, an administrative problem requires an administrative solution, not a technical or a medical solution.

One of my primary arguments against the OLPC program in India is that it is out of sequence in the sense that there are other more pressing important problems with the education system, which not only will not be helped by technology, but indeed that the diversion of resources to the OLPC will exacerbate the existing problems.

OLPC is Too Expensive

One fact needs to be placed front and center about the Indian educational system: it is financial resource constrained. Sure, human resources are nothing to write home about either but at its base it is lack of money. India cannot afford the OLPC. Let’s do the numbers.

Roughly 100 million children cannot afford to buy a laptop, regardless of whether it costs $400 (a well-equipped Dell) or $200 (the XO). This is somewhat like I cannot afford to buy a Rolls Royce, regardless of whether it costs $600K or half of that. It is outside my budget.

The base cost of XOs for 100 million children works out to be approximately $20 billion. That does not include recurring cost of use and ownership, such as replacement, repair, and support. That could add at least 20 percent more, or $4 billion recurring per year. That’s more than the entire public budget for education in India.

Spending a fraction of that will not do because then only a fraction of children will get the XO, which will be a disaster in terms of privileging some at the expense of the others. It may bridge the much talked about ‘digital divide’ for some but leave the rest worse off because they will not get even what little they were getting before. It is like feeding some cake and starving the rest, instead of distributing plain bread to all.

There are many other reasons for why I don’t support the OLPC program for India which can be explored later. For now, the bottom line is that it is too expensive. There are more affordable solutions for India – such as making good books inexpensively available and funding students (as opposed to funding schools.)

Netbooks Will Have to Wait

In summary, the OLPC XO can perhaps be useful in some middle-income and most high-income countries. But for a low-income country like India, we have to continue to look for something more appropriate such as blackboards, books, and paper notebooks. The netbooks will have to wait.

What’s worse than a $10 laptop that winds up costing $30? A $10 $30 laptop that’s not really a laptop at all. India is shrugging off the disappointment surrounding its apparent failure to bring home-grown tech to its youth, but thankfully isn’t giving up on the kids, ordering a whopping 250,000 OLPC XO laptops. Waiting this long to drink the Negroponte Kool Aid means 1,500 schools will get the latest and greatest models, featuring VIA C7-M processors and bumped up storage. The plan is for a total of three million portable computers for Indian schools this year, and while it’s unclear just how many will be little, green, and different, that’s a whole lot of lappys regardless. [Emphasis added.]

I thought that India was done with that OLPC insanity bit. I was wrong. The sheer stupidity of those who make these decisions never ceases to amaze. Or perhaps it is not stupidity but cynical manipulation of the system by power-hungry politicians using public funds to give away goodies to their favored caste and religious groups in exchange for political patronage.

Update: Just came across olpcnews.com’s post which gives more details.

Satish Jha, president and CEO of OLPC India has announced via IDG that two government organizations and one private-sector entity placed a 250,000 XO laptop order. Apparently, the XO laptops will be distributed to about 1,500 schools, starting in June.

This is seriously disturbing. They are doing their best to further impoverish a seriously poor country. Hell would be too good for these.

Information and communications technologies present useful tools. The value of IT lies in the utility those tools afford. In other words, there is nothing of intrinsic value in IT – it is only valuable to the extent that the tools are useful and relevant in a given context.

To bring this matter into sharper focus, it is better to talk about “information technology tools” (or ITT) rather than about IT alone. The stress on “tools” helps us avoid the traps that lie in wait for those who confuse technology with what one is supposed to do — a confusion of means and ends.

Utility of Tools

Tools are useful. But their utility is circumscribed by the situation at hand, which determines whether the tool is relevant, effective and efficient. A hammer is very useful in the context of nails but quite worthless when you need to determine the temperature or do arithmetic. That is, a tool is has to be relevant to the need.

You could use a hammer on a screw but it would be better to use a screwdriver. A hammer is not as effective as a screwdriver in the context of a screw. Effectiveness of a tool is important.

Tools also have to be efficient. You could use a fancy weighing scale costing thousands with sensitivity in micrograms for checking your weight but why would you bother if you could get your weight to the nearest 100 grams on a cheap store-bought bathroom scales.

Once a situation is properly understood, two jobs remain. The first job lies in figuring out which of a large set of available tools is the best tool for the job in terms of relevance, effectiveness and efficiency. The second job is to acquire the ability to use the tool if one does not already have it.

Even if we have determined that a CAT scanner is the tool required in terms of effectiveness and efficiency, we still have to address the question of affordability. And finally, we need to have the expertise to operate the scanner and interpret the results. The ability to use a tool matters.

So in summary, technology sounds great but has value only in the utility of the tools it provides, and this utility is contingent on the relevance, effectiveness and efficiency of the tool. Furthermore, affordability has to be considered. Lastly, the ability to properly use a tool is a prerequisite to deriving utility from it.

All this is glaringly obvious but let’s just put it in there for the record.

Tools are Demand Driven

Since tools are a means and are not ends, the proper sequence of intervention in a particular situation is to first fully understand what the situation is and then look around for the appropriate tool. As I have argued above, the appropriateness of the tool is context sensitive and the ability to use the tool. This is another way of saying that the use of tools is demand-driven.

Demand driven means one does not have to promote the use of tools – one has to promote the desirable goal. Once the goal is sold, the demand for the tool will emerge automatically. Focusing on tools instead of specific goals is akin to putting the cart before the horse. Worse yet, it could be like pushing a string: silly and ineffective.

With this introduction, we are now ready to get down to the main point:

The Rational Information Technology Policy

Be totally blind, deaf and dumb on whether to use or not use IT tools.

There you have it. I have solved the problem of an IT policy.

There is no need for any specific IT policy. The use of tools is the outcome of a set of rational processes which arise from a set of rational policies that address rational goals. IT use is a derivative demand, not a final demand. IT and its tools are an intermediate input to a process whose end result is desired.

For the sake of completeness, here is a list of areas where IT tools may conceivably be of use: education, agriculture, industry, commerce, arts & entertainment, medicine & health, research & development in science and technology, and so on.

Let’s take education as an example. Suppose the education sector were liberalized. Investment will flow into the sector. Supply will expand to meet the demand. Firms will figure out the most effective and efficient ways of providing education. In all probability, IT tools will be used by the sector. Computers, the internet and other IT tools will spread around the country.

The role of the government in the education sector is limited to financially support those students who face financial constraints.

The major point here is that people who are in the business of education are much better placed to know which tools to use than some government bureaucrat who has little knowledge of what tools are most effective in education.

Conclusion:

The best IT policy is a non-existent IT policy because the less any IT policy prescribes the better it is. However, a non-existent IT policy means that there will be no need for a Ministry of IT. Without a ministry, there will be no need for huge multi-billion dollar budgets. Without multi-billion dollar budgets, there will be no profit in being part of the government. That’s unfortunately our destiny. A world with huge government and fat policies.

It’s all karma, neh?

Technological hubris is sometimes the result of infantile solipsism commonly encountered among those who are – paradoxically – at the two opposite ends of a spectrum of technical competence: those who are understand technology very intimately and those who have a very feeble grasp of what technology is. The former see the world and its concerns as merely a collection of technical problems just waiting to be solved by the available large collection of expensive technical wizardry; the latter are ignorant of technology but have a magical belief in the awe inspiring power of technology to solve all problems, technological or not.

The two groups sometimes come together and enter an unholy alliance to steer public policy with devastating impact on the wellbeing of the rest of the world. The alliance of political parties (the collection of technological ignoramuses) and some IT industry insiders (the collection with hammers who cannot imagine that every problem is not a nail) is a case in point.

Got a terrible educational system? Well, what we need is a laptop for every child. Lousy, apathetic governance? Give a smart card for every citizen. Distressing social problems due to extreme poverty? What we need is 2 mbps broadband connectivity for every household, however remote and inaccessible. Lack of clean drinking water, primary health care, malnutrition? A smart phone for every poverty stricken household is the answer.

That sort of policy is the unpalatable result of a combination of old-fashioned greed and blinkered pig ignorance. Public policy choice – especially in a democratic setup (however cargo-cultish {May 2004}) – requires public support. That is available by the truckloads, unfortunately.

Silly Public Policies

Harebrained schemes hit the headlines with tiresome regularity. Occasionally, out of sheer frustration at the mindlessness of the proposal, one is moved to throw caution out the window and express one’s distress. “Listen,” one says, “don’t you see that this idea is really a crock of bovine excrement? Not only is this a bad idea, it is going to cost an arm and a leg. Problem is that we are quadriplegics here and the last thing we can afford is an arm and a leg.”

And the public responds with, “No, that is a brilliant scheme. It will benefit the poor. You are a heartless free-market capitalist selfish rich ivory-tower intellectual bean counter who is not interested in the welfare of the country. You will never understand that this scheme will lead to benefits. So why the hell are you against this scheme, which even if it fails to achieve 99% of the goals, will at least have 1% benefit? Are you so bloody selfish that you will deny the poor the 1% benefit? Are you saying that zero benefit (if this scheme is not implemented) is better than whatever little benefits that will surely arise if the scheme is undertaken?”

There is a sufficiently large constituency of people who will actually advance that argument. I am not making this up. Read the popular press, and even blogs and mailing lists, and see what I mean. Read and then weep.

You should weep because this is the group that, although apparently literate and numerate, never got educated, despite all the massive spending in education. You have heard this before from me: dig deep enough into what are the ultimate causes for poverty in the modern world, one cause you will zero in on is a dysfunctional education system. The failure of the education system produces – among other ills – a large number of people incapable of basic logic. Most sadly, this group votes and thus influences policy – policies that sufficiently frequently adopted over an extended period guarantee poverty.

Pascal’s Wager

Whenever I hear the argument that a particular policy (despite its obvious faults and questionable merits) should be tried since there will be some (however negligibly small) benefits, I am reminded of Pascal’s wager and how people too stupid to handle basic logic fall for it.

Briefly, Pascal argued that believing in God is reasonable since even in the absence of any proof for the existence of God, it makes sense to believe than not to believe. If God does not exist, then you have lost nothing by your mistaken belief. However, if God does exist, disbelief could cost you infinitely (you would be tormented in hell for eternity), and belief would guarantee you infinite happiness (you would spend eternity in heaven. Even a very small probability of God’s existence, multiplied by the infinite potential gain or loss yields a non-zero result.

The trouble with that argument is easy to see. The argument is approximately true only if there was one true God. What if you end up believing in the wrong god? The Christian god would punish you with hell if you end up believing in the Islamic god, and vice versa.

The general principle is that by doing A, you end up foregoing the benefits of doing B, one of many choices which are excluded by A. If all you could ever do is A or nothing, then clearly the benefits of doing A is all that matters. But in a world where there are choices one can make, merely focusing on the expected benefits of A is misguided and cannot be evaluated without reference to the expected benefits of the other choices which A precludes.

Belief in monotheism rests on a large collection of logical fallacies (and other assorted stupidities humans are prone to) such as Pascal’s wager. But as a system that misapprehends reality through cognitive failures, monotheism has hardly cornered the market. Communism and socialism draw their life-fluids from the same poisoned well of illogic and ignorance.

The fact that spending $2 billion on laptops for 10 million students will yield some benefits is not in doubt. The question is how do those benefits stack up against the benefits of, say, spending the same amount on making 100 million literate and numerate using some other technology.

Here ends this rant. What I rant about is that too often too many are content with partial analysis when what is required is a general (or full) analysis. Don’t just palpate the animal and say that it is like a snake; continue to walk around it and then tell me if that is an elephant or not. What our education system has to do is to teach the kids that you have to think critically, and question assumptions and motives. The system produces too many gullible people who are dazzled by lofty speeches and shiny gadgets.

Previously in this series on a rational IT policy (provoked by the BJP’s “IT for All” policy announcement), I had written the preamble. This is the foreword to the upcoming IT policy. When, you may ask, is the IT policy going to be introduced. Patience, my dear gentle readers. By the time I am done with the laying out the foundations of a good IT policy, I think the policy will write itself.

In the following, I will present the features of a rational “IT Policy” and argue why it makes sense. This is only an academic exercise as this is not likely to be followed by the policymakers of India. Color me cynical but if Indian policymakers were in the habit of making rational policies, India would not be a desperately poor country, would it? Why India gets saddled with moth eaten policies made by inept policymakers is a different matter that we will save for a rainy day. But first, let’s talk IT and what it is.

Information technology (IT) – like most other technologies – provides tools and ultimately it is valued for utilitarian purposes. One generally does not care for the technology so much as care for what it allows one to do. All tools are merely means and are not ends. Technology tools are not terminal values, so to speak. Neither is possessing tools a good thing merely because it is a nifty tool and is of no utility. Confusing means and ends is not very clever but people frequently do it with predictably negative outcomes.

There is something special about information technology that it immediately attracts the worst sort of confused thinking. Food growing and processing technology, just to take a random example, is extremely valuable for feeding the starving billions. Yet it does not attract the sort of attention that information technology does. The reason could be that food processing technology is generally hidden behind factory walls and the shelves full of food in supermarkets and grocery stores don’t immediately bring to mind the fact that technology was intimately involved in the process. That technology is not visible.

IT technology is very visible. Computers, mobile phones, music players, cameras – a whole range of gizmos with bells and whistles are plainly evident. Not just that, they are what rich people have. Rich people living in rich countries have plenty of IT goodies. From there, it is only short hop skip and jump to the illogical conclusion that if one had IT goodies, one would be rich. It’s like saying, “Rich people drive around in BMWs. Poverty stricken people don’t drive around in BMWs. So if we gave every poverty stricken family a BMW, poverty will be eradicated.”

Actually that BMW example is ridiculous but not any more ridiculous than attempting to help the abjectly poor – so poor that they don’t have a clean drinking water, no sanitation, no health care, no education, and cannot afford to feed their children – by giving them access to last-mile 2 mbps broadband access, laptop computers, smart phones, and a digital identity card.

Let me repeat the implicit argument that propels the sort of IT policy such as the BJP recently declared. It goes like this: “Advanced industrialized countries use a lot of IT tools. If we gave the very poor these tools, our economy will become an advanced industrialized country.”
They confuse cause with consequence. Only after a sufficient amount of development has taken place can IT tools be developed and subsequently used. Below a certain threshold of development, IT tools are pretty worthless. Beyond that threshold, IT tools can accelerate development and are indispensible.

Let’s review what the development experience of the currently advanced industrialized countries has been. They were at one point about a century ago as poor and underdeveloped as many part of present day India. They did not have access to IT, just like most of present day India. Not only did they develop from that low level, they eventually developed the IT tools. Martians did not descend from flying saucers and hand over the technology to them.

That last point needs emphasizing. The economy co-evolved with the technology that it developed. There was co-development: the technology developed together with the human resources required to use that technology. It is a question of balance. And the balance is between the ability of the population to use the tools of IT on the one hand (the demand side) and the development of those tools (the supply side.)

To elaborate just a bit further, they learned how to read and do arithmetic before they started using word processors and spread sheets. If they had been given Word and Excel by a Martian Bill Gates as a present before they knew how to develop these programs or even before they became literate and numerate, it would have been as useful as presenting a bicycle to a fish.

Sequencing matters. One has to learn how to read and write before attempting to do learn quantum mechanics.

This concludes the preamble to the IT policy document which I will release in the public interest. As a big supporter of free and open source content, I offer it for the political parties of India to adopt. There is of course no danger of any party actually taking it because firstly they are not that smart and secondly, this policy would actually help educate the population – which is the last thing these parties want as it will signal their exit from the matter of governing.

So there.

I am pleased to note that the BJP believes in the use of technology for development. The BJP recognizes that IT enhances productivity and increases production. Their press release on the IT vision document is unequivocal and clearly lays out the components of the policy. It should be required reading for pundits and lay persons alike. Their policy declaration “IT for All” is bold, visionary, timel and ambitious. It is also fatally flawed and wrong-headed.

BJP’s pledge: IT for All

Shri LK Advani said, “A future NDA Government, if elected to office in the coming parliamentary elections, would give high priority to the realisation of this vision, which would help India overcome the current economic crisis; create productive employment opportunities on a large scale; accelerate human development through vastly improved and expanded education and healthcare services; check corruption; and make India’s national security more robust.”

Exciting though the vision and the specific proposals are, I have a few points that I would like to get a better understanding of. I am not a policy pundit. So my take on the matter is based mainly on simple arithmetic. (The text in blockquotes is from the press release of the IT policy linked above.)

• Multipurpose National Identity Card (MNIC) with unique Citizen Identification Number (CIN) for every Indian citizen in 3 years; to replace all other identification systems.

Perhaps MNIC is a great idea. I imagine that it will be used for a large number of transactions, although what they would be I cannot tell.

Given the context, it will not be a paper card. The US social security number is just a plain piece of paper. But I am guessing that in India it will be a smart card with an embedded chip carrying information about the citizen.

But let’s do the arithmetic. India has around 1,200,000,000 citizens. Assuming a conservative Rs 200 (around $4) per card, that works out to be Rs 240,000,000,000 or around Rs 24 thousand crores. That is the cost of the cards only.

The administrative mechanism and the manpower, the computer systems that would be required to handle the data, the process to authenticate the identity of the person before issuing the card, handling the security of the card and the transactions done with it, etc., will be extra. Let’s assume that these involve a one-time cost of Rs 1,000 per citizen and an annual cost of Rs 100.

Adding it up for those numbers, the first year cost of the program will be Rs 24 thousand crores (cards), Rs 120 thousand crores for the getting the system deployed and the fixed costs, and Rs 12 thousand crores for the first year’s operation. That is a sum of approximately Rs 156 thousand crores (or around $30 billion.)

Designing such a massive system and rolling it out will be a challenge. One assumes that the required human capital is readily available in India for such a task. I have no idea how many people and how many years this will take but I am sure that the BJP has worked it out already. The benefits of a Rs 156 thousand crore investment must have also been done by the BJP.

• 1.2 crore (12 million) new IT-enabled jobs in rural areas.

The goal is most impressive. I wonder if the government will provide the jobs because it is unlikely that the private sector will find much use for starting up business in rural areas considering the following facts: lack of trained people, lack of basic infrastructure (most importantly electrical power), lack of demand for IT-enabled services, etc.

• 1 crore (10 million) students to get laptop computers at Rs 10,000. Interest-free loan for anyone unable to afford it.

I assume that there are more than 10 million students in India who are unable to afford laptop computers. So they will have to be given a loan. I presume that the loan repayment will take a few years – time for the student to graduate and earn. So for at least 5 years, the total loan will be an expenditure for the government.

Cost of 10 million laptops (assuming that there are laptops available for Rs 10,000 – which is not so anyway) is Rs 10 thousand crores.

• National Digital Highway Development Project to create India’s Internet backbone, and Pradhan Mantri Digital Gram Sadak Yojana for last-mile access even in the remotest of villages.

There are 600,000 villages in India, some of them really remote. Assuming a conservative Rs 10 lakhs on average per village for providing last-mile access, the total cost is Rs 60 thousand crores.

• Broadband Internet (2 Mbps) in every town and village, at cable TV prices (less than Rs 200/month).

The prices of internet access currently in cities are over Rs 4,000 per month for 2 Mbps service. It is cheaper to provide access in cities, as compared to towns and villages (low density habitations.) Costs dictate prices and therefore to provide this service at Rs 200 per month, the subsidy will have to be around Rs 4,000 per month or around Rs 50,000 per year.

Assuming that there are 10 million internet-enabled households who will get the service, the annual subsidy will cost Rs 50 thousand crores.

• All schools and colleges to have Internet-enabled education.

There are around 1 million schools in India. Assuming making education “internet enabled” in each on average costs Rs 10 lakhs per year, that would cost Rs 100 thousand crores per year.

• 100% financial inclusion through bank accounts, with e-Banking facilities, for all Indian citizens. Direct transfer of welfare funds, preferably to the woman of the house.

Good goal. Assuming that this costs Rs 100 only per citizen per year, it would cost Rs 12 thousand crores per year.

• Every BPL family to be given a free smart mobile phone, which can be used by even illiterate users for accessing their bank accounts.

BPL families suffer malnutrition, are illiterate, don’t have access to clean drinking water, don’t have money to educate their children, cannot afford medical care, most live in slums in cities and in the most desperate conditions in rural areas. Their first priority is unlikely to be smart phones. The best thing that they can do with a free smart phone would be to sell it to someone who can use the phone and then use the money for food, etc.

But even then, let’s calculate the cost. A smart phone costs at least Rs 10,000. Assuming 20 million BPL families, the cost of this program is Rs 20 thousand crores.

Adding up the numbers so far

Just adding up the numbers so far, we have Rs 408 thousand crores, and we are just in the beginning of the wish-list. That is a large number even when I have actually taken lower-bound figures for the expenditure involved.

How large is that? Rs 4,080,000,000,000. That is 4 trillion rupees. That works out to be over $80 billion. (Just for ease of arithmetic, let’s use $ instead of crores of rupees.)

India’s population is around 1.2 billion. Of this, around 800 million survive on less than $2 per capita a day, and the remaining 400 million (I assume) on $ 5 per capita a day.

Governments don’t generate wealth. They transfer wealth from one segment of the population to another. The $80 billion for the government programs listed above will come from the top 400 million. Basic arithmetic alone shows that to transfer $10 to each of the 800 million (to get the $80 billion), it would require $20 per capita from the 400 million, or about $100 per family, in addition to the current taxes they pay.

This massive transfer would require a massive governmental administrative mechanism. The more money public servants handle, the more there are opportunities for corruption. This opens additional channels for corruption in a system already beset with massive corruption. If the goal is to reduce corruption as Mr Advani states, then increasing governmental interference and control of the economy is certainly not the way to go about it.

Conclusion

Reading the document so far is exhausting enough and so I will leave the rest of the press release for later. I have yet to muster up the courage to read the 40-page pdf of the IT vision.

IT is important and definitely holds a major promise of enabling India’s growth. But the items above are neither necessary nor sufficient to do so. And most importantly of all, there is not even the slightest indication of whether the massive spending will result in any benefits to the poor who need help.

One of the most important lessons one learns from the centuries of human development experience is that people do achieve economic growth provided they have economic freedom. Economic freedom coupled with even modest levels of human capital is sufficient for economic development and growth.

The currently developed countries did not have IT tools during their development. What they had was human capital (quite modest by today’s standards) and economic freedom. Human capital and economic freedom enabled them to develop the IT required for further increase in human capital and therefore economic development.

The lesson is that IT is not necessary and certainly not sufficient for economic growth

Technology – and more specifically information and communications technology – multiplies the capabilities of a system. If the system is itself dysfunctional, IT enlarges the dysfunction; if the system itself is good, IT enlarges the good. The key is therefore to make the system good before empowering it with IT.

Related posts:

Formula for Milking the Digital Divide.

As the photoshopped image in my first post on this matter previously states, “I see stupid people . . . they don’t even know that they are dumb.” And now we note the furious back-peddling. I had noted in the followup post that the claim is that it was a typo. It seems that India’s Minister of State for Higher Education D Purandeswari’s claim that a $10 laptop was a reality was based on a simple typo, a dropped “0″. (H/t: Sudipta)

A fine invention — the missing zero — from the land which lays claim to have invented the zero.

It’s a sad commentary on the state of India’s governance that the minister of state for — hold on for this — “higher education” is so ignorant so as to be unable to reason and uncritically announces a near impossibility. Should anyone be even the least bit surprised at the sorry state of India’s education sector if its policy makers are so astonishingly disconnected with reason and reality?

I can imagine an illiterate person who has never seen an electronic device in his or her life being unable to estimate the cost (or the price) of a computer. He or she would have no basis for estimating the cost — it could be anything between Rs 1,000 or Rs 100,000 or more. But even the average high school student in India — who probably knows roughly the prices of cell phones, mp3 players, various electronic toys and gaming machines — would easily enough reject the notion that a laptop could cost as little as Rs 500.

You don’t need to have the smarts of a professor of quantum physics to know that some things are too improbable. For instance, most of us really don’t know how much a commercial airliner costs. For all we know it could be $50 million or it could be $500 million. We have no way of telling for sure. But if someone claims that they have recently built one for the astonishing $100,000, we would tell him to get a brain cell or two. We can do this because we know that a car costs around $20,000 and a commercial airliner is tens of times bigger and more complicated than a car.

I will not dwell anymore on this shameful display of ignorance. Let me review a bit of economics to take off the bad taste in my mouth left by having dropped my jaw too often lately.

The first fun fact is that most of the manufactured stuff available out there is produced by private firms in competitive markets. That implies that they have to make profits. How do they make profits? By reducing their costs. Because in competitive markets, if your costs are below what the prevailing price for your widget is, then you make a profit. But since all firms are simultaneously trying to cut costs, the price itself drops because firms reduce their own prices as much as they can while still making a profit so that they can sell more to the market. This leads to the situation that in competitive markets, prices track costs closely.

If you are getting a laptop for around $700 a pop (give or take a couple of hundred bucks), then you can be sure that the costs are around that. The margins are super thin. Laptops are almost commodities and there isn’t much room for super-normal profits.

The second fun fact is that manufacturing has “scale economies.” The more units of something you manufacture, the lower is your per unit cost. So what happens is that firms specialize in the manufacture of components.

Example: Intel makes processors. They make them by the millions. They spend billions of dollars in the design of a chip (that’s the fixed cost) but then manufacture tens of millions of those babies. That distributes the high fixed costs and so the average fixed cost is a few dollars per chip. The scale economies arise from the combination of high fixed costs and low variable costs (these are the costs of the silicon wafer and the fabrication of each individual chip.)

Then Intel sells these chips to others. These processors are intermediate goods, as opposed to final goods such as laptops. Much international trade is trade in intermediate goods. You see container ships carrying components from one country to another. The globalized world we hear so much about is held together by links that are essentially component manufacturing.

There are tons of intermediate goods. Just look around. The LCD display: made by a few large manufacturers like Samsung. Same goes for the hard drives in your computer. But let’s not restrict ourselves to computers alone. The windshield in your car is made by one of a handful of windshield makers, regardless of whether you drive a Suzuki or a Honda.

Every subsystem of a complex machine is actually produced by some firm specializing in the manufacture of that bit. The end product that you buy is an assembly.

What does this specialization imply? Obviously that you get stuff at prices that would have been impossible without it. The firms do the best they can, spending truck loads of money in research and development to figure out how to make their stuff cheaply. Over decades of this sort of learning and doing, the ones that manage to survive are the best of the breed. It is not easy to dislodge these firms. So if I have dreams of starting up a company which will knock Intel out of the ring, I should wake up and smell the coffee.

The bottom line is this: a computer is a complex bit of manufactured stuff, each subsystem of which is manufactured by firms at the lowest possible costs given the present state of the art, and it takes billions of dollars worth of investment to keep improving the technology and advancing the state of the art.

You can bet your bottom dollar that although things get cheaper over the years, there are no quantum leaps. (Here, I use the term quantum in the original sense of the word — a discrete step — and not in the sense that is generally misused as a synonym for “massive” or “big.”)

Things improve gradually. They evolve. Not just evolve, they co-evolve. To make something, it takes an ecosystem of firms all competing and all trying their hardest to cut costs and improve efficiencies. Last month I paid $100 for a 250 GB external (USB) hard drive. Two years ago, I had paid $130 for a 80 GB hard drive. Next year, I will perhaps pay $100 for a one-terabyte drive. But I will not be paying $2 for a 250 GB drive next year. That will not happen.

Why? Because there is a simple rule. There is a minimum cost dictated by the amount of stuff in a device. It is easy to arrive at that minimum cost. Just weigh it and then multiply the weight with the per kilo cost of the matter that went into it. By this device you can immediately put a floor on the cost (and therefor the price) of a car (weight multiplied by the cost of steel, say), or the floor on the cost of a bus. The latter minimum will be more than the former.

But note that this is a minimum. It says nothing of a maximum. A Porche sports car can cost a lot more than an average bus.

Also note that in many cases, the smaller the thing, the more expensive it can be. The Macbook Air costs a lot more than the average laptop.

The point is that one can reject the idea that a computer, however minimalistic in its design, can cost $10. It takes eye-popping ignorance to do otherwise. (Here we are not talking of a price. The price can be arbitrarily set by the government.)

Well, that is it for now. Got to go. Perhaps I will write more later.

I suppose it should not come as any surprise that it is now being claimed that the $10 cost was a mis-statement and the actual cost is $100. And like the “$100″ OLPC which actually costs twice as much, probably the Indian laptop will — if it ever is actually produced — cost anything between $200 to $400, at which point it would be pointless as currently laptops are being produced for around $200 a pop by many manufacturers. I think it is a safe bet that the government officials who continue to make their $10 claims are clueless about technology and about the complexity of building a complex machine.

The newspapers are reporting that the laptop will be unveiled today. A couple of reports even quote yours truly.

However, some experts doubt that a laptop at $20 or $10 is commercially sustainable. Rajesh Jain, managing director of Netcore Solutions and a pioneer of low-cost computing in India, said: “You cannot even [make] a computer screen for $20. And India does not build much computer hardware. So where will the savings come from?”

Some bloggers today saw the new laptop as nothing more than a “souped up calculator”. The sceptism was summed up by Atanu Dey, whose blog read: “If the government could pull-off a near-impossible technological miracle, does it not imply that the entire global computer industry is either totally incompetent or else it is a huge scam which produces stuff at very little cost and sells them at exorbitant prices.” [guardian.co.uk.]

Both Rajesh and I quoted in the same news item . Here’s a bit from Indian Express:

But even the most rudimentary netbooks cost more than ten times as much, and it is uncertain how this laptop will manage to display most internet content or really, even cover the cost of its material components. Atanu Dey, economist and tech commentator, has been scathing in his attack on the credulous press that bought the ten-dollar boast.[indianexpress.com]

A collaborative team between the Indian governments ministry of science and ministry of technology will unveil a super-low-cost computer on February 3rd, as part of the country’s $10 laptop project. Specifications of the notebook – which is intended for education use – are unconfirmed, but unofficial sources suggest it will have 2GB of memory, both ethernet and WiFi connectivity, the ability to expand the storage and low power requirements of just 2W, all in a small, portable package. [Slashgear]

Here’s what I feel like.

(“I see dead people” is one of my all-time favorite line from a movie.)

Like Milton Friedman saw money supply factors behind every economic disaster (which provoked Robert Solow to remark “Everything reminds Milton Friedman of the money supply. Everything reminds me of sex, but I try to keep it out of my papers”), I see the failure of the Indian education system behind every episode of public stupidity.

I am quite willing to recognize that government officials are not the sharpest knives in the drawer — one secretary for higher education said, “At this stage, the price is working out to be $20 but with mass production it is bound to come down” — but how does the press go about reporting their statements as if they make even the least bit of sense? How on earth is one be able to compose syntactically correct sentences and publish them in blogs without having the ability to reason worth a damn, like this item in The Better India illustrates?

The writer states that poor people cannot afford laptops for education now but this “is poised to change in the near future with the advent of a new Rs. 500 laptop (currently in prototype phase).” Why? Is it plain gullibility? He read somewhere that the government has claimed it to be so and uncritically accepts it as something that is even remotely possible. Besides that, what he fails to do is basic arithmetic.

I think that the Indian education system fails dramatically when it comes to teaching basic arithmetic. Of course they do teach 2 plus 2 is 4 and that sort of thing. But it does not teach how to reason after doing the sums. It is not just how to add that matters but what and why of addition that matter more.

So what’s wrong with a $10 laptop? What’s wrong is that it flies in the face of all reasonable expectations about the world. It is disconnected with reality. The reality is that Nicholas Negroponte’s OLPC project tried desperately to build a $100 laptop and despite having access to considerable talent and expertise, the best it could do was a machine that costs around $200. What this tells us is that hardware costs, though they have fallen dramatically over time, are still high enough that it is virtually impossible to produce a laptop for around $100. If it were possible, they would have done it.

One has to either ignore — or be totally ignorant of — physical, commercial, and technological limitations to make an outlandish claim that the Rs 500 laptop will consume 2 watts of power. Even a small phone consumes more than that, and any laptop is a lot more complex than a cell phone.

The most compelling reason for totally rejecting this claim of a Rs 500 laptops is this: if the government, together with “students of Vellore Institute of Technology, scientists in Indian Institute of Science, Bangalore, IIT-Madras” could pull-off a near-impossible technological miracle, does it not imply that the entire global computer industry is either totally incompetent or else it is a huge big scam which actually produces stuff at very little cost and then sells them at exorbitant prices.

As far as I know, the global IT industry is viciously competitive and therefore cannot price their goods — especially consumer hardware — at prices too far above costs. So if the price of some display is $200, one can be reasonably sure that that is pretty much very close to cost. Furthermore one can be confident that each manufacturer is trying its best to reduce the cost as much as possible — because that is how they make their profits. That’s called competition in the market.

So if one were to believe that some entity is capable of producing some sort of laptop at a cost of Rs 500, then one has to believe that that entity can overturn the entire global IT industry by producing it cheaply and undercutting every other vendor in the world. If the laptop costs Rs 500, presumably each major component of it must cost less than Rs 50, assuming that it has at least 10 major components. Since these components each actually cost Rs 500 at least (and most cost in the thousands), if the government can produce them at a tenth of those costs, clearly the government of India should be in the hardware manufacturing business. Clearly the Intels, HPs, Dells, Samsungs, IBM, etc should be worried.

But wait! It is not that the cost is Rs 500 but the price will be Rs 500. Perhaps that’s what the government means. The government will sell it for Rs 500. And you and I will foot the bill. Votes. Votes bought at our expense. Good thinking, dear UPA.

A recent article “One Laptop Per Child: What went wrong” by Jon Evans writing for The Walrus, makes interesting reading. Jon is not a fan of the OLPC and says that “it was a bad idea to begin with” and that “the XO laptop is a piece of crap.”

Meanwhile, the rest of the world has already lapped them. My Acer Aspire One netbook is faster, has more memory, a better screen and keyboard, connects to encrypted Wi-Fi networks, renders Wikipedia correctly, and has a user-friendly interface with many useful applications. There’s no comparison: it’s miles better, for a comparable price. As far as I can tell, the OLPC team so wanted to be revolutionaries that they insisted on reinventing everything at once, and as a result, failed everywhere. (Although to be fair they did inadvertently spur the growth of the netbook market that has since entirely overtaken them.)

But that hardly even matters, because the whole idea of distributing laptops to poor children was completely misguided to begin with. Did the OLPC braintrust think they were bringing modern technology to the Third World? They were years too late; it’s already there, in the form of the not-so-humble-any-more cell phone.

Jon says that what Negroponte should have done is to give one smartphone to every child. I don’t agree with Jon on that: phones are only marginally useful for educational purposes. I think laptops are much more useful. It is not the utility of laptops that I question; I question the cost at which that utility is delivered.

The OLPC team responded with “What Went Wrong with the Walrus’ OLPC Review“. Cory Doctorow is quoted in there —

I believe that the world’s poor will derive lasting, meaningful benefit from widespread access to technology and networks. And I believe that laptop computers will eventually find their way into the hands of practically every child in the developing world, even if the OLPC project shuts its doors tomorrow.

The OLPC project is in trouble. It laid off half its staff earlier this month and cut the salaries of the remaining 32 people. However it turns out for the OLPC project eventually, the world has gained from the learnings that the project provided. Part of the price for the lessons will no doubt be paid by the people of some poor countries whose governments have bought the XO for some of their children. That’s just the way it is.

(Hat tip: Naman for the link to Jon’s article.)

On the 24-hour news channels, the presenters have to keep talking non-stop about whatever is the breaking news. Naturally, it is humanly not possible to say something meaningful about any event without some time to think about it. So the need to keep talking incessantly about an event which can only be described in a few words results in verbal diarrhea. There is so little content in the story being told that the TV screen has to be filled with all sorts of other items: there are two or three lines of scrolling texts relating to different issues, some totally meaningless video occupying part of the screen, another part of the screen given to some advertisement, etc.

The nature of news is that it has little information content. News is froth on the surface of a deep ocean of interrelated events that unfold over time spans that range from weeks and months to years and decades. Merely being told about the news — even if the same little bit is repeated ad nauseam — when one lacks some familiarity with the bigger more persistent issues, is useless. It gives one information without any increase in knowledge and understanding.

I don’t like news programs that look at the world from the minute-to-minute perspective. Tennis matches and soccer games lend themselves to that but not real news.

People have different preferences, thank god for that. It’s a matter of taste and while I would recommend what I like, I don’t expect others to agree. I like programs that help me better understand what happened, how it is related to the past, what impact that will have in the future, and provoke me to think about the unanswered questions related to the event.

I would certainly like a program which is titled “Not News”. In that program, I would like to hear a couple of people who have a deeper understanding of the world than I do talk about what is going on. I note that “breaking news” often dig up talking heads but it is an ugly sight. It is always a lack of time: too little time to have pondered the issue at length before being thrust in front of a mic or a camera, and too little time to actually say what they have to say. The best they can do is to make some inane observation and it is back to the incessant chatter of the tv presenter.

I am not as familiar with Indian tv programming as I am with American tv. I think American commercial tv news programming is basically crap, and I suspect that Indian tv programming is heavily influenced by American tv (like most of the other garbage that the US produces and the rest of the world readily adopts.) But there is great stuff on American tv as well. I really like the PBS news programs like “The News Hour with Jim Lehrer”. For thoughtful views, I like programs like “Charlie Rose” and Terry Gross’s “Fresh Air” on public radio is an all-time favorite.

I think that there is a market for such programs in India. One of these days, some people in India will make a pile of money and make a significant difference by starting such channels. I suggest “Not the News” as the title of one such program.

Related posts:

Information Overload (May 2007).

The Age of Superfluous Information — Part 1. Part 2. (Oct 2005)

The World is Information Fat. (June 2005)

It is fairly well understood that information and communications technologies (ICT) tools expand choice. We all have access to a very large set of information and have the freedom to choose what we want to read, watch, listen to, etc., etc. ICT expands our “downstream” choice. What is not as well understood is that it expands our “upstream” choice also. It is a two-way medium, unlike say broadcast and print media which only allows us downstream choice: using ICT we send back information indicating our choice and thus guiding what comes downstream.

In other words, ICT expands the menu of options we have and also gives us the ability to change that menu. Options that are not exercised fall off the menu and this leads to more efficient outcomes since resources are not wasted on things that people don’t value. All this is trivially true and one can be guilty of stating the obvious except for the fact that we have yet to make full use of the power of upstream choice that ICT affords in scores of areas which would make economic and political freedom more meaningful.

Democracy 1.0

Democracy is often advertised as a system which allows political freedom wherein citizens have choice in electing public officials who then make public policy choices. That was a reasonable system in the sense that it was efficient. (Note the “was.”) It was neither expected nor possible for everyone to express their preferences on every matter on every occasion and have these preferences aggregated to arrive at the appropriate policy decisions on various matters. What was possible was to have occasional elections in which the public officials would be elected who would have the authority to determine public policy as they saw fit. If the elected chose an unpopular set of policies, they would be replaced in the next election cycle.

The actual implementation of democracy is constrained by the available technology. For instance, when the rules were framed for political institutions of the newly independent American states in the 1770s, the communications and transportation systems were primitive. You could not have instant voting on specific matters as and when the need arose: you could only have period voting in general.

If people value a democratic form of political organization, it must be because they value choice and the freedom they have in exercising choice. If democracy is good, it seems reasonable then that more democracy is better, and a way to achieve that is for people have the freedom to exercise more choices.

ICT gives us the means to implement an improved version of democracy by increasing our ability to express our preferences over a wider set of choices and drive policy more efficiently. This is, if you would pardon the construct, Democracy 2.0 as opposed to the previous version that we are still using. If Democracy 1.0 was an improvement on dictatorship, totalitarianism, feudalism, aristocracy, or whatever, then Democracy 2.0 is an improvement on the version 1.0.

Democracy 2.0

I will only give an operational definition of Democracy 2.0. Let’s start with an analogy. We know what Media 2.0 is and understand how it differs from Media 1.0. Blog posts are M 2.0 while newspaper columns are M 1.0; newspapers are M 1.0, whereas news aggregators are M 2.0; radio stations are M 1.0, while podcasts are M 2.0. The essential distinction is the choice you have and the freedom you have in exercising those choices. You decide what you want to read, watch or hear. More importantly, you decide if you wish to add your own two bits to the ever expanding choice set by writing on blogs, podcasting or YouTube-ing. You not only decide what but how much you consume and produce. You are the king and you through your choices determine what happens. M 2.0 is brought to you by the power of the web and the internet, the same two things that have the power to bring you D 2.0.

So let’s examine a hypothetical example of what D 2.0 could make possible. Under D 1.0, the prime minister decides that University of Cambridge would be given £3.2 million for the “Jawaharlal Nehru Professorship of Indian Business and Enterprise.” He, presumably under instructions from his boss, made that decision. It was not his own money, neither was it from his boss’s considerable fortunes – it was the money from average taxpayers like you and me. He transferred funds to a rich foreign university with money that was not given freely by me and, I presume, you. I had no choice in the matter even though part of that money was mine. The money he gifted away to Cambridge could have been used to fund the entire education of tens of thousands of poor Indians and given them a fair shot at a decent existence.

Under D 2.0, here’s how it would work. The government sets up a website for the specific purpose of funding a chair at University Cambridge, and publicises it. Then I – like millions of others – decide how much I am willing to contribute to it. It is my money and I choose how much of it I want to give away to UCambridge, not the prime minister or his boss. The technology is there for directly expressing my choice on this matter, which we must remember is a discretionary matter.

Routine Abuse

Unfortunately the government routinely spends taxpayers’ money on discretionary matters. I suppose most of us would agree that the state has no business in meddling with religious matters. The Indian government does. It, for example, provides a subsidy for Muslims to go on haj. Haj is a matter between Muslims and their maker, and the government of India has no cause to interfere in it. I believe that the haj subsidy should be abolished.

Or more specifically, the government funding of haj must be abolished. If I feel like subsidizing the haj, I can bloody well send in a check to a fund specifically created for sending people to Saudi Arabia. Better yet, I can do it from the comfort of my home by filling in a form with my credit card information on a “Haj Subsidy Website.” My involuntary contributions to haj through the coercion implicit in the taxes the government imposes on me is merely disguised jaziya, a tax that non-Muslims pay to their Muslim overlords. This is immoral, unethical, regressive and economically inefficient.

Here’s one more example: the funding of terrorism in foreign nations. See this post on funding Pakistani jihadis. In a follow up post in June last year, I had proposed a disintermediation mechanism:

. . . the government of India should bypass the government of Pakistan and the ISI and directly send the funds to the terrorists.

But then another thought occurred to me. The money eventually comes from Indian taxpayers. The chain is Tax-payers to Govt of India to Govt of Pakistan to the ISI to the terrorists. Why not just have a bank account for the terrorists in some Indian bank into which all of us taxpayers can simply deposit part of our earnings, and from which the terrorists could withdraw what they need at will?

Seriously, though, we have to make some systemic changes. ICT reduces transaction costs. In the past, there was no inexpensive way to ask people to contribute directly to various discretionary causes and no way to cheaply aggregate their contributions. Now all you need is internet access and a credit card or bank account.

Will it Happen

In the next part on this, I will explore whether the power of ICT to release Democracy 2.0 will be used or not. Any structural change necessarily changes the power structure and that means that there will be gainer and losers. If the required change threatens the power of the powerful in the existing order, they will block the change if it is within their power to do so. Let’s explore that next.

Update: Thanks to reader Ramakrishna Upadrasta for pointing out that the links were not working. I have fixed them.

I had received an email saying that Prof Negroponte would like to meet with me after the presentation. Negroponte, as most people know, is the founder and chairman of the OLPC project and a co-founder of the MIT Media Lab. The announcement said, “Professor Nicholas Negroponte will discuss the MIT-Media Labs developed XO-laptop which is widely seen as revolutionizing primary education around the world…”

The OLPC’s XO is going to be much in the news. BusinessWeek’s Nandini Lakshman called me on Saturday to chat about the impending launch of OLPC India. She was going to accompany the OLPC team to Khairat, a village close to Mumbai where the XO is being premiered. You can read the details of that project in Nandini’s report in Businessweek: One Laptop Per Child Lands in India.

The presentation by Negroponte was predictable. I had been to one earlier in June last year in Addis Ababa. He speaks of the XO with the conviction, passion and pride of a parent for his favorite child. Outside in the lobby were a couple of XOs, the cute little green machine. First time I handled one and I think it deserves all the praise it gets for its design.

At the too brief question/answer session, I got the chance to point out that “we should keep in mind that India spends, on average, around $5 per student per month, compared to the US which spends around $1,200 per student per month. Even if the per month cost of the laptop is of the order of $10 per student, it represents multiples of the current spending in India.”

I have been following the OLPC story for a while on this blog. I think that technology — especially information and communications technology — presents tools that are going to transform how education is done and what it achieves. It will really be appropriate to call it a revolution and it is just a matter of “when”, not “if.” Tools transform; they change processes, and eventually they change the product. The process of education which has essentially remained unchanged for at least a hundred years is ripe for change, whether or not the current bosses of the system are willing or not.

But I don’t think that the XO is the answer to any of the basic problems that Indian education system faces. Some people just don’t get it: that something can be quite useful and good, and at the same time inappropriate for a given situation.

I have no reason to doubt the glowing reviews that the XO has received. I have no difficulty believing that all else being equal, a child with an XO is better off than one without one. All else being equal, a person with a BMW is better off than a person without a BMW.

Negroponte speaks very eloquently about how children gifted an XO get terribly excited about going to school and learning. So would I. So would the child get excited about going to school if he gets the promise of a much-need mid-day meal. Incentives matter.

But eventually we have to face the fact that if children are not excited about going to school and have to be enticed by promises of goodies, then we have a problem whose genesis lies deep within the system and superficially dealing with the symptoms are bound to be in vain.

Anyway, these people are not doing arithmetic. I am not opposed to the XO. I did the arithmetic and the results indicate that India is too poor to afford the XO. I fail to understand which part of this argument the OLPC people don’t get.

Let me conclude with a story that I found heartbreaking and much as I would like to forget that I read it, I cannot. And pardon me for relaying this unhappy story.

It was in one of the local Mumbai newspapers. I think it was in the Mid-Day about 10 days ago. It said that a security guard had noticed a 12-year old boy hanging about the school gate for a couple of days. He alerted some social workers. They questioned him. He said that he wanted to go to school, and so he was waiting at the gate. They found out that his relatives had brought him to Mumbai from some other town and abandoned him.

He gave them the particulars of his home address and names of his relatives. The social workers decided to get in touch with his relatives but the boy said that they will not want him back, and that anyway he wanted to go to school. The newspaper report then says that somehow the boy gave the social workers a slip and they had no idea where he went.

Imagine yourself at 12 years of age. You see kids your age going to school wearing nice clothes, being cared for by parents, having friends — and you yourself are abandoned in a city and you desperately wish to go to school. I imagined that and it broke my heart.

How could the social workers be so incompetent that they lost the kid? If they had only put him up for a few days and in the newspaper report included contact details, I would have been happy to pay for that kid’s schooling and all other costs. I could easily spare the few thousand rupees it would cost every month. I was furious with the reporter for not doing a better job of recording the social organization which mishandled the case.

I can easily imagine that many other readers of that story would also have stepped forward to help the boy.

Anyway, that story once again underlined a few hard facts to me. Yes, I could help that one boy. But there are tens of millions like him who would love have a decent shot at life. Not only I am too poor to help them all, even our society is too impoverished to help its children. The children have no rights at all. The society mindlessly produces children that it does not have the resources to care for.

In Delhi I saw huge bill-boards that said, “India values its children.” I think they were paid for by the government of Delhi, or maybe by some consumer goods company. The disconnect between the claim and the reality could not have been more jarring.

Heartlessly the society just produces more children without a thought to producing the stuff that these children need — food, shelter, education, and a thousand other things. The government sees these as vote banks — they will grow up to be illiterate and poor and their votes will be bought for a few rupees worth of bribes, or the promise of some reservation or the other. Then these poor will in turn produce more children. The cycle continues. And the writers write opinion pieces on the demographic dividend and the peddlers of laptops say buy millions of our laptops and you will have a great educational system.

Yeah right.

Everything reminds me of India’s failed education system — and by extension — the stupidity of the government policymakers, bureaucrats and politicians included. Unlike Bob Solow, however, I cannot keep it out of my posts.

Consider the news item that India is developing a $10 laptop.

NEW DELHI: After displaying its prowess in developing the world’s cheapest car, India is on track to roll out the world’s cheapest laptop computer that could cost as low as $10, a top official said.

Minister of State for Human Resource Development D Purandeswari said research was being conducted to develop the laptop, especially for use by students, which will cost all of $10.

“Research in this direction is being already carried out at the Indian Institute of Science, Bangalore and the Indian Institute of Technology (IIT), Madras,” she told the e-India annual summit on information and communication technologies.

I wonder how anyone can sit and listen to such unadulterated crap — even if they are participants at an “e-India” summit. And the reporter — doesn’t one have to have the IQ of a cretin to report this without comment about the absurdity of the claim that there can be such a thing as a $10 laptop?

Like I keep saying, the Indian education system is really, truly, badly, irreparably broken. What else can one conclude from the expressed stupidity of a minister of state, a whole bunch of presumably educated people at a conference, a newspaper reporter and various editors, and hundreds of thousands of readers who let the stupidity go unquestioned?

So in the interests of sanity and public service, I will explain why the minister’s claim is idiotic. There is such a thing called the cost of making something. The price at which something is sold has a relationship to the cost of manufacture in the sense that the price is at least as much as the total cost of manufacturing (absent any subsidies.)

Now there is a general rule about the cost of a thing which should be known by every adult who is not, how shall I put it, mentally challenged. The heavier the thing, the more it costs to make. Simple but not fully appreciated by those who are mentally deficient. This is a general rule. A Volvo bus costs more to make than a Volvo car. A motorbike costs more to make than a bicycle. More weight, more costly: Tata Nano, Maurti 800, Honda Civic, Honda Accord, BMW 7series.

Basically, the floor of the minimum cost is dictated by the per kilo cost of the material that the thing is made of.

So what is the minimum cost of a car? Well, if 500 kilos of steel, plastics, and other stuff go into it, and if the minimum per kilo cost is say Rs 100, then you cannot produce a car for less than Rs 50,000. That a 500 kg car can cost a lot more than the minimum to make, or that it can be sold at a price that is multiple times more than its cost, is besides the point. What we are doing here is figuring out that there is a lower limit to the cost of anything.

Now suppose a laptop weighs 3 kilos. If anyone claims that it can be produced at a cost of say $10 (or Rs 400), then the claim is that the material costs are just over $3 a kilo. That is patently absurd. In fact, the more sophisticated a device is, its per kilo price goes up, not down. Its capacity may go up but the basic per kilo price does not go down but up.

What this means is that a one-kilo laptop with the same functionality and features as that of a three-kilo laptop will cost more. That means that per kilo, the lighter laptop will at least three times as costly as the heavier laptop.

So here’s the bottom line. An affordable laptop will be heavier than sophisticated but lighter laptop. And the heavier laptop cannot cost less than the per kilo production cost of the stuff that it is made up of. A laptop at $10 is an impossibility in any known reality. Sure you could have a $10 cell phone — you could have a 100 gram phone. But you cannot have a 100 gram laptop.

Back to our Minister of State and her pronouncements. I don’t suppose anyone will ever hold her to her statement. No one will call bullshit on her claims. And I suppose her IQ is matched by that of the media. So she need not worry that the media are going to challenger her.

Like I said, our educational system sucks.

But a bit of thinking brought me to the (apparently contradictory) conclusion that laptops in the school learning environment is detrimental to learning. I love the idea of using technology in schools but totally distrust the idea of one-on-one laptop use in schools. In 2006 I wrote, “It is predictable that in the near future, good schools around the world will prohibit school students the use of laptops while in class, just as students are not allowed cell phones.”

I arrived at that position by considering my own educational experience and how I behave. I realize that it is risky to generalize broadly based on one’s personal experience but there you have it. I wrote this nearly two years ago in the context of my own years in school:

Question: would we have become better educated if we had access to laptops and the internet? Arguably yes. At least some of us would have had a richer educational experience. Strictly speaking for myself, I would have probably flunked. I would have surfed the web for god alone knows what, I would have played computer games (I once spent an entire year playing Solitaire on my laptop), I would have wasted all my time socializing on the web. In short, I am grateful that I got access to the internet only after my basic education was complete. Even now, as a grown up and presumed responsible person, I find that my work suffers when I start surfing the web. I am sure that if my internet privileges are not restricted, I will probably never finish the work I am supposed to do and I fear that I will get fired.

What brings this topic of laptops in schools in mind is a recent Slate (June 5th) article “The $100 Distraction Device: Why giving poor kids laptops doesn’t improve their scholastic performance.” (Thanks to all who emailed me the link.)

The article reports the research findings of two economists into the question of whether computers and access to the web actually help school kids. Their finding: “For many kids, computers are indeed more of a distraction than a learning opportunity. . . that merely providing access may be more of a curse than a blessing . . . just giving kids computers? Might as well just ship them PlayStations.”

Some schools are wising up and taking away the laptops from kids in school. In May 2007, an article in the NY Times, “Seeing No Progress, Some Schools Drop Laptops” reports:

LIVERPOOL, N.Y. — The students at Liverpool High have used their school-issued laptops to exchange answers on tests, download pornography and hack into local businesses. When the school tightened its network security, a 10th grader not only found a way around it but also posted step-by-step instructions on the Web for others to follow (which they did).

. . . Scores of the leased laptops break down each month, and every other morning, when the entire school has study hall, the network inevitably freezes because of the sheer number of students roaming the Internet instead of getting help from teachers.

So the Liverpool Central School District, just outside Syracuse, has decided to phase out laptops starting this fall, joining a handful of other schools around the country that adopted one-to-one computing programs and are now abandoning them as educationally empty — and worse.

. . . school officials here and in several other places said laptops had been abused by students, did not fit into lesson plans, and showed little, if any, measurable effect on grades and test scores at a time of increased pressure to meet state standards. Districts have dropped laptop programs after resistance from teachers, logistical and technical problems, and escalating maintenance costs.

I will not quote any more from the article but there are lots of lessons reported in that piece and I think that Indian education policymakers have to learn from the experiences of others — others who have tried technology and learnt from costly lessons.

The State of the OLPC Universe

So what’s new in the OLPC world? Two articles by Steve Lohr from the last month in the NY Times bring us up to speed. Steve’s first article, “Microsoft Joins Effort for Laptops for Children” (May 16th, 2008) reported that finally talks between Negroponte and Gates resulted in the decision to release the OLPC laptop with a Windows XP option sometime this month in some countries.

The OLPC’s dalliance with Microsoft apparently led Walter Bender — who oversaw software development — to resign. Steve’s second article, “Why Walter Bender Left One Laptop Per Child” (May 27th, 2008) says,

Walter Bender, a longtime collaborator of Nicholas Negroponte, the founder of the nonprofit laptop group, left O.L.P.C. in April. Mr. Bender oversaw software development for the project. His departure had been the subject of blog posts that suggested his exit was because a pact with Microsoft was in the works.

Negroponte said Bender’s departure was “a huge loss to OLPC” but also claimed “that some people, including Walter, became much too fundamental about open source.”

Oh that must have hurt! Calling people “fundamentalists” is not good these days. Bender’s response:

“Microsoft stepping in is the symptom, not the disease,” he said in the interview. The issue, in his view, is whether the tools that bring computing to children are “agnostic on learning” or “take a position on learning.”

“O.L.P.C. has become implicitly agnostic about learning,” he said. The project’s focus, he said, is on bringing low-cost laptop computers to children around the world. “It’s a great goal, but it’s not my goal,” he said.

So what’s Bender up to? He’s a founder of Sugar Labs. Here’s more from Steve:

The Sugar software, which provides the user interface for O.L.P.C. laptops, is the means toward the end of a “constructionist learning model,” said Mr. Bender. It’s an approach that builds on the conceptual work of Jean Piaget, the Swiss philosopher and developmental theorist, and the practical research of his intellectual descendants like Seymour Papert, the M.I.T. computer scientist, educator and inventor of the Logo programming language, designed for education.

The constructionist model, put simply, says people learn best by building things — solving problems by “constructing” answers as active agents — instead of by being passive recipients of facts and received knowledge.

Computing is potentially an ideal tool for constructionist education because a computer is a universal machine and software is a building material without material constraints. (In fairness, Mr. Negroponte, founder of the M.I.T. Media Lab, has also been a champion of the constructionist education agenda over the years.)

Mr. Bender says he thinks the collaborative, interactive learning environment embodied by Sugar could be “a game changer in how technology and education collide.” He says he wants to see the Sugar software run on many different kinds of hardware and software platforms, even on Windows, if the Sugar experience is not sacrificed.

“It’s not about Microsoft being evil,” Mr. Bender said. “It’s about optimizing the chance of having a positive impact on education, and that is what Sugar is about. And that mission would be endangered by being too tightly coupled to one hardware vendor, O.L.P.C.”

So the OLPC is now a hardware vendor and the goal is to sell laptops. In a very candid (and long piece) cleverly titled “Sic Transit Gloria Laptopi” on his blog on May 18th, Ivan Krstić, formerly director of security architecture at the OLPC, tells you everything you ever wanted to know about the OLPC but never dared to ask. For instance, he writes that he quit “when Nicholas told me — and not just me — that learning was never part of the mission.”

If you have any interest in the OLPC and what intrigues have occurred and are going on, you must read Ivan’s article. It presents a comprehensive account of the genesis of the OLPC project.

There is one point that Ivan makes that particularly resonated with me. Many proponents of laptops for children claim that children futzing around with software will help them learn. Perhaps it will help them learn how to fix and write software. But learning is not only about fixing open-source software, or making fancy multimedia presentations and videos. For every child who gets excited about fixing software and learns, there are scores of others who would be better off concentrating on learning other subjects instead of having to waste time dealing with hard to use software and hardware.

Here’s a nice quote from him:

My theory is that technical people, especially when younger, get a particular thrill out of dicking around with their software. Much like case modders, these folks see it as a badge of honor that they spent countless hours compiling and configuring their software to oblivion. Hey, I was there too. And the older I get, the more I want things to work out of the box. Ubuntu is getting better at delivering that experience for novice users. Serious power users seem to find that OS X is unrivaled at it.

Anyway, this post is getting too damn long and I will end it with the concluding paras from Ivan’s post (for the record.)

I’m trying to convince Walter not to start a Sugar Foundation, but an Open Learning Foundation. For those who still care about learning in this whole clusterfuck of conflicting agendas, the charge should be to start that organization, since OLPC doesn’t want to be it. Having a company that is device-agnostic and focuses entirely on the learning ecosystem, from deployment to content to Sugar, is not only what I think is sorely needed to really take the one-to-one computer efforts to the next level, but also an approach that has a good chance of making the organization doing the work self-sustaining at some point.

So here’s to open learning, to free software, to strength of personal conviction, and to having enough damn humility to remember that the goal is bringing learning to a billion children across the globe. The billion waiting for us to put our idiotic trifles aside, end our endless yapping, and get to it already.

Let’s get to it already.

Poverty is a big word. It is multi-dimensional. It is complex in its causes, it is hugely complex in its implications, and it is perhaps the most intractable of all social challenges that humanity faces. Poverty has been the characteristic condition of humanity since its birth. It is not the existence of poverty that should surprise us but rather that some significant portion of humanity in the relatively recent history (about 100 years or so) are not living in poverty. Though it is not as inescapable as death, poverty has been much of human history’s most common condition. Ending poverty on a global scale will require a combination of technical ingenuity, enlightened political leadership, compassionate societies, and such on a global scale. Just technology alone cannot solve any problem as enduring and non-technical as the complex problem of global poverty.

You know that Monty Python skit involving a dead parrot. The character that John Cleese plays comes to the pet shop to return a parrot which he had “purchased not half an hour from this very boutique.” The problem was that the parrot was dead. The shopkeeper insists that the parrot — a Norwegian blue — is not dead. It is, he variously claims, merely resting; pining for the fjords; that it prefers to kick back. John’s character is frustrated and finally explodes:

“It’s not pining, it’s passed on. This parrot is no more. It has ceased to be. It’s expired and gone to meet its maker. This is a late parrot. It’s a stiff. Bereft of life, it rests in peace. If you hadn’t nailed it to the perch, it would be pushing up the daisies. It’s rung down the curtain and joined the bleedin’ choir invisible.

Viz-a-viz the metabolic processes, he’s had his lot. All statements to the effect that this parrot is still a going concern are from now on inoperative. This is an ex-parrot.”

I feel a bit like that guy. I repeatedly keep insisting that technology is not the answer to all of the world’s problems. Technology helps only on those aspects of a problem that are technical in nature. So here’s yet another of my attempts at explaining why I think technology cannot solve the problem of global poverty.

In its most general formulation, problems involve constraints and their solutions involve choices within those constraints. If there were no constraints in a system, there would be no problems. To the extent that any particular problem has a solution at all, the solution involves making choices. Good solutions are the consequence of correct choices. Technology often relaxes some constraints to some degree, and thus expands the choices available. This expansion of choices is good but it is not costlessly so: greater choice implies a greater burden in making the correct choices. In other words, when the choice set expands, the chances of making the wrong choices also goes up.

Specifically in the case of mobile phones, we can immediately note the constraints that it relaxes. It essentially makes long distance communication of information possible. But then so do carrier pigeons, smoke signals, semaphores, the telegraph, the pony express, and land line phones. Mobile phones have an advantage over those earlier technologies because it is better, cheaper, faster, more accessible. So the second constraint the mobile phone pushes back is financial. For a given amount of money, you get more capacity. Third, the technology is transferable and is easily adopted. You don’t need to be literate, and you don’t need expensive terminal equipment.

What economic function does the mobile phone serve? It reduces transaction costs, to put it in economics terms. When you use the phone to ask for directions perhaps, you save time that you would have otherwise wasted in going round in circles. When you call ahead to fix up a meeting, you avoid a wasted trip if the person is not available. Telecommunications is a substitute for transportation in many instances.

By reducing transaction costs, the efficiency of the process goes up. That is, increased productivity and therefore more production for the same effort. More production, in turn, means more stuff. More stuff for a given population means more stuff per person. Stuff, as you all know, is what it is all about. If a person has too little stuff, he is poor. To the extent that global poverty can be helped through increased production of stuff, and to the extent that more efficient communications helps in production, only to that limited extent can cell phones affect global poverty.

Technology is an amplifying mechanism. Another way of saying that is that technology enters the production function multiplicatively. You have to have something to amplify to be able to use an amplifier. If there is no signal, no matter how powerful the amplifier, there will be no output. The productive capacity is multiplied by technology but where there is any production going on and what is being produced is a consequence of choices that were made outside of technology. That is the bigger challenge because the ability to make the correct choices is something that cannot be as easily imported as the importing of technology.

In the end, affluence — which I define here as the absence of poverty — is a consequence of correct choices made deliberately and consciously over the long term. Affluence is the result of economic policies made by thoughtful and wise policymakers. The existence and the necessity of such people is independent of the level and sophistication of the available technology. To solve our problem of poverty, technology is definitely necessary but it is far from sufficient.

Related links:

(1) Stuff and Ideas.

(2) The Importance of Producing Stuff.

(3) The Tathagata’s Sermon on Economics.

As it is tempting to be seduced by the power of technology, it is good to be mindful of a few caveats. First, the nature of the solution must be dictated by the nature of the problem. While a technical solution is appropriate to a technical problem, it would be wholly inadmissible for, say, a sociological or a psychological problem. Quite frequently, technologists advocate technical solutions to non-technical problems. It illustrates the old adage that to a man with a hammer, every problem looks like a nail.

Second, the production of advanced technology usually occurs in a certain context. It co-evolves with the society that creates it. It is not always possible to transplant technology without paying attention to the ecology of the place. The technology has to be supported by human capital and appropriate physical infrastructure usually transparent to the user. Successful adoption of technology is predicated on the preparedness of the adopting population and place.

In the context of the development of India and other developing economies, ICT holds a special fascination with policymakers and global hardware and software giants. Lavishly sponsored by the peddlers of ICT and heavily attended by government officials and NGOs, the narrative is that there is a “digital divide” and bridging it is not only necessary, but perhaps is sufficient for development. One cannot dispute the existence of a digital divide any more than one can dispute the existence of all sorts of other divides — ranging from the “basic food and clean water divide” to what I call the “BMW divide”. What matter are the prioritization and sequencing of the divides to be bridged.

Let me recount what happened to me the other day. I was staying at the guesthouse of a major multinational in New Delhi. The fully appointed guesthouse had a room for Internet access. As the young Nepali housekeeper had a lot of time on his hands and he had access to several connected PCs, I offered to teach him how to access the World Wide Web. I would do my bit towards bridging the digital divide for the day.

With great enthusiasm, I was demonstrating the wonder of the Web when he muttered that he did not know how to read and write. Aside from noting down phone numbers and knowing the alphabet, he was illiterate. Crossing the basic literacy divide is a prerequisite for crossing many other divides, including the digital divide. That episode underlines the basic nature of technology: it is an amplifying mechanism. There has to be a basic capacity first. Only then can technology be brought to multiply capability.

Technology holds the promise of allowing short cuts. The classic example is the adoption of cellular telephony and leapfrogging the costly landline stage of a telecommunications infrastructure. In less than 25 years, well within a human generation, half of humanity — more than three billion people — adopted that technology. The same cannot be said about the personal computer (PC) and the Internet. Aside from the fact that PCs and Internet connectivity are significantly more expensive to own and use than a cellphone, there is the matter of having the capacity to use it. Leapfrogging technology is possible, but there is no way of leapfrogging human capacity requirements.

Widespread use of technology is mandatory for any economy to develop in the 21st century. India has a number of positives in this regard. First, it is a latecomer and, therefore, has the benefit of leapfrogging in some instances. Second, technological tools are increasingly becoming cheaper, thanks in part to Moore’s Law. The cellphone of today packs the same power of the PC of just a decade ago. Third, information is becoming cheap. This has profound implications for one of India’s great problems, that of educating hundreds of millions.

The negatives that relate to technology and development of India do give some cause for worry. First, the missing deep backend has to be created rapidly. Cheap, reliable, good quality electricity must be available. So also sufficient human capital for supporting the use of technology has to be available. Fortunately, technology itself can help with the human capital formation. Second, entrepreneurial activity is what drives the maximum gain from the use of technology. Bureaucratic control of economic activity is inimical to this.

India’s development can be accelerated by the use of technology, as though by magic. But magic cannot be done without appropriate props. In the case of India, the major props are the understanding of the power of technology among its leaders and the politi-cal will and vision to let magic happen.

The world has come a long way since the 1960s when the future was defined by one word – “plastics” – as Mr McGuire advised the young graduate Ben. Now the future is defined by another word and the word is “information.” Plastics was a wonder product of the world of industrial technology which fundamentally transformed the world of objects. Information is the new thing, the product of information technology, which is going to transform the world of ideas. Actually, information is not a “thing” in the usual sense of the term. So it is the new non-thing which defines the new and exciting future.

Let me enumerate some fun facts about information. First, people produce information. So now that more people are producing information, a lot of information gets produced. Second, information accumulates. Once produced, unless every copy disappears, it persists. Third, it is a “public good.” One person’s use of a particular bit of information does not preclude another person from using the same information. Fourth, when information is “internalized” it becomes knowledge in a human brain. So the monotonically increasing stock of information raises the potential of acquiring knowledge by other humans. Processing information is one of the necessary steps in the acquisition of knowledge. Knowledge in turn is a necessary ingredient in the process of generating ideas. Ideas eventually fuel the engine that drives human civilization.

So this note is about information, knowledge, ideas, human civilization, and the rest of it. A pretty large subject which I will necessarily deal with fairly superficially given my own limitations. First I will explore the subject from a micro perspective and then move to the macro. The objective is to draw some plausible conclusions about where we as a collective of humans are headed.

Rejecting Information

The object of analysis at the micro level is the individual human. At the bare minimum, a human has to have a brain and a set of sense organs for acquiring information. Mostly it is through hearing and seeing that one receives input information – touch, smell and taste are not as important in the modern world as it would have been in our pre-literate past. Only if one is blind, or cannot read and is unable to comprehend language, do touch, smell and taste predominate – with the possible exception of tasters, noses, lovers and toddlers. Observe a toddler and note how he or she acquires information.

Physiologically the sense organs take in a huge amount of information that gets filtered and most of it is rejected. For example, from the total visual input from the eyes only a tiny fraction of the information gets processed by and stored in the brain. What we perceive is much smaller than what we see. Our brains would be overloaded if it were to process every bit of information that is presented to it. The different kinds of living organisms filter out different bits of information from the environment. Who you are determines what you perceive.

Biological versus the Artificial

A person acquires information from the environment and also the ever-increasing stock of created information. At this point it is useful to distinguish between what we can call the biological (or natural) environment and the cultural (or artificial) environment. The natural environment is that world which our species evolved in over evolutionary time scales. Our sense organs and our brains are in a strict sense biologically fit to deal with the natural world. The ability to deal with the information from the natural environment is hard-coded within us. We don’t have to go to school to learn how to process the information.

The artificial environment is created by human action. The information from it comes in terms of language and words. We have to go to school to learn, so to speak, how to process that information. An artist and a neurologist could see the same brain scan images but perceive it entirely differently because their training is different. The neurologist has over the years taken in a lot of information about brains and internalized it into knowledge. That knowledge allows the neurologist to process the information of the brain scan differently and thus acquire additional knowledge. The artist also acquires additional knowledge from the brain scans but that knowledge is different from that of the neurologist.

Sequencing

The point is that what you know already determines what you are additionally capable of knowing. There is a path dependency in the knowledge sphere that is tied to the sequence in which information was presented. Though the information available may be comprehensive (in the sense that it is complete), if the sequence of presentation of that information is out of order, it will not be comprehended. Graduate level physics information has to be presented after the undergraduate level physics has been internalized for it to make sense.

Knowledge accumulates in a human brain to the extent it is presented information in the correct sequence. It is not even theoretically possible for an external agency to determine what the correct sequence for a particular individual is. It is so because an external agent cannot fully know what the knowledge base of an individual is at a specific time. The solution is therefore to let the individual himself or herself pick out the next bit of information to internalize from a reasonably broad set of information.

Teaching versus Learning

This is where we need to distinguish between teaching and learning. Traditionally “teaching” is when an external agent presents information and expects the individual to internalize it into knowledge. “Learning” is when the individual picks up the next bit of information from the available collection. Learning can never be out of sequence. Teaching often fails in its attempt to impart knowledge because it is not even theoretically possible for an external agent to fully comprehend the internal knowledge state of the student and therefore competently present the information in the right sequence.

Summing up the points so far: information is the basis for knowledge in the brain; knowledge accumulates by internalizing information in the correct sequence.

Infinite Ignorance

The totality of information available to humans is enormous. Let’s call that “public information.” From that collection, each human being internalizes whatever little bit it is able to. That is “private information” leading to “private knowledge.” Since there are around 6 billion brains in the world, each brain has unique private knowledge but derived from the same public information. The larger the population, the greater is the stock of public information. But given the limitations of the human brain, progressively any human’s private information shrinks relative to the public information. In other words, a person becomes more ignorant relative to what is potentially knowable. All of us are privately ignorant in a world awash in information. Some time ago – perhaps as recently as a few hundred years ago – a person could potentially know a reasonable fraction of the available public information. Today that percentage would be approximately zero.

A world of infinite information is also necessarily a world of infinite individual ignorance.

This poses enormous challenges for the individual as well as humanity as a whole. As individuals, we have to accept that we cannot know everything that we potentially know. A trivial example. A few decades ago, you could have enjoyed watching within the year every movie made anywhere in the world that year. The trouble would have been that you would have had to be fabulously rich to go see them. You had the time but accessing the movies would have been costly. Today, it is fairly trivial to have access to all movies produced. But you just don’t have the time to watch even the good ones produced in just one year. World enough but time.

The Challenges and Opportunities

The challenge for the individual is how to choose which bits of the public information to consume and in which sequence. We are biologically equipped to filter out the massive amount of information coming at us from the natural world. We are not equipped to naturally filter out the currently massive amount of information coming at us from the artificial world. An individual’s success in doing so determines how successful one is in this artificial world. One of the primary jobs of the education system we need is to give us that skill. We did not need that ability and therefore our current educational system which was created for a different environment is totally ill-equipped to handle this task.

That brings us to the macro level. Any organization which does the filtering of the public information for individual use is going to be phenomenally successful. The largest corporations will be those that deal with information in the future. One can be accused of Monday morning quarterbacking for saying that. You could point to information technology giants of today and say that the lessons are plainly evident. But I don’t think that we have fully understood what the real lesson is. The point isn’t making a lot of information available to the individual. The point rather is that any institution that most efficiently and effectively reduces the information available to an individual will succeed.

General Purpose Machines

The other lesson pertains to education. The old paradigm was one-size-fits-all because only one size was available. It was an older, simpler, static world where you could learn a small set of skills and hoped to cope with the world for the rest of your life. The dynamic world of today requires constant learning and the acquisition of new skills. A useful analogy would be the distinction between a special purpose machine and a general purpose machine. A typewriter is a special purpose machine while a computer is a general purpose machine. Depending on what software you load, a computer can do a range of things – from guiding spaceships to controlling your microwave oven. People have to become the equivalent of general purpose machines. People must become capable of “loading the appropriate software” to handle any task they want done.

The education system of today churns out special purpose machines. To make it produce general purpose machines requires a few basic changes. First, it has to teach a set of very basic skills so well that everyone is literate and numerate. That is equivalent to designing a machine which has a complete set of machine instructions which it executes very efficiently and all the other tasks are just the execution of a long sequence of these basic operations. Once you know how to competently read, write, do arithmetic, and reason logically, you can pretty much learn how to do pretty much anything that the human mind is capable of.

That bit is the “teaching” bit of the educational system. Nothing else needs to be taught. The rest is entirely dependent on what the individual is interested in and capable of learning. Here the job of the educational system is to make accessible to the student a comprehensive information set – and NOT the entire public information – for the student to pick from, and in the sequence that he or she feels naturally inclined to, and internalize it. By allowing the student freedom to choose what he or she wants to internalize, it releases the information constraint (that is, the problem of knowing what the student knows) which otherwise is impossible to circumvent.

Development

The age of agriculture yielded to the age of industrialization. Agriculture did not go away. It just became sufficiently productive that it released labor that was absorbed in producing non-agricultural goods and services. The percentage share of agriculture declined – not the absolute amount of agricultural production. Wealth, standard of living, or whatever you call it increased in pace with the decline in direct employment in agriculture.

The industrial age is giving birth to the information age. Once again, it is not that the amount of goods produced by the industrial sector is itself declining. It is not. Indeed, it is increasing. But that increase is due primarily to an increase in productivity and hence it releases labor to the rising sector – the information sector. As the labor force increases in the information sector, the production and subsequent consumption of information is bound to increase.

In the agricultural age, those parts of the world which were the most productive agriculturally prospered. It largely depended on the endowment of natural resources and a bit of human capital. It was a simple world and the social order was commensurately simple. Not much investment in terms of human capital was required. Education was largely an informal affair.

In the industrial age, prosperity depended on industrial productivity, which in turn depended on a reasonably educated work force. Education had to be formalized and the requirements could be met with standardized schools. The public information was limited but sufficient to meet the needs of the industrial worker.

In the information age, prosperity depends on how efficiently the people can produce and consume information. It is critically dependent on a very highly educated labor force. Needless to say that agriculture and industries will continue to need labor as well and that that labor would not need to be highly educated. Conversely, if a population is very minimally educated, then it can only be engaged in agriculture; if the population is moderately educated, it can move up to manufacturing.

So at the highest level of abstraction we can reasonably say this. Prosperity in the world to come depends on how highly educated the population is. So those economies that are able to create the most effective and efficient educational system will count. The rest will be forever falling behind.

Most of India lives in the agricultural age because overall our educational system is only able to supply to that. A small part of India lives in the industrial age. That part is increasing but slowly because of the inability of the educational system to provide the human resources required. Less than one percent of India lives in the information age. To a first approximation, the Indian educational system does not create any human resources for the India to live in the information age.

This is a dismal assessment. But there is nothing in the laws of the universe that actually prevents the Indian educational system from creating what is needed for India to prosper. What is lacking is the understanding, the vision, and the will of the people and their leaders.

A high profile contemporary example of an inappropriate technical intervention is the XO laptop promoted by the One Laptop Per Child (OLPC) project headed by the celebrated technologist and former head of MIT Media Lab, Nicholas Negroponte. The grand vision is to assist in the education of children in developing economies by providing each child at government expense with a laptop created especially for that purpose.

The XO is a technological masterpiece of good design and fabrication. It costs around US$200 and has features suitable for use by children. It consumes power frugally, can withstand rough use, and can be used in hot and dusty environments. However, the OLPC promoters claim that it is not a laptop project but rather it is about education. Their goal is to bridge the digital divide so that children in poorer parts of the world can also have access to the digital educational resources through the Internet.

The poor of the world are on the wrong side of many divides, not just the digital divide. There are numerous other divides —nutrition, health-care, basic education, infant mortality, even safe drinking water. All these divides are rooted in the greater underlying divide we can call the income divide. Fixing the income divide involves economics. The most significant flaw of the OLPC is that it ignores basic economics.

The digital divide is real enough but it is not the most pressing problem facing poor people. That it is not even a real hindrance to basic education is evidenced by the fact that 99.99 per cent of humanity has become educated without the use of high technology. Saying that laptops and access to the Internet can potentially assist in educating the poor is akin to claiming that one car per family can help with transportation needs. Of course it can. But technical feasibility does not imply economic feasibility at all.

The economics argument against the XO is about “opportunity costs”. When evaluating alternatives, one has to weigh the benefits of an action, buying cakes for example, against the forgone benefits of other actions, buying bread and butter, which are precluded because of the costs of that action. A full implementation of the XO project for India would involve the purchase of 100 million laptops and would cost around Rs 50,000 crore every year. That is obviously impossible but even if it were possible, the benefits of a laptop for every child have to be weighed against the benefits from spending the same amount in schools, teachers, nutrition and healthcare for those children.

The Indian education system has failed to live up to its mission. School dropout rates by the end of primary education are around 50 per cent and by the XII standard rise to around 90 per cent. The failure is partly due to the low priority given to primary education despite all the high sounding rhetoric of policy makers and the language of the Constitution of India. That is a problem of political economy, not of technology. Thankfully, by some stroke of luck, the Indian government decided against buying into the OLPC project. It is easy to imagine that the XO could have become one more of the goodies distributed by the government to favoured constituencies in exchange for political patronage.

For India to develop, it has to find a way to educate all its children. The current system is severely supply-constrained and therefore is only accessible to those who are well off. The poor are unable to secure a decent basic education because the total governmental control over education ensures low quality and limited supply. Lacking a good basic foundation, the poor are unable to compete for the limited tertiary education opportunities.

Educating its population is arguably the most important task of any society, perhaps second only to the primary needs of food, shelter and clothing. It is a fact that many societies — even some very poor ones — have achieved universal primary education. However, a functioning educational system is not impossible. It is always a matter of political will and collective social consciousness, not a matter of building laptop bridges across digital divides.

It takes little insight to see that laptops would be low on the list of priorities of the developing-country poor. One Laptop per Child makes as much sense as One iPod per Child or One Snowmobile per Child.

He quotes some figures from the world hunger site:

In the Asian, African, and Latin American countries, well over 500 million people are living in what the World Bank has called “absolute poverty.” Every year, 15 million children die of hunger. For the price of one missile, a school full of hungry children could eat lunch every day for five years. Throughout the decade, more than 100 million children will die from illness and starvation. The World Health Organization estimates that one-third of the world is well fed, one-third is underfed, and one-third is starving. Since you’ve entered this site, at least 200 people have died of starvation. One in 12 people worldwide is malnourished, including 160 million children under the age of 5. Nearly one in four people, or 1.3 billion—a majority of humanity—live on less than $1 per day, while the world’s 358 billionaires have assets exceeding the combined annual incomes of countries with 45 percent of the world’s people. Let’s include Negroponte and the Google billionaires.

A bit more from the article:

“Sir, our village has no water!” “Jenkins, get these people some glassware!”

But, wait. Think of how cool it would be! Think of how many families will get to experience the friendly spam-ridden Information Super Ad-way laced with Nigerian scams, hoaxes, porn, blogs, wikis, spam, urban folklore, misinformation, sites selling junk from China, bomb-making instructions, jihad initiatives, communist propaganda, Nazi propaganda, exhortations, movie clips of cats playing the piano, advertising, advertising, and more advertising. Do you now feel better about the world’s problems, knowing that some poor tribesman’s child has a laptop? What African kid doesn’t want access to Slashdot?

Of course, it might be a problem if there is no classroom and he can’t read. The literacy rate in Niger is 13 percent, for example. Hey, give them a computer! And even if someone can read, how many Web sites and wikis are written in SiSwati or isiZulu? Feh. These are just details to ignore.

A Rube Goldberg machine is an extremely complex apparatus that performs a very simple, very easy task in an indirect and convoluted way. The most horrible examples of his machines have an anticipation factor, as the machine makes slow but steady progress toward its goal.

The term also applies as a classification for a generally over-complicated apparatus or piece of software. . . The term “Rube Goldberg machine” first appeared in Webster’s Third New International Dictionary with the definition “accomplishing by extremely complex roundabout means what actually or seemingly could be done simply.”

Rube Goldberg’s inventions are a unique commentary on life’s complexities. They provide a humorous diversion into the absurd that lampoons the wonders of technology. These satires of man’s ingenuity resonate in modern life for those seeking simplicity in the midst of a technology revolution. Goldberg’s machines can also be seen as a physical representation of the pataphysical, carrying a simple idea to a nonsensical, ornamented extreme. His work has inspired many cartoonists.

You cannot do better than that, can you? I am afraid that reality can imitate fantastic absurdities beyond our expectations. Here’s how you notch up the absurdity one additional peg: power the OLPC using belts, levers, cows, and a car alternator. (Hat tip: Shiv Senthilvel.)

“Entrepreneurship creates immense wealth that permeates healthy economies. Entrepreneurship alone has the capacity to create innovations in education that no bureaucrat or centralized planning authority can ever hope to achieve. Yes, central control can control, but it cannot create.

“In an age where each of us is immensely ignorant relative to the sum total of human knowledge, the skills that the individual acquires over a lifetime of learning cannot be imparted by an educational system that was created for a different world. The resources for building that educational system are already there. All that society has to do is keep the state out of it so that private enterprise can do its job—which it invariably does. The role of the state is limited to light-handed regulation.

“Liberalization of the educational system from the political-bureaucratic nexus is absolutely necessary. Without economic freedom, we cannot expect the entrepreneurial innovation required to make the educational system in step with the dramatic changes that the future has in store. It would be profoundly ignorant to not liberalize education.

You know, I have been a great believer in the “One Blackboard per School” idea myself and written about it here. Well, as it happened, Cyrus stopped by my place in Santa Clara yesterday afternoon and we had a brief conversation about OLPC and other matters. Today he has a brief report on BBC’s “The World” program on Public Radio International. Near the end, I explain why the OLPC could increase the digital divide. Listen here.

I keep in mind my own educational experience. I went to a school (same one from grade 1 to 11) and by all standards, had very limited information. I recall that we had fewer than a dozen textbooks for every grade. They were not massive tomes. They were fairly slim. My estimate is that the information that was contained in all those books would easily fit on a single DVD with room to spare.

My point is that it is not the humongous amount of information that is necessary for a quality education. It is sufficient to sit very quietly with a little bit of information and internalize it appropriately. A bit of uninterrupted time, a bit of good information, a bit of sweat and a bit of inquisitiveness helped most of us get educated. It may have been great if we had Macs and Digital Whiteboards and low-orbiting satellites and digital editing suits and quadruphonic surround sound and IPods and iPhones and Facebook and MySpace and YouTube and broadband internet connections. Or maybe not. I know that I would have ended up futzing around on the web and flunking basic arithmetic.

I could be mistaken. Perhaps some genetic mutation has occurred in the intervening years since I went to school and suddenly kids cannot learn unless they are immersed up to their necks in high-tech gizmos. Perhaps they have lost the ability to learn from internalizing a bit of information. Perhaps they have to be simultaneously SMSing their pals, surfing the web, downloading gazillion giga-bytes of information, creating their digital profiles on FaceBook, capturing hi-def video and editing them to actually learn the basics.

I just don’t know.

So there you are: the demands on your attention grows. But the supply of your attention is fairly limited. The price of your attention is naturally going to go up. The question then is whether you can increase your supply of attention, not for the demands of the commercial classes but for your own benefit.

Here’s the good news then. Yes, you can indeed increase the amount of attention that you have. The secret, discovered long ago in the sacred land of India, is meditation. It makes sense considering that India gave yoga to the world. Yoga — yoking of the mundane with the divine — has both mental and physical aspects. Meditation is mental exercise.

Some years ago, I learnt Vipassana[3], or Insight meditation. An American friend of mine, a logger by profession, was (and still is) big time into Vispassana and I took a 10-day course in Fresno, California. It is claimed that the technique goes back 2,500 years all the way to Gautama Buddha. Only now it is being discovered by the hard sciences that Vipassana meditation can actually increase your brain resources–something that was known by the practitioners thousands of years ago. Here’s the abstract of a report from PLoS Biology, a peer-reviewed open-access journal published by the Public Library of Science titled “Mental Training Affects Distribution of Limited Brain Resources” where they studied the efffect of Vipassana meditation. The conclusion was that their “study corroborates the idea that plasticity in brain and mental function exists throughout life, and illustrates the usefulness of systematic mental training in the study of the human mind.”

Here’s the abstract: “Meditation includes the mental training of attention, which involves the selection of goal-relevant information from the array of inputs that bombard our sensory systems. One of the major limitations of the attentional system concerns the ability to process two temporally close, task-relevant stimuli. When the second of two target stimuli is presented within a half second of the first one in a rapid sequence of events, it is often not detected. This so-called “attentional-blink” deficit is thought to result from competition between stimuli for limited attentional resources. We measured the effects of intense meditation on performance and scalp-recorded brain potentials in an attentional-blink task. We found that three months of intensive meditation reduced brain-resource allocation to the first target, enabling practitioners to more often detect the second target with no compromise in their ability to detect the first target. These findings demonstrate that meditative training can improve performance on a novel task that requires the trained attentional abilities.”

I find it astonishing that meditation is not widely taught in schools in India. I suppose that it will be only after American schools have incorporated meditation in their curricula, and after a good 50 years have passed, it will dawn on Macaulay’s children[4] that it is time for Indian children to learn meditation. This intermediate step of meditation first being taught in American schools is necessary because otherwise the so-called “secular” brigade will scream bloody murder saying that Hinduism is being taught in Indian schools. Oh the horror! And Muslims will threaten to not send their children to school if meditation is taught in Indian schools, as happened when some schools tried to incorporate the yoga exercise “Surya namaskar.”

If I ever get to run a school, the first thing I would do is incorporate meditation and yoga.

Links: Newsweek report on “Meditating your way to a better brain.”

The Daily Galaxy article on “Channeling Buddha –New Research Shows Meditation Improves Attention Span.

Notes: [1] “Had we but world enough, and time” is the first line of a metaphysical poem “To his coy mistress” by Andrew Marvell (1621-1678).

[2] Alex Iskold writes, ” It is no secret that we live in an information overload age. The explosion of new types of information online is a double-edged sword. We both enjoy and drown in news, blogs, podcasts, photos, videos and cool MySpace pages. And the problem is only going to get worse, as more and more people discover the new web.”

[3] The Vipassana course I took was taught by the institution headquartered in Igatpuri, a small town close to Mumbai. Shri S.N.Goenka is the founder of this school.

[4] See Subhash Kak’s short piece explaining Macaulay’s Children.

[Graphics from the IEEE article. Permission to reproduce the graphics here requested.]

The OLPC device is a technological marvel in itself. A great deal of innovation and innovative technological thinking has been invested in it. But geeks are not necessarily the most well-equipped to address social engineering challenges especially those encountered in poor developing economies. As owners of hammers are reputed to perceive all problems as nails, technology enthusiasts often miss the non-technical nature of many problems that plague the developing world.

If India had the resources to pay for an OLPC, it would have been wonderful because not only would every child who needed it would have had one, but more importantly it would have meant that India is rich enough to not only provide every child with what is needed for basic education but also to give kids what they truly need to be competitive in the future. But India does not have the US$ 60,000,000,000 (sixty billion dollars) which I estimate it would cost for providing OLPC to 200 million students. Reality is that India does not even have the resources to even fund the most primitive of schools for all–tens of thousands of classrooms don’t even have the money for blackboard and chalk.

I wish OLPC all success and I envy those kids who will get to use them. I am really sorry for the millions of Indian children who would not have a chance to use it.

Postscript: You may also wish to read the supporting article by my friend Ethan Zuckerman titled “Other Roads to Computing for All.” Our very own Rajesh Jain is also driving a computing for all venture: see the Newsweek International cover story on Novatium.

Open source software should compete against non-open source variants. Different hardware, similarly, should compete. The one-size-fits-all approach is flawed because Western academics can’t know the specific needs of two billion users. The African child who desperately wants to be a graphic designer for the African subsidiary of global company might want a computer that can run Adobe software. A child musician might want a computer that can run Sibelius, the music composition software used by famous composers and American and European schools. The one-size-fits-all laptop won’t run these programs.

My opposition to the OLPC is grounded on the fact that it bypasses the market mechanism. It involves the government and its inefficient and corrupt bureaucracies. The problem of the insufficient resources for education in poor economies is compounded by the almost certain misallocation of whatever little there is by going for the OLPC.

Singleton concludes his post with a quote from me:

Moreover, the laptop proposal is simply a very wasteful use of money when there are more important priorities. The Indian Ministry of Education has attacked the laptop as “pedagogically suspect”. India’s Atanu Dey says that in his country:

“Tens of millions of children don’t go to school, and of the many who do, they end up in schools that lack blackboards and in some cases even chalk. Government schools – especially in rural areas – are plagued with teacher absenteeism. The schools lack even the most rudimentary of facilities such as toilets (the lack of which is a major barrier to girl children.)”

So, how long before eBay gets flooded with people flogging the things?

Invariably during discussions on India’s development, technology is thrown around and often the notion that India will leapfrog some barrier or the other surfaces. I find myself disagreeing with many of those propositions. I think much semantic confusion is caused by not having a clear understanding of the terms.

I think it would be worthwhile to define them to some degree. Technology is embodied human ingenuity. In one word–ideas. Some of it is high tech (PCs and mobile phones, etc) and some low tech (how to use water effectively, etc.) Adoption of technology is entirely a matter that is mediated by the market and requires no government intervention. That is, producers and consumers will make the right choice in what to produce and consume. For example, land line phones will not be chosen over mobile phones when the latter are cheaper than the former in undistorted markets. Market forces alone will guarantee “leapfrogging” of technology. This is not quantum mechanics.

Development is harder to define. Volumes can be written about development without repetition. It is distinct from growth, to begin with. Economic growth is a necessary condition but not sufficient for development. Also economic growth is easier to engineer than development.

Technology is instrumental in promoting economic growth. Economic growth fundamentally is about producing more stuff. More stuff can be produced by employing “factors of production” either more intensively or more extensively. Conventionally these are labeled as labor, land, and capital. Extensive means more of the factor, such as using more labor or more land, etc. Intensive means using the factors more efficiently. That means you use the same amount of land or labor or capital but use it more effectively. This requires better ideas. Better ideas is another way of saying better technology.

So, for instance, using the same amount of water but using drip irrigation, you can increase the productivity of water. That is what is meant by the use of technology. Now if you were to go from flooding of fields to drip irrigation, you effectively leapfrog the “spray irrigation” stage. Or if you go from carrier pigeons to cell phones, you leapfrog twisted copper landline stage of phone communications. This leapfrogging is natural and needs no government intervention for the economy achieve.

Technology that deals with the recording, storage, manipulation, transmission, and distribution of information is very advanced these days, thankfully. Information is a critical ingredient in the workings of a modern complex economy. It is important to understand what information is and to distinguish it from knowledge. Information is anything that is “potentially digitizable” as Hal Varian has defined it.

Photos, music, spread sheets, words, graphs, DNA sequences, prices of goods, books, movies — all digitizable and therefore information. Information can be recorded on a variety of media, from stone tablets to magnetic discs to paper. Knowledge however exists only in the brain of a sentient being. It cannot be communicated directly but only through the intermediate stage of first converting it into information and then reconverting it into knowledge in another sentient brain.

Conflating information and knowledge leads to stupidity. Even the president of India is not immune. Read his writings on PURA and see how silly it sounds when he says Village Knowledge Centers. Centers don’t have knowledge any more than a Physics textbook has knowledge of Physics. Else we should be referring to physics books as “Dr Physics Textbook.” Books have information, not knowledge. So they are Village INFORMATION Centers.

A brain is required for translating information into knowledge. But it has to be a prepared brain. You can give the most advanced information to an unprepared brain and it will do little good. So for information to be useful, it has to be presented in a sequence that cannot be leapfrogged even though the technology that you use to deliver the information can be very advanced and you could have leapfrogged over eons of intermediate technology.
Now back to development. Development is concerned with human beings, while technology is an instrument of economic growth through more effective use of the factors of production. There is a strict sequence of development that a human being goes through. For instance, basic literacy and numeracy are the first stages of education. Whether you are going to be a quantum mechanist or a auto mechanist, you cannot leapfrog that. So also, to use technology, you have to meet some minimum requirements. Simply installing high tech computers in places where they can barely read is silly.

It is undeniable that high tech can be used to promote basic literacy and numeracy and other bits of basic education. It is the same in every aspect of life — you can get nutrition from a diet of filet mignon or from dal-roti. But where one can barely afford dal-roti, insisting on delivering filet mignon is worse than stupid. You can always get there from here in a Rolls Royce. But it may be better to budget for a bicycle when resources are limited.

People who have yet to lose their fascination with high tech gizmos promote mindless schemes for bringing high tech to rural areas without asking whether there are cheaper alternatives. I have seen a depressing number of hare-brained schemes which promote PCs for adult literacy in rural areas, for instance. What you really need is a blackboard and chalk.

I think the OLPC is a great idea and will benefit a lot of people. Unfortunately, that lot does not include students in poor underdeveloped economies such as India. The OLPC is irrelevant in the context of Indian education. It’s a technological solution, and the problem in India is largely non-technological. It doesn’t make sense to me to recommend an unaffordably expensive technological fix to a non-technical problem. I think that some very clever people have misunderstood the nature of the problem. It is as if someone recommends casting spells to fix a broken car. Psychological methods cannot address mechanical problems.

Here’s how I see the problem of education in India. India’s primary education is in trouble, which spells trouble higher up the chain. Around ninety-four percent drop out by grade twelve. Only six percent go to college, and of those who graduate college, only about a quarter are employable.

Why is the Indian education system in the pits? Primarily for the same reasons that the Indian economy is in the pits: government control, indeed governmental stranglehold, of the economy. It is instructive to see that whenever, for whatever reasons, the government has let go of the stranglehold (or was not involved in to start off with), that sector has flourished, and how!

For example, consider telecommunications. In five decades of governmental monopoly the telecommunications sector had a base of twenty million users; now absent the monopolistic stranglehold of the government on the telecommunications sector, we add twenty million users in three months.

Let me underline that: THREE MONTHS as opposed to FIFTY YEARS. Sure, technical progress (cellular technology) is a factor. But it is not the major factor.

It is easy to demonstrate why government intervention in the Indian economy explains why the Indian economy performs miserably. Let’s for the moment consider that as read. This fact is relevant in understanding why OLPC does not make sense in the Indian context.

Indian education suffers from government intervention and lack of resources. Resource constraints are both financial and human capital. Furthermore, the limited financial resources are leaked away through bureaucratic and political corruption and ineptitude. The major barriers in education are not technological and therefore a technological solution is not going to alter the situation. Indeed, the OLPC would make the situation worse in the Indian context.

Electronics is neither necessary nor sufficient for education. Merely providing laptops is not going to solve the problem. I have argued before that the much lamented “digital divide” is at best a misguided notion and at worst a device used by self-serving money grubbing powerful vested interests to milk the poor for all they are worth.

In the Indian context, the OLPC could in fact widen the “digital divide” and make the system far worse than it is today. The solution to India’s educational problems will and must use technology intensively, but it will have little to do with children toting laptops around.

OK, the Problem with OLPC in India:

1. India cannot afford two hundred million laptops at an upfront cost of US$40 billion. Merely buying a million laptops for $200 million will be a problem, as you would have to figure out which one out of every two hundred students will be the lucky one to have a laptop.

2. One million laptops has an opportunity cost. That is, the money could be spent on other things. $200 million could be used to provide one million students with one full year of education plus boarding and lodging in rural India. This money could be spent locally and provide jobs and have the usual economic multiplier effect.

3. Even if we had the $40 billion to spend on OLPC, we would not have solved the real problem of why India has half the illiterates in the world. Government involvement is the problem. And OLPC actually would increase government involvement.

Prediction:

1. The countries that can afford to buy laptops in numbers comparable to their student population will not face the problems of equity and distribution. There aren’t many developing countries like that.

2. OLPC is a costly device for poor countries. It’s going to be a huge waste of money that could be more efficiently spent on other technological solutions such as radio, TV monitors, and DVD players.

[Related Links:

3. I like this post on opportunity costs. I argue that the notion of opportunity costs is basic to logically thinking about economic matters. Even many otherwise educated and sane people have a very slender grasp on this fundamental truth of our universe. ]

It is important to stress that the WAC is a superset of NAC. So theoretically if you have access to the WAC, you have access to the NAC. The novice needs access to the NAC while the expert needs access to the WAC. While the expert can identify the NAC from among the WAC, a novice with her limited understanding of the subject area is likely to get lost in the WAC.

To illustrate that point, suppose you do a Google search on “Prisoner’s Dilemma,” you get 539,000 results. (Footnote: When I did the search with “Prisoners Dilemma” — in essence misspelling the term, I got 280,000 results. This shows that minor variations in spelling can radically change the search results and therefore how difficult it is to search effectively on the web.) Somewhere on the 14th page of search results is the definitive introductory work which an expert will take only a few minutes to identify. A novice will have to be very lucky to identify that same work without spending days crawling through hundreds of pages.

To illustrate the distinction between the WAC and the NAC, consider this. First, an economics textbook such as “Microeconomic Theory” by Hal Varian. Many students in the process of learning the basics of micro theory need access to the text, and each student requires repeated access to the text over the period of study. That text is part of NAC. Contrast that with papers on microeconomic theory that are of interest to doctoral students of economics. These papers are accessed only occasionally and that too by not all doctoral students of economics. This sort of information is part of the WAC.

One way to state the distinction between the WAC and NAC is to note that the former consists of a very large number of pages, the average number of page hits on which are small; and the latter consist of a much smaller number of pages with very high average number of hits. Thus 50,000 pages of an economics journal will get an average hit rate of perhaps 1 per year (assume 500 researchers accessing about 100 pages a year), while 200 pages of the basic economics text book will get . . . Let’s do the numbers. The average student reads a text book about 10 times over the course of the term. If a particular school has 100 students reading that text book, that implies 1,000 accesses to the entire book. In other words, the average hit rate for the pages of the book is 1,000 during a term. If the text is used for five consecutive terms for different batches of students, then the content of the book is accessed 5,000 times.

Here are the two points from the concocted example above that need underlining: First, the NAC is accessed orders of magnitude more often than the WAC. Second, the NAC is orders of magnitude smaller than the WAC.

In the next bit, I would like to explore the implications of the above two facts. You have to know the NAC if you wish to make anything of the WAC.

Why is Indian education system in the pits? Primarily for the same reasons that the Indian economy is in the pits: government control, indeed governmental stranglehold. It is instructive to see that wherever for whatever reasons the government has let go of the stranglehold (or was not involved to start off with), that sector has flourished, and how!

For example, consider telecommunications. In five decades of governmental monopoly the telecommunications sector had a base of 20 million users; now that the monopoly is released, we add 20 million users in three months.

Let me reiterate that: 3 MONTHS as opposed to 50 YEARS. Sure, technical progress (cellular technology) is a factor. But it is not the major factor. See the air transport sector in India. The seats go abegging now compared to earlier when you had to beg a bureaucrat to allow you to get a ticket on a plane. Consider the two-wheeler and the four-wheeler markets. You had to wait for 7 years to get a scooter, and you had to choose between 2 models of cars, models which were of 50’s vintage. Today the firms drag you off the street and arrange financing for you to buy one of the several hundred models of cars and two wheelers, and give you coffee while your loan is processed and give you a toaster as your drive off with your new car or scooter–all before you know what hit you. Compare 7 YEARS with one AFTERNOON. What happened? The government let go of its chokehold on that sector.

I could go on for a long while demonstrating why government intervention in the Indian economy explains why the Indian economy performs miserably. This background information is relevant in understanding whether OLPC makes sense in the Indian context.

Here is an abstract of my argument. Indian education suffers from government intervention and lack of resources. Resource constraints are both finanical and human capital. Furthermore, the limited resources available are leaked away through bureaucratic and political corruption and ineptitude. The major barriers are not technological and therefore a technological solution is not going to alter the situation. Indeed, the OLPC would make the situation worse in the Indian context, what I would call the “immiserizing technological intervention.”

First however allow me to state up front that I am all for the use of technology in education. The educational system evolved before the advent of the amazingly powerful technological tools of today such as TV, radio, PCs, the internet and the world wide web, html, java, and affordable multimedia. ICT provides the most powerful tools that can fundamentally change how education is provided efficiently and effectively. In fact, in my day job I am working on creating a system which uses ICT intensively to radically transform Indian education. I would be happy to share my vision.

I have learnt an immense amount using computers and the web. I would have loved to have a connected computer when I was growing up. Unfortunately, I saw my first computer only near the end of my undergrad work in engineering. It was a IBM mainframe. Punch card era. Anyway, I learnt reading, writing, arithmetic, and some other useful skills entirely from going to an average school with great teachers and a few books. The fact that I hadn’t even seen an electronic device till I was 20 years old does not seem to have hampered my education. Indeed, 99.99999 percent of all humans who have ever got educated have done so without the benefit of any electronic devices.

Electronics is neither necessary nor sufficient for education. Sure it is going to transform education but the lack of laptops is not the barrier that faces our educational system. Therefore merely providing laptops is not going to solve the problem. I will argue that the so-called digital divide is at best a misguided notion and at worst a device used by self-serving money grubbing powerful vested interests to milk the poor for all they are worth.

I will show that in the Indian context, the OLPC will in fact widen the “digital divide” and make the system far worse off than it is today. I will then outline the solution to India’s educational challenges. And I promise you that the solution will use technology intensively, only that it will have little to do with children toting laptops around the place.

Entrepreneurs, philanthropists and established computer firms have for the better part of a decade invested millions of dollars to lower the cost of a desktop PC and develop cheaper alternatives. Intel has made its Eduwise laptop; AMD, a Personal Internet Communicator; Microsoft, the FonePlus. MIT computer guru Nicholas Negroponte’s Children’s Machine, now called the XO, is the most publicized recent attempt at converting the poor into computer users. But Negroponte’s idea is to spread computers to the poor, with the help of heavy subsidies from private and public philanthropy. His price is still about $140, too high for India. Indeed India rejected Negroponte’s offer of a million for cost reasons. Jain’s motive is different: he wants to make money.

And he knows India. Despite the country’s rise as an outsourcing hub, PCs are selling slowly—far more slowly than mobile phones or motorbikes—because they are too expensive, too complicated to use and too difficult to maintain. What people have been waiting for, some experts think, is a new approach to computing that boils the essence of Internet access down to its lowest cost—and lowest risk. Jain plans to offer all this in lease deals that include easy-to-use hardware, Internet connection, application software and service—for $10 a month.

Read it all.

My problem with the OLPC sort of solution to the problem of the education of poor people is that it makes no economic sense, however technologically feasible it is to create a laptop that runs on hand-cranked power and is cute as a button. I realize of course that in due course, those who try to fix a non-technical problem with technical solutions will eventually see the folly of their ways. But by then another generation of poor children would have suffered needlessly.

Generally markets weed out these sort of silliness. The problem is that the OLPC wishes to circumvent the market and go to the governments to sell the laptops. A private party would make a cost benefit analysis and will not generally buy something when there are less expensive alternatives. Governments, unfortunately, have no such compulsions. Let’s bear in mind that it’s people in government who control the public purse strings but it’s not their money in the purse. They therefore lack the incentive to spend the money efficiently. The decision to shield the OLPC from the judgement of the marketplace may perhaps be its most telling handicap.

Karnani’s paper argues against the BOP proposition. He summaries the BOP proposition as: there are profits to be made by selling to the billions of the world’s poor, and by doing so, bring prosperity to them, thus alleviating poverty, and that multinational corporations (MNCs) should sell to the poor to do good while doing well for themselves.

First there is the disagreement regarding the actual size of the BOP market. The BOP camp estimates that the potential market at PPP terms is US$13 trillion. Karnani estimates a more modest US 1.2 trillion at PPP, and more like US$ 0.3 trillion at the financial exchange rate. That’s an order of magnitude difference there.

Furthermore, Karnani points out that the poor spend most of their income on food; the poor have little disposable income. Therefore, if their incomes don’t rise, they cannot afford to consume more than they actually do. If there are ways of making stuff more affordable to the poor, it is certainly not by selling stuff in smaller packages. Smaller packages in fact have a higher unit cost, not lower. Pretending that smaller packages increase affordability is similar to pretending that selling food in very small packets will solve the hunger and malnutrition problem of the poor. He concludes that the “single serving revolution is a dud.”

The paper takes Prahalad to task for giving examples which do not demonstrate that MNCs do, or even can, sell to the poor. The markets which the poor engage in don’t permit scale economies. Therefore the poor are better served by local small and medium enterprises, argues Karnani.

The poor, he says, are forced to make a different cost-quality tradeoff. They would rather have a more affordable but lower quality good than a higher quality good which is out of their reach. He says that the claim that MNCs can reduce their prices dramatically without sacrificing quality is unrealistic.

Rather brutally, Karnani declares that the “fallacy of the BOP proposition is exacerbated by its hubris”:

Prahalad (2004) states that all the examples used in his book challenge the current paradigm. Selling appliances on credit – as does Casas Bahia – is not even a nobel idea, let alone a new paradigm. But, Prahalad is not content with changing paradigms, and asks us to change “our genetic code”!

The Millennium Development Goals adopted by the UN member states targeted halving of extreme poverty in 25 years. Finding this pace too slow, Prahalad states “I have no doubt that the elimination of poverty and deprivation is possible by 2020.” But why be satisfied with only poverty eradication when so many other problems plague the world? Prahalad and Hammond (2002) argue that the BOP initiative will not only eradicate poverty, but also cure economic stagnation, deflation, governmental collapse, civil wars, and terrorism. And all this in 15 years!

While providing credit to the poor for purchasing high-priced items (Casas Bahia example) makes them worse off because of the burden of additional debt, Karnani agrees that microfinance is a good example of how the poor can be helped. But even there he is cautious and notes that most microfinance institutions are non-profit entities, and are not self-supported.

Karnani denies that the BOP claim that there is untapped purchasing power at the BOP. He says that the way to help is to raise the real income of the poor. The poor must be seen as producers, rather than as consumers. That is, buy from the poor instead of selling to them. He cites Amul and ITC e-Choupals as examples of more efficient markets–where the poor are the producers—that increase real incomes. And if you have to sell to the poor, then make available lower quality goods which can be priced lower so that the poor can have greater choice along the price-quality spectrum.

Is the BOP proposition a harmless illusion or a potentially dangerous delusion, he asks. He argues that the BOP initiative results in the poor spending money on products such as TVs and shampoo that would have been better spent on higher priority needs such as nutrition, education and health. “The problem is that the poor often make choices that are not in their own self interest.”

My position is that it is not only the poor but all people often make choices that are not in their interest. The only distinction is that the rich can afford to make poor choices, which the poor cannot. At least some of the stuff that I buy is not really useful, and often times is positively harmful. But I have much more than $2 a day, and can afford poor choices.

I agree with Karnani that you have to increase the real incomes of the poor by seeing them as producers. This I believe can be done by two ways. First, the “distribution” route: produce (possibly more) stuff, and give them a larger share. This lump-sum transfer will increase their real incomes. Second, the “production” method: help them produce more and also become more productive. The former is unlikely to appeal to the rich.

To do the latter, you have to make markets for the production of the poor more efficient so that they retain more of the value they produce. To make them capable of producing more, you have to educate them. There is where I believe the fortune at the bottom of the pyramid lies. Education has positive returns in today’s world. The return on investment in education is positive. That means, the cost of the education will be more than paid for by the subsequent increase in the real income. But the poor are credit-constrained. So the way to help the poor is to release that credit constraint through financing education. How to do that is a different kettle of fish which we will leave for a later date.

Since the “One Laptop Per Child” (OLPC) proposal is being considered here, we have to have alternate proposals which can be considered in contradistinction to it. I propose, for arguments sake, the “One Blackboard Per School” (OBPS), “One Teacher Per School” (OTPS), and “One Set of Basic Facilities Per School” (OSOBFPS) schemes out of many potential candidates. First, we will consider how they stack up against the OLPC proposition. The next thing we do is to figure out which of the alternates is the one that is “perfect” and which therefore poses the threat to the achievement of the “good.”

It is almost common knowledge that hundreds of thousands of schools in India, especially in rural areas, don’t have blackboards and sometimes even chalk. I say “almost” because some people in positions of influence are apparently not fully aware of this ground reality. Some schools have student to teacher ratio approaching infinity (because the denominator tends to zero due to teacher absenteeism). Some schools are so strapped for resources that they cannot provide basic facilities such as toilets. It would be good to have schools where at a minimum the students are guaranteed a teacher who is present, a black board or two, some chalk, and a toilet if you please so that girls don’t suffer.

Proposing high tech tools such as laptops for education in light of the missing basic facilities is wonderfully surreal like the Cheshire cat’s disembodied smile. Alice in her adventures in Wonderland comes across the Cheshire cat and remarks that she has seen a cat without a smile before but never a smile without a cat. I have seen schools which have teachers and blackboards, and which also use laptops, but I have difficulty imagining a school where there are laptops but don’t have teachers, blackboards, chalk, and toilets. Perhaps I have not had much practice imagining impossible things.

There is a sort of hierarchy of needs when it comes to providing the basic infrastructure for education. You need, at a minimum, a trained teacher, a good place to learn in, and some teaching aids such as blackboard and chalk. Slates for the children is also a good idea if notebooks are too expensive. Next, it would be good to have books. If after providing those basics to all who need it (irrespective of their ability to pay), if we are still awash in funds, perhaps computers with internet connectivity for those who cannot afford them on their own should be provided.

Time for me to take a brief digression with tin-foil hat firmly atop my head. Why is it that you find billion dollar projects such as the OLPC but never hear of even million dollar proposals such as OBPS? The answer, I believe, lies in the nature and structure of the computer industry. Broadly it is oligopolistic. The major players can be counted on the digits of your hands. Heard of Intel, AMD, Microsoft, HP, Dell, etc? Of course you have. They have deep pockets and concentrated interests in pushing their wares on whichever market they can serve. Can you name any blackboard and chalk manufacturers? Nope. They are many, small, and barely eek out a living. So there are no OBPS schemes hitting the headlines screaming “The Blackboard Divide” unlike the OLPC and their wonderfully alliterative “Digital Divide” which strikes terror in the hearts of the do-gooders who are convinced that empowering children means giving them an expensive gizmo that neither they nor the economy can afford. (see Why Telephones, Radios, and TVs Don’t Make the Conference Circuits, Seduced by ICT, and Milking the Digital Divide.)

Well, never mind the tin-foil hat. Even non-wearers of tin-foil hats should recognize that there are commercial imperatives that motivate high-technology firms to push for adoption of expensive solutions to impoverished people. There doesn’t have to be a cabal hatching schemes with an evil glint in their eyes. If the developed economies’ markets are saturated, manufacturers of high-tech gizmos will seek out greener pastures to graze upon. When it comes to spending, educational or otherwise, it is a matter of choosing the most appropriate among several alternatives. And one has to be suitably grateful that one has the option of using laptops in school. My gripe is not that laptops are not a good idea; it is that in our case it is not appropriate because the sequencing is wrong and the cost is prohibitive.

Now we get back to my OBPS, OTPS, and OSOBFPS schemes. Let’s just reduce it to OBPS and let the headlines scream “OBPS to Bridge the Blackboard Divide.” Nope, it does not have the same zing to it as “OLPC to Bridge the Digital Divide.” Not high-tech enough; not much money in there; doesn’t make good advertising copy; doesn’t involve high-flying overpaid executives of multinationals corporations making breathless Powerpoint presentations on LCD projectors to developing economy government officials.

When I went to school, we were not on the wrong side of the blackboard divide (BD) although the digital divide (DD) was something astounding. None of us had even heard of laptops, leave alone own one. We had teachers, blackboards, chalk, slates, notebooks, books, and toilets, however. We sat in our simple classrooms, and did our sums. We (at least some of the time) paid attention to what was being taught and even did our homework. A few years later, we found ourselves proficient in the three R’s and went on to college. Moral of the story: it is possible to become educated without laptops.

Question: would we have become better educated if we had access to laptops and the internet? Arguably yes. At least some of us would have had a richer educational experience. Strictly speaking for myself, I would have probably flunked. I would have surfed the web for god alone knows what, I would have played computer games (I once spent an entire year playing Solitaire on my laptop), I would have wasted all my time socializing on the web. In short, I am grateful that I got access to the internet only after my basic education was complete. Even now, as a grown up and presumed responsible person, I find that my work suffers when I start surfing the web. I am sure that if my internet privileges are not restricted, I will probably never finish the work I am supposed to do and I fear that I will get fired.

If you have not read the overwhelming evidence about the dismal state of the Indian educational system, then take it from me for now: something like half the 7th standard students cannot read nor write and do arithmetic. Position that fact against the fact (mentioned earlier) that a large percentage of schools lack even the most basic of facilities. See the correlation? It is strongly suggestive of causation. Moral of the story: lack of basic facilities hinder basic education.

At the risk of repeating myself ad nauseum, it is not a lack of laptops that is at the root of our illiterate and innumerate children; it is the “Blackboard Divide.” Giving children laptops will not achieve anything if they cannot illiterate and innumerate. Here is an illustrative personal anecdote.

A few weeks ago, I was staying at a Tata Chemicals guest house in New Delhi. For internet access, the guest house had a room with a couple of connected PCs. The housekeeper was a young Nepali who turned on a PC and told me the password. He watched intently as I checked my mail and did other sundry stuff. I then offered to teach him how to use the PC and the web, since his job left him with lots of free time. With great enthusiasm, I told him that all he has to do was to open a browser, and then type in the address and . . . That is when he blurted out that, aside from writing down phone numbers and taking down names, he does not read nor write. Yes, he had 24-hour access to connected PCs which he could use to his heart’s content, but the PCs were as useful to him as a bicycle to a fish. Moral of the story: bridge the literacy divide if you wish to have a hope of ever bridging the digital divide.

Now it is time to do the numbers. Allow me to compare the OLPC against the OBPS (“one blackboard per school”) proposals. In a previous post (“The OLPC – Rest in Peace”) I did some back of the envelope calculations. For one million children, the cost was estimated to be US$ 200 million for the first year. Assuming that the laptops have a working life of three years, the total cost of ownership of one million laptops works out to be US$ 320 million ($200 million for the first year, and $60 million each subsequent years for “use costs”). That is approximately, $100 per child per year.

A brief note on the numbers. These are educated guesses and are suggestive of the magnitude rather than exact numbers. I believe that the argument is sufficiently robust that minor deviations from actual numbers will not affect it materially.

The $100 per child per year cost of OLPC is not instead of the other costs of teaching but rather in addition to it. You still need teachers, blackboards, and other facilities. The OLPC assumes that these are a given. I contend that there are hundreds of thousands of schools with tens of millions of children who don’t have the basics, and giving them OLPC will be about as useful as throwing both ends of the rope to a drowning person—a grand-looking gesture but of no utility. The available funds have alternate uses. Let’s examine one alternative use for a bit.

Consider a small rural school with 300 children. Ten teachers, 10 classrooms, and a few other basic amenities. From our experience, the operating cost of the school is around $12,000 per year, which includes teacher salaries ($1,000 per year). Additionally, books and other teaching and learning material add another $3,000. Total cost per year (neglecting land and building costs): $15,000, or $50 per student per year. Note that two-thirds of the operating costs of the school is allocated to teacher salaries. This has important consequences.

If we consider about 100 million children in the age group 4 through 15 need to be in school in rural India, then the total cost is of the order of US$5 billion per year. Given the student/teacher ratio of 30, we will employ about 3.33 million teachers at an annual wage cost of around $3.33 billion. The two important words in there are “employ” and “wages.” We are employing educated people as teachers and they are earning wages which they spend in the rural areas. The forward and backward linkages of this wage spending affect the entire economy more positively than the spending on buying high-cost high-technology gadgets. I posit that the multiplier effect of employing teachers in schools is greater than that of buying OLPC for India.

Let us now consider the OLPC. I am assuming that the intent is to give the laptops to children who already are going to schools which have the basic infrastructure and who have the support of teachers and parents. That is, I cannot imagine giving laptops to children who have no schools to go to. So in effect, those who lack even a basic school, don’t get laptops. The much lamented “digital divide” is being increased rather than decreased when seen from the point of view of the tens of millions who don’t even see the insides of a school. So therefore, giving an already “privileged” child a laptop at the cost of $100 per year is depriving two children of a basic education for a year (which as we estimated costs $50 per child per year.)

Imagine the government of India spending $100 a year on a relatively privileged one million children and depriving two million children of going to school. Let’s leave aside the thorny question of who gets to get the goodies; no doubt vote bank politics will figure centrally in the decision and go to further pitch one caste/religion/linguistic group against another. The immorality of arbitrarily deciding to favor one group over another is odious and abhorrent.

I absolutely agree that meritocracies fuel the engine of growth upon which pluralistic heterogeneous societies depend for economic growth and development. The issue is one of identifying the constituent elements of these meritocracies. I also admit that innate talent and abilities are endogenously determined, as Dr Banerjee pointed out in the previous post. This endogenous determination must be catalyzed through making opportunities available to as large a population as possible. The net must be cast wide to identify those who would be most able to benefit from an education. In this respect, while the OLPC has the potential to help a percentage of those who get them, it will also assuredly deny twice as many an opportunity to advance.

Now on to the point we began our deliberations with. Which of the two—the OLPC or the OBPS—is the “perfect” and which the “good”? If OLPC is the prefect solution, then clearly it will impair the good solution of providing basic educational opportunities to many; if the OBPS is the perfect solution, then the OLPC, as the good solution, may be prevented. My position is the former: in an ideal world, where all children have the opportunity to gain a basic education irrespective of the accident of birth, giving all children laptops will be an unalloyed blessing. An ideal world, which in our case we have not got, would admit the perfect solution and no trade offs will be required. The imperfect world, which is what we have, requires we trade off the potential benefit of the few for the guaranteed benefit of the many.

In conclusion, allow me to stress that I am not a Luddite. I have a deep and abiding faith in the ability of technology to solve technical problems. Today I find it inconceivable providing higher education without the aid of PCs, laptops, and the internet. Even for certain aspects of basic education, I am convinced that we have to use the power of the advances in information and communications technologies if we have to fix our educational system. In fact, I am betting my future on the use of computers for providing effective and relevant education efficiently. My proposal, however, does not depend on spending public monies on selectively providing laptops to some school children while denying some others even the opportunity for basic education.

[Previous parts: Part 1, Part 2. See also, "Formula for Milking the Digital Divide."]

As usual, you’re right on the money on this one. Up until your post, I didn’t see any that would fit an economist’s modus operandi, namely, one based on a full-blown cost benefit analysis (another way of stating your “opportuntiy cost” analysis). I’m surprised that such an evaluation is not already underway, quite independently of Negroponte’s initiative or proposal. Such an evaluation should be based, in my opinion, on some kind of pilot study (based, in turn, on a scientifically drawn stratified sample that accounts properly for demographic variation). I think it is just a matter of time before computers have to be introduced on a mass scale, particularly for the education and use of those that will make up the next generation (I don’t hold any particular brief for laptops over desktops, or individual versus community or small-group use of computer resources).

The issues you have raised with respect to, let’s call it euphemistically, “implementation,” and your concern about moral hazard are indeed all valid. These, in some sense, fall into the domain of moral imperatives — whose existence or importance I do acknowledge, but whose cost implications I do not know of any easy way to quantify. But, if we can agree that, even in pluralistic, humanistic, secular, and democratic societies, meritocracies do get created and to good purpose, then the larger issue of just who should be the (initial) beneficiaries of any OLPC-like initiative can be addressed. The IITs and IIMs are evidence enough that meritocracies exist on which progressive societies depend. However, I would hasten to add that meritocracies should, to the extent possible, be based on true proficiency and ability, rather than the selective denial of opportunity. Unfortunately, innate ability and talent tend to be discovered endogenously, i.e., they are more likely to be found in particular demographic and income groups precisely because they have had the opportunity and support to showcase them. Too bad, there isn’t an easy way to extend that discovery process to all segments of society in a resource-constrained and populous country like India. But, when it comes to advancing the computer-literacy of India’s citizens (and reaping the substantial follow-on benefits of that), should even patently selective and seemingly unfair educational programmes be eschewed until it could somehow be assured that literally not one child in that vast country — to borrow a hackneyed phrase — will be left behind? Should the “perfect” become the enemy of the “good”?

[Emphasis mine.]

An admission is apt here. Among economists I admire unconditionally, Aniruddha ranks way up on the list. His keen insights are matched by his facility with the written word. I wish I had that sort of brain power.

For now, I will leave you to ponder the issues he raises. I will post my thoughts in a bit.

[Continue on to part 3. Previous bit part 1. See also, "Formula for Milking the Digital Divide."]

The Human Resources Development (HRD) ministry of the government of India recently decided to just say no to the $100 laptop that Prof Negroponte of MIT Media Lab has been furiously peddling. He wanted the government to buy, oh, about 1,000,000 of those at the modest cost of $100,000,000 and give it to school children. Mind you, noble intentions motivate this: so that no child is left behind and the digital divide is bridged and all the kids will become computer savvy and what not.

The HRD explained that according to some American psychologist “any sustained use of computers may lead to a disembodied brain and bring about isolationist tendencies in social behaviour” and that the “pedagogic effectiveness of this initiative is not known.”

Not just that, it went on to warn that “Both physical and psychological effects of children’s intensive exposure implicit in OLPC are worrisome. Health problems of our rural children are well known; personalised intensity of computer-use could easily exacerbate some of these problems”.

I bet the good folks at the HRD ministry are not as careful when it comes to their own children playing with laptops and PCs in their government provided flats in New Delhi. The reasoning behind promoting OLPC in poor countries is flawed (as I had written earlier: Formula for milking the digital divide); but the reasoning behind the HRD ministry’s rejection of the OLPC is worse. I am not surprised.

However, the Secretary to the Ministry, Sudeep Banerjee wrote to the Planning Commission and argued that instead of spending on laptops, funds should be allocated to univeralizing secondary education. Good point, Mr Banerjee. Still, Banerjee said that OLPC “may actually be detrimental to the growth of creative and analytical abilities of the child”. Not at all convincing.

My opposition to the OLPC revolves around the notion of opportunity cost. First, let’s briefly consider the total cost. There’s the direct cost of a laptop, which was first advertized to be $100 but now has been pegged at $140. Add to that the operational costs. They will include the cost of maintenance. Assume that over its lifetime, given that it is a new piece of hardware, it is a conservative 25 percent, or $35. Then there are the “use costs.”

Use costs are incurred because the laptops are used by people. Predictably, people–especially children–drop things, misplace things, get things stolen. So what happens then? Does the government replace those laptops? Who pays?

Then who gets those laptops? There are, I estimate, about 100 million school-going children in India. Can we afford to buy laptops for them all? If not, who then will be favored? Will there be “reservations” for laptops so that favored religious and caste groups be given preference? Who decides? Will those in charge of handing out the laptops make a bit on the side, either directly or indirectly, through their power to deny or grant a shiny new gizmo to thousands of people. Power in the hands of people invariably corrupts them.

Who owns the laptop? The child or the parent? What does ownership mean? Will the parent be held liable for the cost of the laptop if the laptop is “lost”? Will a very poor family be able to shoulder that liability? Remember that the cost is $140, which is about 30 percent of the per capita income in India. Who pays for routine maintenance? If the user is not responsible, then there is the problem of moral hazard: the user will not be sufficiently diligent in caring for the object.

The total costs then is the sum of the direct costs ($140), the maintenance costs ($35), the use costs ($25, say): $200. Let’s say that India buys only 2 million of those cute green machines. The cost: $400,000,000.

Now on to the reason why I oppose the OLPC: opportunity costs. Some time ago, I had explore the notion of opportunity costs in “Casting Spells to Fix a Broken Car.”

The proponents of OLPC argue that spending hundreds of millions of dollars on laptops will empower many children, educate them, make them cross the digital divide. You will not get any argument from me against that. Some unknown percentage of those who use those laptops will benefit from them; some unpredictable percentage will get computer literate. Those things will happen because of the OLPC. My concern is with things that will not happen because of OLPC.

This point is worth stressing. It is not just that we make A happen; we have to also recognize that we have to forego the opportunity of making B happen. The important thing is to weigh the benefits of A against the benefits of B. Only if the former out weighs the latter, can we convincingly argue for making A happen.

Spending a few hundred million dollars will help some children, and also enrich the manufacturers of the laptops (Chinese manufacturing), and all the middle-layers that will be invovled in the selling, maintenance, and support. Compare that to the alternative use of the same money.

Tens of millions of children don’t go to school, and of the many who do, they end up in schools that lack blackboards and in some cases even chalk. Government schools — especially in rural areas — are plagued with teacher absenteeism. The schools lack even the most rudimentary of facilities such as toilets (the lack of which is a major barrier to girl children.)

Attention and funds need to be directed to those issues first before one starts buying laptops by the millions. Fact is that we need basic education (literacy, numeracy, etc) and secondary education. These have been provided very successfully without computers around the world. Every one who went to school and became educated more than a mere 30 years ago–in the entire history of human civilization, billions of people in all–did so without having ever seen a computer. What they had was much less expensive than PCs: they had teachers and an environment conducive to learning.

Here is an analogy. By pushing OLPC, what they are trying to do is to increase the capacity of a tub made of staves of different lengths. How much water the tub can hold is then dictated by the length of the shortest stave. If one were to pour water into the tub, the water level will continue to rise but only uptil the level reaches that of the shortest stave, when it starts overflowing. To increase the capacity of the tub, you will have to lengthen the staves. But lengthening any of the staves except the shortest stave will not increase the tub capacity. And even lengthening the shortest stave beyond the length of the next shortest stave is wasted. So the strategy for increasing the tub capacity is this: lengthen the shortest stave(s) first to match the length of the next shortest stave(s), and repeat.

The shortest stave in our tub is the will and commitment of our policy makers.

[Continued in Part 2. See also "Formula for Milking the Digital Divide."]

Ever since I have set eyes on the internet, I have been distracted by it. And I thank the gods for the distractions because at least a bit of the path to enlightenment can be illuminated by the faint glow of a CRT.

The web mimics and reflects into the virtual world the most salient feature of the real worl–which is that every tiny bit of the real world is connected to every other bit. The correspondence betweeen the image and the reality is continually gaining fidelity and the day may not be far off when it would be hard to distinguish the image from the reality.

It was John Muir, the environmentalist and ecologist, who used to say that he cannot write about nature. He said that when he starts to write about something, he finds it is connected to something else and that something else is connected to some other things and so on to infinity. So if he attempted to comprehensibly describe something however small, he would fail miserably.

I have the same pleasant complaint with the virtual universe as John Muir did with the universe when he noted that “when we try to pick anything out by itself, we find it hitched to everything else in the universe.”

Connections. I am fascinated by connections. I used to sit glued to the TV watching James Burke’s BBC series called “Connections.” A journalist and historian of science, Burke is in a class all by himself. If you have an hour to spare for some delightful insights into the nature of innovation and the histroy of technology, listen to the man. And the miracle of it all is that you can do it from the comfort of your own home and at a time of your choosing, if you have an internet connection.

{to be continued.}

What accounts for the unreasonable success of the cell phone is that it reduces the cost of accessing information instantly. I define a cell phone as a general-purpose personal information communications device. I would like to stress that the “personal” refers to the information, rather than to the ownership of the device. Here is what I mean. What is information depends on who the person is. For instance, to me “cricket scores” means a lucky locust and I could not care less, while others are willing to pay to be told some nonsense about “145 for 6”.

The rich and the poor alike have a need for information and depending on their personal interests and occupations, they differ in their willingness to pay for information. That is of course true for all things, not just information, ranging from personal hygiene products to modes of transportation. Thus while the device is common, what the poor do with the device is different from what the rich do with it. This point is important to keep in mind when looking at the market for information with the cell phone as the enabling device.

I like to distinguish between two broad categories of information: pure, and actionable. Actionable information is something that enables a decision to be made and action is prompted as a result. Pure information is something that does not result in an immediate response or action. Pure information is “good to know” as opposed to actionable information which is “need to know.” Economists may call pure information a luxury good, while actionable information is a basic good. Since the rich typically spend a greater percentage on luxury goods, and the poor a greater percentage on basic goods, it is obvious that the poor will spend relatively more on actionable information as opposed to pure information.

Examples of pure and actionable information is not independent of a person, naturally, given that information is personal. However, just to take an example, cricket scores are pure information unless you are a bookie and need to settle accounts. The price of fish at a particular market along the Kerala coast is actionable information to a fisherman out at sea because it affects his decision where to land his catch. The busy stock analyst catching up with the latest political news while commuting to work is consuming pure information, and he is willing to pay for it even though he will not take any immediate action on it. But getting news on his cell phone is a luxury that the fisherman would not be willing to pay for.

The bottom line: though the technology is universal, the needs and capabilities of different parts of the world are diverse. That is, there are different markets. And what works in one market may not work in a different one: a tautology no doubt but often forgotten in the haste to transport a solution from the developed world to the emerging markets of the developing world.

For instance, online advertising, search, etc, work in the US and other rich countries to support free or subsidize services. But in the poor countries, the services may not be supportable unless of course the market in the poor countries is defined only in terms of the small percentage of rich people in those countries. India has a population of over one billion but in terms similar to those of a rich economy like the US, I would approximate India’s “effective” population to be around 10 million. That is, imagine that India has only 10 million people, with 20 million cell phones, about 5 million PCs, a couple of million cars, and annual average incomes of around $20,000. The solutions that work for the US population, will work for this restricted population in India, with the obvious caution that the market is about a tenth of the US market.

The rich are different from you and me, noted F. Scott Fitzgerald. Hemmingway identified the difference and said that they have more money. I keep that distinction firmly in mind whenever I try to figure out what works and what doesn’t around the world. PCs and the internet works in the rich world differently than they will in the poor world.

So the opportunity for developing innovative solutions specifically for the emerging market is phenomenal. Consider the sheer size of the population which is mobile-phone enabled: there are 70 million or so mobile phone subscribers in India, and it is growing at around 2 million a month. By next year’s end, that will be 100 million. Most of the users will not be those who can afford the luxury of pure information, but will be those who need actionable information. The cabbie needs to know where his next fare is, the plumber where the leaky faucet is, the corner grocery store where which household needs supplies, ad infinitum. We all have goods and services that we need to sell or buy from the neighborhood. The cell-phone is the perfect platform to create a mobile marketplace where millions of trades can be enabled for economic efficiency and growth.

As an economist who swears by the power of the market, I predict that the biggest challenge and opportunity lies in creating solutions that will enable the mobile marketplace. Two major components have to be built: one, to make actionable information accessible for trades to take place, and two, an accounting and payment mechanism for those trades. This will identify the two parties in a trade, will connect them, and finally help with the payment.

Any economist worth his salt should be able to figure this one out in his spare time. I had enough spare time.

Good bye and have a wonderful happy new year.

Related post: Saving Private Information.

Well, I don’t really know.

Infant or baby formula was developed in the developed world when women began to join the work force and did not have the time to breast-feed their babies. What a wonderful great invention it was. Convenience for the mother, and great nutrition for the baby.

Developed as an alternative to breast-feeding, the industry promoted it aggressively in the developed world. On the way back from the hospital after the birth of a baby, the industry gave as a “gift” all that you need to feed the baby formula—the bottles and the bottle bag–and gave just enough “free” formula so that the mother stops lactating because of lack of nursing. Once the mother goes down that formula road, there is no turning back.

Babies are important when it comes to profits for the peddlers of formula. But there are only so many babies in the developed world. For real profit, they have to tap into the babies of the under-developed world. All with the best of intentions, of course: to help the babies of the poor parts of the world because there is a “formula divide.” Why should only the rich “gain” from the wonderful benefits of baby formula?

So they aggressively began marketing it to the third world. The World Health organization estimates that around 1.5 million infants die because they are not breast fed and instead fed formula. How? Breastfeeding not only provides nutrition, but also provides immunity to the babies. Of course, for a baby whose mother cannot produce milk, formula is better than starvation. But often the mothers stop producing milk only after getting started on formula. The initial amount is given free to the mothers in the poor parts of the world and they are told that formula is much much better than breast milk. So when the free amount is over and the mother is no longer lactating, the formula has to be bought. Since it is expensive, soon the formula is severely diluted until the infant is receiving practically no nutrition and is slowly starving to death.

But even if formula were given free, there is still a problem. In the poor parts of the world, clean drinking water is a luxury. Dirty water used in preparing the formula lead to deaths through diarrhea. Feeding formula to third world infants exposes them to all sorts of diseases that arise from inadequately sterilized bottles and nipples.

>>>>>>>>>>>>>>>>>>>>>>>>>

About 30 years ago, there were no personal computers in the world. Anyone reading this will find it hard to imagine life now in a world without computers and the world wide web. One wonders how one could get along in those ancient times when there were no laptops and cell phones? Yet, the world developed well enough. If you think that there is a digital divide now, what do you think the digital divide was like 50 years ago when only a few research corporations and US government agencies had computers? Yet 50 years ago, people got educated, built productive economies, conducted business and got on with their lives.

The computers and the internet are wonderful things to have. They make life absolutely wonderful for those who can afford them. Actually, you have to be able to not just afford them and also be able to afford what it takes to make them useful, such as reliable power, broadband connectivity, good useful applications, a real world to which the applications are relevant, etc. And on top of all that, you have to be sufficiently trained to use them. It is really no use if you have a computer but there is nothing that you can do with it. But if for some reason, marketing hype convinces you that you need a computer to solve all your problems, you could end up spending money you cannot afford on things that are of no value to you.

>>>>>>>>>>>>>>>>>>>>

One Laptop Per Child is a MIT Media Lab project that is getting immense amounts of press. A sub-$100 laptop for every child in the third world and the digital divide will be a thing of the past, we hear. Sure it will. Just as formula will make malnutrition a thing of the past in the third world.

Given the perverse incentives, the peddlers of these laptops will make billions of dollars selling them to third world governments. As the MIT site says, “The laptops will only be distributed to schools directly through large government initiatives.” Large government initiatives, you bet. Why? Because people who have no money will not waste their money on laptops. Only government bureaucrats with large public purses at their disposal will buy these. The Media Lab people are not stupid.

The government officials will be handsomely rewarded for spending limited public resources in buying hundreds of thousands of these to make villages into “fully computerized” villages. A few trips to the US, a chance to speak at huge conferences on “Bridging the Digital Divide” sponsored by Microsoft, HP, Intel, and the Ministry of IT. Hundreds of millions of dollars which could have been more useful in providing primary education would instead end up in the pockets of hardware manufacturers and software giants. Sure a few children will become computer-savvy, but the cost of this will be borne by the millions of children who will suffer from a lack of education.

>>>>>>>>>>>>>>>>>

I know that one should not ascribe to malice what can be adequately explained as stupidity. Not everyone involved in the “laptop for every child” is motivated by greed; some are motivated by a zeal that comes from an inability to figure out what the problem is and how it can be most effectively solved. The operative word is “effectively.” You can always use a cannon where a fly-swatter is sufficient. But for the cost of a cannon, you can get a million fly-swatters which will be more effective than one cannon. Cannons are more impressive then fly-swatters, however, and that may explain their fascination with some people.

A blackboard and chalk is not as sexy as a laptop. In fact, a TV and a media player is pretty much all the hardware that you need to provide basic education to a village full of children. That hardware (and some free software) would cost all of $200 a year, and if you pay about $2000 a year as salaries to a couple of village school teachers, you can educate a 100 kids for about $20 per child per year. Compare that to just buying $100 laptops for each kid.

I am confident that the One Laptop Per Child will have the effect which is the educational equivalent of the nutritional disaster that imported formula has had on the poor parts of the world.

Yes, they do kill babies in search of profits. And yes, they will not care that millions of children will be denied primary education because they are focused on the profits to be made from selling laptops.

[There's much more here on the OLPC.

See this informative article "Breast milk or formula: making the right choice for your baby" from the Swedish Medical Center.]

Compared to someone sitting at home about 20 years ago, my access to information from within the comfort of my home is a few orders of magnitude higher. Hal Varian and Peter Lyman at UC Berkeley estimated that the rate of production of information was two exabytes, or two billion billion bytes in 2001. That information could take a stack of floppy discs about 2 million miles high. That rate must have gone up and I can reasonably assert that for this year we will need a stack 3 million miles high to contain all our NEW data. Thankfully we don’t use floppy discs and depend on hard-drives.

Talking about the total amount of information available, one would start sounding like Carl Sagan and say “billy-uns, and billy-uns.” Like the good astronomer saw galaxies by the billions, we too see pages by the billions, and like the galaxies, all these pages are in a very specific sense not personally accessible. They exist out there but it does not make any practical difference to us. So I distinguish between public and private information.

All those exabytes of information is what I call public information which is potentially accessible and constitutes the world wide web. What information you actually process is private information. How much private information you have matters to you, and not how much public information exists out there.

Information, like talk, is cheap. More accurately, public information is cheap given that there is so much of it around. The supply far outstrips the demand. But private information is not cheap. I propose this “Atanu’s Law of Information: Public information is a public good, and private information is private good.”

The process of converting public information into private information involves costs and that is what makes it valuable. The cost is primarily time. How much time you take to read a book depends on your ability to comprehend the written word of course, but the time to watch a movie or listen to a song is not compressible. Since time is a binding constraint in our case (we are not immortals), every action has an opportunity cost. As the process of converting public information into private information takes time, it has an opportunity cost and therefore there is a limit to how much private information you can have.

What are the operational implications of this distinction? First, it helps us understand that just because exabytes of information is publicly available does not suddenly solve our informational problems. Private information is what matters to a person. Processing this information efficiently requires skills that were not so acutely needed in the past. Our educational system has to fundamentally change in light of this new situation.

Second, we have more private information than ever before. Think of the huge number of pages that you have read and may need to refer to sometime in the future; of the thousands of pictures you have an interest in; of the songs and movies that you wish to keep and be able to locate sometime later; of the people you have met and need to keep track of; the list goes on. So the challenge is to manage that private information. And where there is a challenge, there is an opportunity for developing a solution.

So what do Yahoo, Google, and others of their ilk really do that is relevant to you? They manage some of your private information (media files, email, etc) and they also funnel some public information into your information horizon. This funneled information we can call “pseudo-private” and requires your processing time before it becomes private information.

Managing private information comprehensively is an art that is slowly emerging but a lot needs to be done. Fundamental opportunities exist out there. A glimpse is all that I am allowed to give you here. Think mobile phones. Mobile phones will morph into “private information access devices” and not something that you use to talk to your friends.

More to come.

OK, just to frame the question a little better, let me state that I recognize that prices depend on the underlying costs and on the degree of competition in the market. First, underlying costs. There are technical costs and there are statutory/regulatory/government imposed costs. Technical costs in India cannot be more than the technical costs in the rest of the world. Equipment costs approximately the same, modulo local taxes and import duties. Of course, average fixed costs vary depending on scale, and I do recognize that there are scale economies. So that is one factor that needs consideration: the scale of the operation. Perhaps the BB market is so small that some variant of average cost pricing makes the prices so high.

The non-technical costs need to be considered. First, there is licensing costs. That is a component of fixed cost. And then there are various taxes such as service taxes which add to the variable costs. If licensing costs are just what is required for funding the regulatory mechanism, then it cannot be all that high. But if licensing fees run in the several hundreds of thousands of dollars (or even millions of dollars), clearly then there is a different objective function that the government is attempting to maximize. Perhaps, and this is just a conjecture, the government is trying to maximize (short-term) revenues by imposing high licensing fees.

Just to continue along that revenue maximization line of argument, one way to extract rents is to limit competition within the market and make firms compete for the market by say auctioning the right to serve the market to the highest bidder,or just to have arbitrarily high licence fees and allow only those firms to compete within the market that successfully cross that barrier. This effectively raises the firms’ costs and therefore average cost pricing drives up the prices way above the world prices.

It appears that there is at least a limited degree of competition in the market. In Pune, I see Airtel, Reliance, Tata Indicom and BSNL in the internet access business. Their prices are remarkably similar. So unless there is collusion, their prices reflect underlying costs. It is certainly not marginal cost pricing (unless the variable taxes are extremely steep). It must be some form of average cost pricing and if so, the high average cost must reflect some high license fee because technical fixed costs (faced uniformly by all providers) cannot alone be high in India as compared to the rest of the world.

The question then so far is: what is the cost structure of the connectivity business? And how does it compare to the rest of the world.

The other matter I struggle with is: what is the objective function of the government? Short term revenue maximization? Like it attempted to do with the business of email service when it demanded outrageous license fees for the right to engage in that business, and later in the auctioning of the right to provide telephony in the various telecom circles?

If yes, then it is a very myopic policy. It hurts long-term growth of the internet in India and has serious second- and third-order impact on other sectors of the economy which could have efficiency and productivity gains from the use of the internet, such as education, commerce, and so on.

The larger the stock of information, the more expensive it is to search through it to locate the precise bit that is relevant at any particular instance. To make the task of searching more tractable, ordering the information in some fashion—called sorting—becomes paramount. Computer scientists have worked on the problem of sorting and searching for decades with phenomenally successful advancement in our understanding in this regard.

(Volume three of Donald Knuth’s magnum opus The Art of Computer Programming is devoted to Sorting and Searching. I did not get past the first volume on The Fundamental Algorithms, leave alone tackling the third volume in my graduate computer science courses.)

This is a continuation of my earlier piece on the age of superfluous information. I argue here that in post-industrial world and increasingly so in the future, sorting and searching through information will occupy the role that manufacturing did in the growth of the old economy.

The libraries of the world contain an ever-expanding stock of information, much of which is very rapidly being added to the humongous stock already existent on the world wide web. That stock is growing rapidly as the flow of information is turning into a flood as the internet spreads its tentacles into every nook and cranny of human activity. Billions of people today have access to information equivalent to hundreds of millions of books on the world wide web. Compare that to just a hundred years ago when the average human had access to half a dozen books worth of information at most. When taken to such extremes, quantitative change amounts to qualitative change. The world of information is not what it used to be. The challenges therefore are qualitatively different.

When the quantity supplied of any good is in excess of anything reasonably required or demanded, the variable of importance is quality. Basically a person’s information needs are really very simple. One can only read so much, listen to so much talk and music, watch so much video, and wish to know only so much about what is going on around in one’s neighborhood and in the world at large.

Here is the result of some simple arithmetic I did just now. I estimated the total stock of information available today. Then I divided it by the maximum rate at which information can be scanned by a human. The result: a person will take about 18 billion years to merely scan the information to exhaust the current store of information. At the current rate of increase of information (an accelerating rate, I might add), or flow, a person would require 44 additional years for every passing hour. Compare the 18 billion years to the current estimated remaining lifetime of the sun: a mere 5 billion years.

The bottom line is this: there is already so much information out there that even if no additional information were generated, each one of us could be occupied a little longer than forever to finish it. Information, as we well know, is a non-rival good. That is, my “consuming” a particular piece of information will not diminish the amount available to you. Compare this to a rival good such as food. Stock of food is enough to last the six billion humans for about 3 months. In other words, if we produce no additional food, all together humans would finish the stock in three months. Or, a single human can therefore finish this in 1.5 billion years. But it is not so in the case of information. Each of us would take the estimated 18 billion years to finish the information we already have before we ask for more.

Clearly, for an average human, about 0.00000000001 percent of the total information stock is more than enough. About 99.9999999999 percent of the available information is worthless. So how does one go about searching out the teaspoonful of useful information from the oceans of available information. That is the challenge and therein lie the opportunities. That is why firms like Google will make the big bucks. The opportunity is not so much in making information available but making the right information available.

Which brings me to the point which I started off with. Searching is only part of the story when it comes to information. The other part is sorting. If one can sort the information along some relevant dimension, then you have meaningful information. What is meaningful can only be defined in the context of the entity processing the information. From the same stock and flow of information, different entities define different subsets that are relevant and meaningful. This subset can be labeled private information as opposed to the vast store of public information. Private information is the top of the sorted list of public information. Internalizing the private information leads to what we can call a stock of knowledge associated with the individual.

It is useful at this point to remind ourselves of the distinction between information and knowledge. Information is a public good the stock of which is growing exponentially. Knowledge is a private good and its primary raw material is the private information which is a very vanishingly small subset of the available public information. Even though public information has no known bounds, there are limits to how much private information can processed by a human brain and thus there are limits to the acquisition of the private good we call knowledge.

Conflating knowledge and information is distressingly too common these days and so I would like to dwell on this distinction for a bit. Some say that today we have a knowledge economy. It is trivially true because it has always been a knowledge economy ever since humans evolved brains capable of processing information into knowledge and began using knowledge to organize and coordinate economic activities. What is novel is the unfathomably huge stock of information we have available today. What distinguishes one individual from another today is the capacity to figure out what is relevant information and to internalize it efficiently into knowledge. That capacity is one of the basic skills imparted by what we call education.

To summarize the story so far: from the vantage point of an individual, this is an age of superfluous information; only a tiny fraction is relevant and meaningful; searching through the information can be automated but efficiently sorting for relevance is a private skill; imparting that skill is a primary function of education.

Next time I will explore the role of education in an age of superfluous information.

Food, for instance, is a good that in excessive quantities is a bad as the success of the dieting industry so starkly demonstrates. Yet tens of millions poor people around the world dying of malnutrition and starvation every year is the horrible demonstration of the problem at the other extreme.

The same holds for information.

What brings all this to mind is the so-called information revolution occurring globally. Information is a good which is also subject to the law of negative marginal utility beyond the satiation point. Information overload can be as debilitating as too little. For much of the world now the problem is no longer a shortage of information but rather a surfeit.

All living beings acquire information from their surroundings for survival. Information needs vary depending on the nature of the being and the sense-organs have co-evolved to perform the required function. The more complex the entity, the more sophisticated the sense organs are. The sophistication has two dimensions: the bandwidth and the filter.

Higher bandwidth means that more information per unit of time is sensed by the entity. But the information gathered is filtered severely for relevance and only a small percentage is passed on to the processing unit (the brain) for internalization and for response. Therefore the filtering mechanism had to evolve in step with the evolution of high bandwidth sense organs.

Here is my conjecture. Higher intelligence is marked by possessing very high bandwidth sense organs (channel capacity), and a very sophisticated filtering system which rejects most of the inputs and processes only a very small portion of the total information received

We humans sense the world around us mainly through our eyes and ears. Most of the megabits per second of information we receive is rejected and only a minute fraction is processed by our brains. The filtering mechanisms developed over our evolutionary history and did so gradually. Even the brain has an inbuilt capacity to forget. There are a few who suffer from a pathological condition which does not allow them to forget anything that they have ever seen or heard.

Now we are faced with a world where information is being generated and accumulated at an exponentially increasing rate and we face the possibility of information overload that could overwhelm our capacity to filter and meaningfully process it.

Going back to the food analogy, for much of human history, we have been at the edge of starvation. Our bodies evolved a strategy of accumulating fat whenever it could. Now even though for many starvation is not a threat, their bodies continue to use the same strategy of averting starvation and it ends up as obesity. The external change has been too rapid for our bodies to evolve a different strategy. Therefore external agencies such as the dieting industry have evolved to protect us against the body’s internal mechanism.

I conjecture that the age of information dieting industry is upon us. The day is not far off when you would have to go on an information diet.

In the case of food, we do need an adequate amount of calories and that too the nutritional dimensions of the calories we consume matter. Sugars and fats have calories and we do need a sufficient amount of them but a diet of solely of sugars and fats is far from healthy. The information equivalent of sugars and fats is news. We do need news but if that is all we consume, we are likely to become information fat without being information healthy.

Allow me to speak personally, if you will. I have a very low threshold for news and information. In the US, my major source of news was the radio. In India I don’t have that luxury. I don’t have a TV at home. So much of the little news I get is from off the web. Random surfing occasionally is sufficient for me to get to know about the big events. Blogs are a rich source of information. I don’t read newspapers because I believe that anything that really importance which is reported in the papers, I will get to know eventually; and anything that is trivial (which is about 95 percent of the newspapers), I will not miss anyway.

It takes me a long time to process information into knowledge and understanding. I cannot read five books a week. There are books on my bookshelf which I have been reading for the last four or five years and I still have not read them all the way through. Not that you asked but just for the record they are: “A Theory of Justice” by John Rawls, “Thinking about Development” by Paul Streeten, “Contemporary Political Philosophy” by Will Kymlicka, just to name a few. I might read a page or two and then it would take me hours to comprehend what I had read. Then a few months later, upon re-reading the same pages, I realize that now I really understand. Only after a three or four passes, do I think that I fully internalized an idea. It is an excruciatingly slow process for me. Perhaps I am not alone in this. I read somewhere that Robert Solow requires three readings before he can comprehend an idea. And he is a Nobel prize winning economist.

Time-out for a joke. Two guys were talking. “So what are you going to do now that you are retiring?” “Well, I was thinking of finishing my book.” “You are? I didn’t know you were writing a book!” “Who said I am writing a book? I am reading one.”

I am almost as bad as that guy when it comes to reading heavy books. The light stuff such as “Freakonomics” I can read in a few hours. But enough of this digression. Back to the topic at hand. What is it going to be like to live in a world where information is cheap and over abundant? What sort of services will emerge which would help people cope? There is a challenge of managing information and therefore there are opportunities for firms that will help you reject information in an age of superfluous information, just as there was a challenge of bringing you information in an age where it was scarce.

Those questions I will ponder about the next time.

Post Script: The topic is continued here.

Related Post: The world is information fat and a followup.

Uday wrote in:

As usual, a thought provoking article that makes me periodically check this blog!

Now don’t go thinking that I bribed Uday into writing that.

I would like to question the validity/implications of 4, 6, and 7.!

For reference, here are those points:

Fun Fact #4: Regarding the quality of information online: as the quantity is increasing, the variance is increasing and the average is decreasing.

Fun Fact #6: The cost of identifying the information is going up.

Fun Fact #7: The cost, therefore, of obtaining knowledge has gone up.

As we all know search efficacy has been taken to new levels by Google; and Inktomi/Yahoo! and MSN are not slacking off either. I wonder if you are implicitly questioning the limitations of the ranking algorithms used by these companies. As the amount of information increases by leaps and bounds, the total quantum of search results for a particular phrase will keep increasing proportionally. But I would suppose the key challenge is to rank order the search result — after all, how many people go beyond the first few pages of any search result?

My claim in #4 is restricted to the average quality and the total quantity of information available, with the former coming down and the latter increasing exponentially. Naturally the good stuff is harder to find. Even if the search is aided by Google with their admittedly excellent page ranking algorithm, the results can be less satisfactory than if the search domain was restricted as it was earlier when there was less information overall. My unsubstantiated claim is that the combined effect on the average quality of information of increased volume (negative) and more efficient search engines (positive) is on the whole negative.

Put another way, would their ever be a real need to sift through information that is ranked beyond the top 50, or, would a person be better off refining the query to zero-in more effectively on what was sought. I believe it is the latter; hence the amount of information should not affect the quality of refined queries. But yes, refined queries will be increasingly needed to substitute coarse and aggregate ones.

I agree that a refined search would yield a more accurate result, of course. But that refining the search is exactly what I mean when I say that the search costs increases.

The explosion of consumer choice is a good thing, overall. But there are implicit costs associated with choosing from a large menu as opposed to a limited but excellent menu. The implicit costs include a more discerning consumer.

I contend that this is an “intellectual” cost. It will be simplified for the masses if leading edge companies can provide intuitive means to elicit query refinement. i.e., an important question is how the search companies could provide artifacts beyond the existing ones to allow users to phrase their queries better and obtain exactly what they seek. Google for one has done tremendously well on such aspects. Google suggest completes search phrases before they are completed (offering suggestions), the “:” prefixes are extremely handy and work very effectively, the seamless carry over of context to news, images, local etc. are so convenient. I don’t know if I am missing your point Atanu, but I reckon that bright engineers have hit upon very good metaphors to enable searching for exactly what you seek. I grant that these tools can be expanded upon, and are taken for granted by the programming savvy; if and how the larger population can effortlessly imbibe these skills depends on !
the user interface exposed and the rate of exposure (so as to not intimidate the consumer base).

I don’t think you are missing my point. We are merely working on different sets of assumptions. The object of a search is to find something that you by definition do not know. Therefore the best you can do is to define the boundaries of the search. Having defined the boundary, all else remaining the same, the denser the information set, the more numerous will be the result obtained.

Another question is whether people in general have communication skills to express exactly what they seek. It is very instructive to look at some of the results on Google Answers and look at what the experts searched on to provide the answer. People seem to be all over the spectrum when it comes to the ability to express their needs smartly and succinctly. As with most things in life, yet again, we realize the 80-20 rule J

In my conjectures in the piece, I was working with averages. My contention is that the sophistication of the average consumer may have not improved significantly, and that the variance is increased. Therefore the conjecture that on average, finding information is more costly now.

Finally, would you have any stats or thoughts on what proportion of the growth of the information is on largely “new” topics and how much represents “accretive” bloat? This is surely an ill-formed question because the definition of ‘new’ and ‘accretive’, in this context, are themselves fuzzy.

Excellent point. New topics would have lower aggregate information and therefore will have greater average quality and lower variance. They would not have time to have what you call accretive bloat. I think there may be some equivalent of Zipf’s Law (Rank-size distribution) which may shed some light on how the growth of information is distributed among topics that are new as opposed to old.

Imagine that each topic is ranked from the most recent to the most ancient. Associate with each topic the total amount of information available and a bit of regression analysis will yield the exact law.

[Disclaimer: I don't work for a search company, and may be demonstrating gross ignorance of progress in the area].

Hey, my ignorance will leave your ignorance in the dust.

Go back far enough in time and you will find that we are related to not just the apes and anteaters, but to all living things from the giant sequoia to the squid. These are the physical connections in the biosphere. At the abstract level, it is also connected. Pick up one any topic — however little and circumscribed — and you will find that it is related to another topic. You cannot study anything in isolation because the underlying reality to which it corresponds is not isolated.

And here is what I am going on about. What is the reason for the unreasonable success of the world wide web? The world wide web is an analog (although somewhat crude at this stage of its development) of the real world (TM). The real world, like the abstract world we study, is a web of relationships. The success of the world wide web is due to its ability to reflect that underlying connected of the world of things and ideas.

What flows though the internet is information. Like the nervous system of a living body, the internet carries information that is critical for the continued existence and stability of the organic entity we call the world wide web.

To fully comprehend the world we live in, we have to appreciate the connectedness of the world. Any educational system which does not appreciate that connectedness and therefore does not emphasize that fact through the way it teaches about the world, is failed to the core. Until now, there was some — only a very minute though — justification why education involved the delivery of isolated disjointed unconnected facts. Perhaps it was really very difficult to put history and phyiscs and social studies and every other topic into one book. Now that reason cannot be cited anymore for the fragmentary method of delivering education.

Technology with its powerful tools for presenting hyperlinked rich audio, video, textual and graphical content is available and affordable. It can edify and entertain and educate with fascinating ease. Here is a brief history of the United States, for example. It would have to be a very dull and uninterested student who will not gain a good deal in those 10 minutes of watching that animated history. This little module can serve as the index to a whole range of interesting topics, for slavery to war to agriculture to migration. (Do take a few minutes to check out that link.)

There are great and wonderful things out there in the web which can be used to provide a complete education. All you have to do is aggregate all the content, the tools, the collective wisdom of many thousands of great teachers and educators, and make it available to students in schools and colleges across the nation. It is not expensive at all: at most a couple of hundred rupees a month per student. But the results will be to create a class of educated kids who would not only be smart but also understand the magical world we are lucky to be in.

If you come to think about it for a moment, what we really want is knowledge, not information. (Recall what the business school guru said: what people want is not a quarter-inch drill but rather a quarter-inch hole.) The good news is that there is a lot of information out there. The better news is that the cost of accessing that information has been dropping exponentially. But the bad news is that the cost of searching through the vast stock of information to satisfy your knowledge needs is increasing.

First a brief aside on the distinction between knowledge and information. People use the terms interchangeably but they must be distinguished if we wish to reason with some degree of clarity about our information-suffused modern society. A telephone book has information about names and numbers, but it does not ‘know’ telephone numbers. A human brain ‘knows’ a phone number, in contrast. Outside the human brain, it is information and organized within the structures of a human mind, it is knowledge. Dr Johnson appreciated the distinction very keenly. Information is what economists call a public good, while knowledge is a private good. This has important implications which need not detain us right now.

Back to the good news about information. Here are some fun facts about information.

Fun Fact #1: There is a heck a lot of information in the world today. The stock of information is stupendous. Naturally so because human activity primarily produces information. The increased production of information has been intensive and extensive.

Intensive because more of what we do is recorded, whether in government files, in private sector databases, or in your own record of your private life such as in blogs and photo albums, and so on. You have lots more bits of information associated with you than was associated with your ancestors.

Extensive because first there are more of us on the planet today, and second, because more of us are doing stuff that produces more information. A much larger percentage of our six billion human population is engaged in generating and processing information than before. Millions of researchers and scientists do stuff that generates truck-loads of information. Commercial, governmental, and personal information grows unbounded.

Fun Fact #2: A heck of a lot the available information is available online. Some of it is on the world wide web accessible through the internet, while much of it is in the deeper web not generally accessible to the average web surfer. As time goes on, a greater percentage of the total stock of information will be online.

Fun Fact #3: The stock of information is increasing exponentially. And consequently, the stock of online information is also increasing exponentially. Exponential increases are fairly dangerous things. This is a not-so-much fun fact we will come back to bite us. Flow (increase in the stock) of information is threatening to become a tsunami.

Fun Fact #4: Regarding the quality of information online: as the quantity is increasing, the variance is increasing and the average is decreasing.

Let’s just focus on books although we could as easily tell a similar story about movies, or books, or research papers, or photographs, or blogs, or usenet postings. A century ago, there were very few books published compared to today. Given the high cost barrier of publishing, only those works which had some enduring quality made the grade. Therefore the average quality of available printed matter was high. Today, there millions of titles are published because of both greater supply (more writers) and greater demand (more readers), and because the cost of publishing (relative to average incomes) has fallen. The quality of the average book, I believe, is lower than before.

It is my contention that the best book of today is better than the best book of yesterday, and that the worst book of today is worse than the worst book of yesterday. Just a hunch and I don’t have hard data to support this hunch.

Allow me to make a hand-waving argument about quality and quantity. Let’s take photographs. When I used an analog camera (print or slides), I used to take a lot fewer pictures than I do today with my digital camera. But I rejected a lot lower percentage of pictures in those analog days. Today, I throw away most of what I take with my digital camera but I end up with much higher quality “best pictures” than before. Taken as a whole, my digital pictures are on average “lower quality” because I click a lot of pictures with greater abandon today given the low average cost of each click.

Greater variance and lower average quality coupled with an immensely larger stock leads us to the bad news about today’s information age. But first, a few more fun facts.

Fun Fact #5: The cost of accessing information is going down.

Let’s just say “google.” Enter some keywords and you will get about four million hits, give or take a few million. Marginal cost to you: nearly zero (assuming that you have a connected computer at your disposal.)

Another way of putting this is to say that the “channel capacity” has increased. The information can flow through to you through a vast pipe if you need it.

Fun Fact #6: The cost of identifying the information is going up.

So you do get four millions hits in less than 0.4 seconds when you do that search on Google. But, unless you are very lucky, or have been very clever in specifying the search, it will take you a lot of time to sort through it all to find the information you need.

For any given stock of information, the lower the average cost of accessing the information, the higher the search cost for any specific required information. Here I would like to enunciate what I call the Information cost complementarity principle: for a given cost, quality and quantity are complementary. You can have high quantity but will have to put up with low quality; or you can have high quality but it would cost you. (Compare with the folk wisdom: “Good, fast, cheap: Choose two.”) Another way of putting it: the cost of searching and cost of sorting through the results of the search are complementary.

I model the principle after Neils Bohr, the father of quantum mechanics. He stressed the importance of the complementarity principle and held that it has wide applicability in areas far removed from physics. The principle says that knowledge of one aspect of a system precludes knowledge of certain other aspects of the system. (Ref: Steven Weinberg’s Dreams of a Final Theory, pg. 74.) Heisenberg’s uncertainty principle is an instance of the complementarity principle: absolute knowledge of a particle’s position (or momentum) precludes absolute knowledge of the particle’s momentum (or position.)

Fun Fact #7: The cost, therefore, of obtaining knowledge has gone up.

Recall that we really are not interested in information for its own sake; we are interested in knowledge. Being given four million hits in return for a search is about as helpful as being thrown both ends of a rope when one is drowning.

The claim that the cost of knowledge has gone up simultaneously with a dramatic decrease in the cost of information is clearly counter-intuitive. Counter-intuitive but consistent with the facts. Low quality information is cheap. That leads to what I call “information obesity” and is inconsistent with “knowledge health.”

For all of our evolutionary history, food was not easily available and so we have evolved to subsist on a low calorie diet. Suddenly (in evolutionary time-scales) in developed countries, calories are abundant because low quality high-calorie foods are cheap. High quality low-calorie foods are expensive. So the poor in rich nations such as the US suffer differentially more than the rich from obesity. This is in contrast to poor nations where the rich are obese. Obese people are calorie-rich but health-poor.

I contend that one can be information-rich and knowledge-poor. And further that in an information overloaded society, the poor people will be information-rich and knowledge-poor, and the rich people will be information-poor but knowledge-rich.

After all this talk, let me come to the point that I want to make: There is a big opportunity managing information overload. Create a filter which will let only the top quality information through and people will beat a path to your door. You may say that it is a Super Filter which filters out not just spam but low quality non-spam content as well. In the past, portals which gave you everything (when there was not very much of anything) were a big hit. Now (when there is much too much of everything) portals which give you access to absolutely selective exclusive stuff will make it big.

In one specific area — education — I have figured out how to manage the information overload problem. Perhaps we should talk about it later. Or perhaps not.

Follow-up Post: The Age of Superfluous Information and The World is Information Fat Followup.

It is a common failing. I call it the If-only-lord-if-only syndrome. If only I had x (where x could be money, power, status, gizmos, etc.), I would be y (where y could be happy, successful, good, etc.) Often enough, x is something that is relatively easy to obtain but does nothing towards the goal of y. Sometimes, after obtaining x, one realizes that y is still out of reach. Then wisdom dawns and one realizes that it is not that x leads to y, but rather y leads to x.

Bertrand Russell was very wise. He claimed that “the happy life is the good life. By that I do not mean that if you are good, you will be happy. But rather that if you are happy, you will be good.” Worth pondering, isn’t it?

The use of high technology (x) is highly correlated with high degree of economic growth and development (y). Correlation, as economists never tire of reminding one, is not causation. Furthermore, even if there is causation, the direction of causation is not always obvious. Two variables x and y may be causally linked; but does x cause y, or does y cause x, or are they two connected through some other hidden variable z?

I am sitting in the University of California at Berkeley. (Hi from Berkeley!) The campus is full of high technology tools. Compared to what UC Berkeley has in terms of computers and bandwidth, the campus of a typical Indian university (Nagpur University, for instance) has very little. So it is tempting to believe that if Nagpur Univ were to be equipped with all the electronic gizmos and Internet bandwidth, then it too will attain the level of a UC. But that is patently absurd. What makes UCB is not the hardware (electronic or otherwise) but human and institutional capital. Human and institutional capital is what matters, not hardware. Just to drive home that point, Nagpur University in 2005 has more electronic hardware and internet bandwidth than UC Berkeley had in 1980. Yet, the capability of UCB(1980) far exceeded that of Nagpur University(2005).

It is not how much hardware or software or information one has that matters; what matters is what you do with it. And what you do with it depends on you and not on the thing. An inept author will not suddenly start writing masterpieces even if equipped with the fanciest word processing software. People will not suddenly become knowledgeable just because they have all the information of the world wide web at their finger-tips.

The $100 laptop being touted by some as the holy grail that will emancipate the poor all over the globe is a striking example of the silliness that pervades the development community. But more about that later.

It took the PC-centric computing model 20 years to have a 700-million
user base. In less than five years, the network-centric computing
model could get the next billion users—if the industry wakes up.

You see, CJ is an old friend of mine who lives in Berkeley, California. What the heck would he be doing in the lobby of a hotel in Bhopal, however nice the view of the lake? As it turned out, he too was attending the conference since he was in Delhi and Bhopal was just a short flight away.

CJ is a vagabond and what he uses for money has been a bit of a mystery to me. He likes the good life. If you have been following my scribblings, you may have already come across him in “Do the Taliban have Buddha Nature?”. I like hanging out with CJ because he is a contrarian.

We ended up having a beer at the restaurant that evening.

“So, CJ,” said I, “what’s new in New Delhi?”

“Nothing new. Same old crap. The fog is something terrible. Of course, the bunch of blinkered retards that rule India haven’t figured out that fog is an annual phenomenon. Otherwise they would have installed appropriate equipment at the airport for flights to operate.”

CJ is not a fan of politicians and bureaucrats.

“India has bigger worries than how to operate flights in the Delhi winter fog, you know,” I said. “All the politicians and bureaucrats and NGOs are worried about the digital divide. At this very conference, we are addressing the problem of development using ICT.”

“Digital divide is crap,” CJ responded.

“Well, the Minister for IT doesn’t seem to think so, for your information, CJ. In fact, they are going to make broadband available cheap for the common man,” I said.

“Digital divide is crap,” CJ repeated.

I pulled out a newspaper. “See this item here, CJ, The Broadband Village . It says here: “A village where everyone has easy access to information on agriculture, education, drinking water, electricity and health.” Thousands of such high tech villages will be the norm in two years. How? Through the magic of broadband and PCs. No more digital divide and no more underdevelopment.”

CJ read the article and declared, “That article is more full of crap than the toilets of an Air India jumbo after a transatlantic crossing.”

I was starting to realize that there was going to be a theme to our discussion. Crap. I have amazing powers of premonition, you see.

“Information is good, is it not? So if all villages have information easily accessible to them, surely it would help, wouldn’t it?” I countered.

“Sure, information is good. But what would you rather have? Information on education, drinking water, electricity and health or education, drinking water, electricity and health? These buffoons are probably stupid enough to think that handing out a menu card to a starving poor man is a great substitute for providing him a decent meal. What good will information about water do for them? It is not information on water they lack: they lack water. It is not information on electricity they lack: they lack electricity.”

I said, “Well, they are bridging the digital divide and once that divide is bridged, the rest will fall in place.”

“Perhaps there is a digital divide and maybe someday one should bridge the digital divide. But if you don’t bridge the real divides, no amount of bridging the digital divide will amount to squat. Remember that real resources diverted to bridging mythical divides are not available for bridging real divides.”

“Real divides such as what?” I asked.

“The Crap Gap,” he said. “Crossing the crap gap is more meaningful than bridging the digital divide.”

Like I said, I had a premonition. I allowed him to elaborate.

“Sanitation and clean drinking water are problems that are real and will have a greater impact on the lives of people in urban and rural India than giving them access to information and installing internet kiosks. If you provide them with just those two, you would improve their lives much more and they will suffer much less from diseases. A glass of clean drinking water will help them more than information on the internet about health. A decent place to crap in would help the women in urban and rural areas more than surfing the world wide web.

“Think about this. What would you rather have: access to clean drinking water or access to the internet? Would you rather have an internet kiosk or would you rather not have to go and take a crap on the train tracks in Mumbai? I bet you dollars to donuts that given the choice, every time you would choose a clean glass of water and a decent toilet.

“Drinking water and sanitation has been a greater divide than the digital divide and for much longer. No conferences are held on sanitation because it is not “high-tech” and those who attend these digital divide conferences don’t have the imagination to realize that human dignity is more important than the ability to surf the web.”

I was really not in the mood for more of this talk about crap. “Sure I would take a toilet over a cybercafe any day of the week. But the poor need information access as well,” I said.

“Yes, they do. But we must remember that people need health and dignity as well to live a decent human life. The sequencing of interventions is important. Do the most urgent thing first. Partly it is sheer greed that motivates the bureaucrats to try to bridge the digital divide because there is money in the purchasing of PCs. But partly it is also a basic failure of imagination. A failure to empathize with the lot of the poor. The people who attend these shindigs have toilets and they have PCs and they cannot imagine that toilets are more important than PCs. But give them a choice between WCs and PCs, and you know which one they would first run towards.”

Well, that was it then. The next day after the conference he went off to Delhi and I made my pitch on “The WC Divide Trumps the PC Divide: Why Crossing the Crap Gap is more Important than Bridging the Digital Divide.”

{ Acknowledgement: Originally I had used the phrase “crap chasm” but as Frank pointed out, “crap gap” is more appropriate. Thanks you, Frank, for the suggestion.}

But the opinion that ICT will magically transform economically backward regions is widely held. In fact, I am persuaded that precisely because it is a widely held belief that one should start to suspect it. Bertrand Russell warned:

[T]he fact that an opinion has been widely held is no evidence whatever that it is not utterly absurd; indeed in view of the silliness of the majority of mankind, a widespread belief is more likely to be foolish than sensible.

Anyway, I struggle on. It is a futile endeavor, like mud-wrestling with a pig — it is a waste of time because you cannot win and the pig enjoys it. Or even, to put it another way, like trying to teach a pig to sing: it cannot be done and it annoys the pig.

“My uncle died sadly due to his habit of drinking tea?”

“That’s amazing! I have heard of people dieing because of alcohol. But tea?”

You may think it’s funny. But wait till you see the conclusion drawn from the following. This is from a report by my friend Priya Ganapati of rediff.com:

Jhunjhunwala cites a case where an email was sent to a number of government officials including the chief minister about a possible breakout of the small pox epidemic in a certain area.

Though the email was ignored by many, it finally did reach the right official and prompt administrative action to prevent the epidemic was taken.

“In Attapatti village, Veermani, a man with disabilities was unjustly dismissed from his job. He wrote an email to many government officials, one of whom finally took note and he was reinstated,” Jhunjhunwala points out.

You may not believe it but one is supposed to be persuaded that the above examples argue for IT-enabling of Indian villages. A moment’s consideration is all that is required to see that the conclusion is as asinine as blaming tea for the uncle’s release from this mortal coil.

If you substitute postcard for “email” in Priya’s report, then obviously the conclusion would have to be that what is required for rural development is a postal system. But wait!! We do have a postal system, don’t we? So what exactly does an email do that a postcard does not do?

Someone should clue these people in: emails and postcards are the means of conveying a message. Emails don’t suddenly make caring people out of apathetic government bureaucrats. The failures of government is not a technological failure and producing technical fixes for that is as effective as casting spells to fix a broken car.

One may say, “Well, emails are faster. And you can send it to a zillion officials.” Sure, you can. But so when everyone and his brother is sending a zillion messages to thousands of officials, the officials will also learn to file those emails under “T” for trash. You would be back to square one with the only difference being that money that could have helped with development ends up in the pockets of Bill Gates, HP, and Intel.

The bottom line is very simple. We need to ask where the failure is in the above examples. Then figure out a solution. And if in that solution we find that the use of IT tools is cheaper than any other method, we should use IT tools. Until then, all who are IT-trigger happy should sit on their hands and contemplate the universe.

{Deja vu? Indeed, this one is recycled }

Consider this. BBC News on Sept 3rd 2004 carried an item: Solar plan for Indian computers. Some excerpts:

Authorities in the Indian state of Uttar Pradesh have drawn up a pilot project to use solar power to run computers in village schools…

Many have to use kerosene lamps for light and most government-run primary schools have no power at all.

It is hoped the plan will help schools cope with the rural power crisis.

Last year, the Uttar Pradesh Education for All Project Board bought about 1,000 computers for selected primary schools in all 70 districts.

The schools were selected in villages which had no power lines, and teachers were given special training for computer-aided education.

Consider the typical village school in UP: totally strapped for resources, teacher absent most of the year, perhaps not even a blackboard, students unable to afford books and most likely malnourished. Why, one asks incredulously, would anyone be spending money on computers when there are more important needs that are crying out for resources?

The report goes on to say:

A further 1,000 computers are to be purchased this year for village schools, but most of these will not work because there is no power available.

The mind boggles at the waste of resources which a poor state can ill-afford. Funds for rural public education are severely limited and yet they are wasting it buying computers that will serve no apparent purpose. These funds could have been used more effectively in paying teachers living wages, buying supplies such as books and blackboards, perhaps food for the starving students. Why?

Here is my explanation. Some time ago, I had pondered the question of why telephones, radio, and TVs don’t make the conference circuit. The vendors of PCs have an incentive to push their wares and they are a powerful lobby. Couple that with the avarice and corruption of the “authorities” mentioned in the BBC report, and you have the answer. When tens of millions of rupees are spent in bulk purchases of computers, there are kickbacks. The authorities make their pile, never mind that the computers end up being expensive non-functional display items in the villages without power.

But wait, it gets better. No power for computers? No problem: use expensive solar power to power them. And you will find the vendors of solar power panels eagerly getting into the game of rural development. They make hay while the sun shines.

It is disgusting, all things considered. Last Friday I made the mistake of driving about 10 kms on Mumbai roads. It took an hour and a half. We were stuck at a T-junction for about 20 minutes because of a deadlock. Vehicles had moved into the intersection and there was no way any vehicle could move. I had described a similar situation earlier in a post entitled Seduced by ICT:

Recently I came across a news item which said that they are looking at solving Mumbai’s traffic problems by making Mumbai roads “electronic intelligent roads.” I don’t have the slightest doubt that it would involve huge outlays to the tune of millions of dollars and lots of people will make lots of money up and down the line providing expertise and hardware and software for this hi-tech venture. I am also convinced that it will not make the slightest effect on the congested Mumbai roads because it is not the roads that need the intelligence but the people designing the roads that need to be intelligent.

Close to where I live in Kandivali, a suburb in North Mumbai, there is an intersection that is almost always caught in a grid-lock. The intersection is like an “H” with bi-direction flow of traffic along all the sections and it has one traffic signal at one of the points where the horizontal section meets the vertical sections. Traffic gets log-jammed around 300 meters of this intersection and it takes about a half hour to cross this bit every evening. Hundreds of autorickshaws, buses, cars, trucks, two-wheelers, and whatnots spew exhaust fumes and honk continually and people suffer. It is astonishing that the traffic people have not figured out that the simplest thing to do would be to paint some part of this intersection with the “KEEP CLEAR — DO NOT BLOCK” sections and put a couple of traffic cops to teach the people to keep off these sections. It would be a simple effective system which would cost very little compared to the enormous price that everyone pays throughout the day due to the congestion.

Instead, the Mumbai municipal corporation is investigating ways of using electronics. Why not better road markings and so on? Because there is not much money involved in a simpler but more effective system. Simpler may be better but there is not much profit in it. A blackboard, a teacher, and a dozen slates and some chalk may be simpler and better for adult education, but there is not as much profit as in putting PCs with literacy programs to teach adults how to read in rural areas.

That is all there is to it. Expensive solutions are proposed because those in control of the spending benefit. This is a universal phenomena, not restricted to poor overpopulated corruption ridden third-world people. Doctors in the US freely sometimes recommend unnecessary heart-bypass surgeries instead of recommending life-style changes. They make more money performing by-passes and don’t make any money if the patient changes his life-style.

The power of incentives is awesome. Look carefully at the roots of persistent poverty and you will see that someone makes money and therefore it is in the interests of the person to perpetuate that poverty. This is not even limited to the economic sphere alone, of course. Mother Teresa’s goal was religious glory and her incentive was therefore perpetuation of overpopulation because people are the fodder that the church feeds on. Is there a way out? I think there is. Stay tuned.

Take for instance a website such as number27. You can spend so much time getting informed and getting entertained at the same time. Check it out sometime. [Thanks to Sonal's blog for the link to number27.]

This week, I would like to address myself to that question in detail. The answer can be succinctly stated as: It reduces transaction costs. It will take a pretty long time to explore that answer. But first a few personal experiences to set the stage would be appropriate.

Today I called up a local store which sells “white goods” (major appliances such as washing machines, etc.) I wanted to order an air-conditioner. Could I order the AC over the phone, I asked when the phone was finally answered by someone. I was told that I had to come down personally and bring cash. Will they accept a debit card? No. Will they deliver today? They can’t tell me that until I had paid and only then will they check to see if the department that does the delivery has the capacity to deliver today.

I drove to the bank to withdraw the cash. At the bank, the line for withdrawing cash was immensely long. I could not use the ATM because the amount I needed was above the ATM cash withdrawal limit. It took me a half hour before I had the cash in hand.

Next step: drive to the store. The closest branch was in Shivaji Nagar. I told the driver the address and we proceeded to drive the four or five kilometers to the store. It was on ‘L.J.’ road. The traffic was bad, as usual. The driver did not know where L.J. road was. We asked for directions from various taxi drivers. We traveled with hope thinking that this time the directions were right. In about 45 minutes, we had reached the store. It was closed because that branch of the store is normally closed on Mondays. I could not have found this out without going to the store. This was in Mumbai, the commercial capital of India.

I had spent about 2 hours in trying to buy something that in a different setting (for instance in California) it would have taken me all of 5 minutes and that too from the comfort of my home: I would have checked the prices of ACs on the web and ordered it online and paid for it with my credit card. Instead, after about 2 hours of frustration, I was still without what I wanted.

This little episode is indicative of a depressingly large set of similar experiences. The features of this set almost always include having to spend an inordinate amount of time searching. The search cost of locating a place is non-trivial. Street addresses don’t exist. You could be looking for a place with an address with reads “122/1/B Lajpat Nagar II”. You reach 121/1/B. And then you discover that 122 is not adjacent to 121 but is somewhere else altogether. Sequential numbers are not physically close. The house numbers are in the order in which the plots were registered, for instance. Once I spent about an hour hunting around for a place in Lajpat Nagar in Delhi. I am sure that I was not the first — nor I was the last person — to waste time and energy (gasoline) trying to locate an address there.

Another feature common to all the episodes includes transportation. On Saturday last, I was invited for dinner at a house that was about 5 kilometers (3 miles) from the Andheri local train station. I took a bus from the station. It took about 50 minutes for the bus to cover the 5 kilometers. Traffic moves about 8 kms an hour in the city of Mumbai, and at the breakneck speed of 18 kms an hour average on the nation’s highways.

Traffic is not the only thing that is slow. The movement of payments is an important function in any economy. I had to pay my brother Rs 25,000. I mailed him a check to Nasik without asking him first. He called to say that it will take about 3 weeks for that check to clear and so it would be good if I could send him cash or do a wire-transfer.

Cash is inconvenient to handle and carrying large sums is stressful. For furniture shopping, the only acceptable form of payment appears to be cash. Part of the reason is of course tax avoidance. But the slowness with which checks clear could have something to do with it as well.

There are a few things that one can do at a macroeconomic level to push the economy towards its potential such as fixing the monetary and fiscal policy. But they are limited instruments. Fundamentally, what really puts the brakes on the machinery of the economy is a very large number of very small grains of sand which are individually ignored but together form a very potent force. These grains of sand arise from what can only be said to be the overall culture of the economy.

It is an unfortunate fact that the Indian “economic culture is dismal and unless that changes, India’s economy cannot reach its potential. Becoming aware of the problem is fundamental to the solution, of course.

In the next piece, we will explore what ICT can do to remove the sand from the Indian machinery.

[Continue reading part 2 of "It is transaction costs all the way".]

He made five cautionary points which are worth noting. They are:

• Do not get seduced by ICT
• Localize, localize, localize
• Do realistic cost projections
• Given the complexity of systems, choose operators with extreme care
• Be patient

The use of ICT tools for development is a no-brainer. But it is a mistake to think that a Pentium4 in every village will solve India’s developmental problems. The point one has to pay special attention to is to examine the entire set of ICT tools and then choose ones that are appropriate to the task. Information and communications technology tools are not limited to PCs and internet connections. There are many other tools such as radio (both FM and shortwave), ham radio, and TV which may be more cost effective and relevant in a given context.

Recently I came across a news item which said that they are looking at solving Mumbai’s traffic problems by making Mumbai roads “electronic intelligent roads.” I don’t have the slightest doubt that it would involve huge outlays to the tune of millions of dollars and lots of people will make lots of money up and down the line providing expertise and hardware and software for this hi-tech venture. I am also convinced that it will not make the slightest effect on the congested Mumbai roads because it is not the roads that need the intelligence but the people designing the roads that need to be intelligent.

Close to where I live in Kandivali, a suburb in North Mumbai, there is an intersection that is almost always caught in a grid-lock. The intersection is like an “H” with bi-direction flow of traffic along all the sections and it has one traffic signal at one of the points where the horizontal section meets the vertical sections. Traffic gets log-jammed around 300 meters of this intersection and it takes about a half hour to cross this bit every evening. Hundreds of autorickshaws, buses, cars, trucks, two-wheelers, and whatnots spew exhaust fumes and honk continually and people suffer. It is astonishing that the traffic people have not figured out that the simplest thing to do would be to paint some part of this intersection with the “KEEP CLEAR — DO NOT BLOCK” sections and put a couple of traffic cops to teach the people to keep off these sections. It would be a simple effective system which would cost very little compared to the enormous price that everyone pays throughout the day due to the congestion.

Instead, the Mumbai municipal corporation is investigating ways of using electronics. Why not better road markings and so on? Because there is not much money involved in a simpler but more effective system. Simpler may be better but there is not much profit in it. A blackboard, a teacher, and a dozen slates and some chalk may be simpler and better for adult education, but there is not as much profit as in putting PCs with literacy programs to teach adults how to read in rural areas.

PCs have powerful lobbies to promote their use. Chalkboards, radios, TVs, etc, don’t have that. Put it this way: the manufacturers of expensive shiny new hammers need people to be convinced that every problem is a nail and that everyone should have a shiny new expensive hammer. Never mind that sometimes a rusty screwdriver is better at a particular task than a shiny new expensive hammer.

HP, Microsoft, Intel and others of its tribe have to keep pushing their products. For impoverished people who can barely afford food, finding the most cost-effective solution is more important. But doing that involves much hard thinking and for those who make the decisions, there is not as much money in it. So the poor get saddled with expensive but ineffective solutions.

I should hasten to add that I am not a Luddite. I don’t need to be convinced of the extreme utility of computers and connectivity. Not only am I a user of these technologies, I have studied computer science and have worked for computer corporations. Some of my best friends are computer geeks (there but for the grace of god go I.) My concern is that PCs and the internet are crowding out the other more effective technologies that could help India develop.

————————————

Here is something entirely different. From The Scottish Himalayan Expedition by W.H.Murray:

Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative (and creation), there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamt would have come his way.

I have learned a deep respect for one of Goethe’s concepts:

Whatever you do, or dream you can, begin it.
Boldness has genius, power, and magic in it.

————————————

Made the mistake of flying Indian Airlines. What amazes me is that in the past few years I have never been on an Indian Airlines flight that actually departed or arrived within a half hour of its scheduled time. They suck the chrome off of a bumper of a 1960s Chevy parked 40 yards away. Arrived in Hyderabad nearly two hours late after an hour-long flight. I got a bit tired of their tardiness when on the return, the flight was late again. I spoke to the cabin crew while waiting for doors to open. Have you, I asked, ever been on an IA flight that actually departed or arrived in time. They said sorry but they feel the same way and would I be kind enough to complain since they cannot do so. Now isn’t that precious.

————————————–

Back to the workshop at ICRISAT which stands for “International Crop Research Institute for the Semi-arid Tropics” and is located in Patancheru (I love that name) which is about 30 kms outside Hyderabad. India is mostly semi-arid tropics although there are small bits of India which are real tropics and other parts that are totally arid and yet other parts that can pass as Amazonian rain forests.

Talking of Amazon, I like that name as well. Actually, some of my favorite names are river names. For instance, consider the mighty Bramhaputra, the son of Bramha. There is power and majesty in that name. There is mystery and dread in the name Okavango. There is more than a hint of fear in the Zambezi. But Orinoco evokes a sense of playfulness and fun (remember Orinico Flow by Enya?) I like the name Oglala which is a huge aquifer in the United States. The Oglala is about 250,000 square kilometers in area and contains an estimated 2 billion acre-feet of water. Water is, of course, one of the most important natural resources and will define the limits to growth in the not too distant future.

Back to the “South Asia Regional Workshop on Good Practices in ICT4D: Their relevance in agricultural extension and communications.”

{Digression: What is with this using numbers when they should be using letters? Is ‘4′ a reasonable substitute for ‘for’? Is it laziness or is it a mix of illiteracy and innumeracy or is it cutesiness of the type that appeal to toddlers who go to “Toys-R-Us”? I am inclined to believe that it is plain old fashioned stupidity, going by the general IQ of the practitioners in the ICT for development arena.}

{I think this is continued somewhere else but I cannot figure out where right now. I will work on this one later. (Edited July 2005.)}

I subscribe to an email list where matters relating to India’s progress down the information highway is discussed. One member, Mr. S.N.Rao, wrote in response to the postal department’s scheme. I find Rao’s comments very pertinent and with his permission I quote him for the record.

I can see that this is a very useful thing to have and that it benefits large numbers of poor people who cannot afford to own computers or learn how to operate them or speak/write English.

That brings me to the frighteningly palliative nature of this kind of solution. It attempts to provide a workaround – causing the real problems to be ignored along the way. I hope I am not the only one to see the striking parallels between this solution and the “good old days” solution to illiteracy where the postman often read out incoming letters to his customers and scribed outgoing mail on their behalf!

The basic problems that need to be solved are

a. Computers and technology are still bewildering and sometimes threatening in their cost and complexity of use. The platform that is used to develop and test software is basically the same as the platform that is used as a home PC…with all the attendant disadvantages of a user interface geared for essentially production/office environments.

There are some products that make sending email simpler by providing a dedicated email station that does nothing else – but that again is a point solution. There is a sorely felt need for a home platform. Sending email/voice/photos via the internet should be at least as easy as turning on the TV and switching between Z-TV and CNN (if not as easy as switching on a light).

b. Local language support is nearly non-existent despite large cumbersome frameworks and customisation options being built into operating systems. As a result it is almost imperative that the user be comfortably familiar with English. Oh! wait – that’s only true for India and a few other countries – in Japan, the computers, UI, keyboards are all in Japanese (I think you might be even able to select between two different scripts – kanji and the more common mix of katagana and hiragana). Now wouldn’t it be nice for the old man in Alleppy if we had a computer with an interface and markings entirely in, for example – Malayalam?

Band-aids, palliatives, patches, workarounds — are dangerous when they mask underlying problems. They work in the short-run and appear to solve the problem but in the long-run, they indirectly contribute to the persistence of the problem. They often address symptoms rather than causes. I am not advocating the abandonment of band-aids. My insistence is on making sure that even as we are busy putting on band-aids, we should spare some time and effort to address underlying causes.

Computers are complex beasts because of the evolutionary pathway they have traveled. Made by techies for techies. For them to be useful for the unwashed masses (such as yours truly), they have to be transformed into easy to manage domesticated animals. Some people are working on that domestication.

The availability of computers for the masses is of course increasingly becoming a necessity. But that is far from sufficient. For us to have a reasonable shot at development, we need to have a literate population. Palliatives that mask that underlying deficiency should be considered dangerous.

This line of thinking was prompted by another question: Why don’t most Indian employees of a leading global software vendor have PCs at home? Again the obvious conclusion: PCs lose out in the cost-benefit analysis. Superficially, they can afford to buy PCs. But upon deeper reflection, a few other factors reveal themselves.

First, the costs. The total cost of ownership of a computer is not just the hardware and software price you pay at the store. It also has to include the cost of maintenance and administration, which is an ongoing cost. Then the benefits. The benefits arise from the utility of the PC. How useful a PC is depends on factors many of which are outside one’s control. The utility of most goods are dependent on the availability of other goods. Substitutes goods decrease the utility of the good, whereas complementary goods increase the utility.

For an employee of a software company, PCs at work are a given and act as a substitute good. PCs require a lot of complementary goods the absence of which decrease the utility of a PC. For instance, power is a complementary good for the PC. Uncertain and poor quality power reduces the appeal of a PC. Poor connectivity like-wise does not enhance the desire to own a PC at home. So also, the lack of services delivered through a PC.

As someone noted, people don’t want a quarter-inch drill — what they really want is a quarter-inch hole. So also, it is not that people want a PC — they want the services that a PC delivers. Owning a PC is not a great idea if there aren’t sufficient number of services one can obtain from one. Whether these services are available or not is not within the control of consumers of PCs. The conclusion therefore is that people will buy PCs only if it fits a larger ecology that is largely outside the control of any one single entity.

All the above leads me to the point that I never tire of making: an ecological approach to change. You cannot just change one bit in a system and expect that change to stick. Any intervention has to be sufficiently supported by other bits of the system for that intervention to be effective. You cannot simply pick up a bunch of computers from a store in Mumbai and stick them into a village kiosk and expect to transform the village magically. Nor can you put students through a canned “computer course” and expect that they will become instant IT workers.

Computers have very “deep back-ends”. What you see on the surface is just — how shall I say it — on the surface. The utility of computers also arises from the availability of a deep structure. If that deep structure is missing, as it is in most developing world context, it is not at all surprising that computers don’t work as advertized in the developing world.

Damn, now I know what was preventing me from bonding emotionally with people — my fear of technology. Now that Simputer is here, I will get over my fear of technology and bam! I will be bonding emotionally with people. Now I will finally get a life!

~~~~~~~~~~~~~~~~~~~~~~

My point is rather pedestrian. One should try to be somewhat realistic about the scope and nature of a technical product. Inflated rhetoric about how it can lead to god-realization and enlightenment is foolish. It is useful to remind ourselves that technology directly solves technical problems. A handheld computer’s utility is limited to storing, retrieving, managing, and communicating data. It will not solve an interpersonal relationship problem no matter how user-friendly an interface it has. If electronic gizmos could have solved ‘bonding’ issues, then the US would have been one of the most friendly societies on earth and not need the battalions of shrinks it has. If having a Palm-pilot clone is all that is preventing people from bonding, then we have all our problems licked.

Whether one likes it or not, solutions have to be consistent with the nature of the problem. Interpersonal problems cannot be addressed by technical solutions anymore than transportation problems can be addressed by cardiac surgery.

When bored I also become cynical. Selling hardware is hard in a world that can barely afford decent square meals. Roping in NGOs to push hardware seems like an excellent marketing strategy and so these conferences get funded. Almost every presentation in these sort of meetings is about PCs and internet. There is practically zero mention of radio and TV. Radio and TV make more sense in a lot of contexts for developing countries. Telephones, radio, and TV (TRTV, henceforth) are orders of magnitude cheaper, easy to use, and in many aspects more robust than PCs. So what explains the neglect of TRTVs?

Two factors explain the neglect of TRTVs as a solution to the information and communications needs of the poor. First, the TVTR industry is fragmented compared to the industry for computers. The computer industry is a virtual monopoly of the Intel-Microsoft behemoths. Monopolists have market power and therefore they capture all the profits (or, rents) that are generated by increased demand for their products. Compared to the computer industry, the TRTV market is more competitive. No single entity there controls any significant part of the market, and therefore economic profits are non-existent. Consequently, no entity has an incentive to push TRTVs as a solution for the information and communications needs of the poor.

The second factor for the neglect of TRTV is that TRTVs deliver services that have public goods characteristics and have major positive externalities that cannot be captured by the firms in the market. The market therefore underprovides the amount of TRTV as would be predicted by economic theory.

The classical response to the second factor is of course to subsidize TRTVs so that the socially optimal quantity is delivered and consumed. The first factor can only be confronted by regulation. Courts have been routinely trying to break Microsoft’s monopoly in the US an Europe. Perhaps one of these days with a little bit of luck, the stranglehold will be broken.

India has to adopt the most cost-effective means of delivering information and education. Computers and the internet are an expensive solution that most of India cannot afford. The money available for subsidizing the information and communications solutions can be more efficiently used in the TVTR sector than the computer/internet sector. Is anyone paying attention?

Vocabulary matters. It allows us to reason about the real world more effectively. It allows us to avoid illogical constructs arrived at through ill-defined and vague ideas poorly understood and consequently improperly communicated.

One of my pet peeves (which stimulated this comment) is the conflating of ‘information’ and ‘knowledge’. They are cats of two distinct breeds and are not interchangeable. The first does not require a brain whereas the latter cannot exist outside a brain. A telephone directory does not have knowledge of my phone number; it merely represents that data as information. When you look up and internalize that information, you have knowledge of my phone number.

Information is what economists call a public good (non-rival, mainly) while knowledge is a private good because it is associated with a brain. The same amount of information can lead to a lesser or greater amount of knowledge depending upon how many brains internalize that information.

The revolutions in ICT has lead to a decrease in the cost of replicating and disseminating information. It has not reduced the effort required for information to be incorporate in a brain into knowledge. It is an information revolution; it is arguably not a knowledge revolution. There is an explosion in information (some would argue that it is merely a data explosion) maybe but certainly not a knowledge explosion. Indeed, too much information – information overload – can lead to a decrease in knowledge acquired because humans have limited CPU power and if too much is used up in input of information, less CPU capacity is available for processing the information into useful knowledge.

From the introduction that Rajesh Jain quotes in one of his tech talks, it is not clear to me that Mokyr distinguishes between knowledge and information. With the distinction in mind, it is interesting to re-read the quoted text and find evidence of much muddled thinking.

In my own field of development economics, I have noted a similar muddling of two very distinct concepts: growth and development. Not being able to distinguish between the two often leads policy makers to mistake growth for development: the former is neither necessary nor sufficient for the latter. So also, more information is neither necessary nor sufficient for greater knowledge.

Finally, let’s keep in mind the following: Data is not information, information is not knowledge, knowledge is not understanding, understanding is not wisdom, and finally wisdom is not enlightenment.

… We are such stuff
As dreams are made on; and our little life
Is rounded with a sleep.

    Shakespeare’s The Tempest

Writing in the Dec 28th, 2003 edition of The Week, President Kalam says, “In the 21st century, knowledge is the primary production resource instead of capital or labour.”

I have been unable to fully comprehend that insight, fundamentally because it does not make any sense. Sounds profound but makes no sense. What is a ‘primary production resource‘? Did Kalam imply that once upon a time capital and labor were primary production resources but knowledge wasn’t? What changed so that labor and capital got displaced and now knowledge holds that position?

We need to understand that production has always required capital and labor primarily, and that knowledge (or know-how) has always been an essential ingredient. The production process ultimately uses these three elements multiplicatively. By that I mean, if even one of those are at a zero level, the product is zero. There is some substitutability among them, of course. You can use more capital and employ less labor to get the same amount produced, for instance. Or you can use more knowledge (ie, better technology or know-how) to use capital and labor more efficiently. Knowledge increases what is called the production possibilities but for that to happen you have to have production in the first place.

The last point bears repetition: you have to have production before you can use technology to increase the efficiency of production. IT (information technology) is an efficiency enhancing technology. It enters the production function multiplicatively, not additively. You have to have something going there before you can obtain gains from IT use.

All this talk of India becoming an IT Superpower is a lot of nonsense because India cannot become an IT superpower without it first becoming a Stuff Superpower. India has to produce stuff that you can lay your hands on — does not matter what it is. It could be food, or it could be manufactured stuff or whatever. But it has to be stuff. The reason is that we exist on stuff — we eat stuff, we wear stuff, we get transported on stuff. We are made of stuff. We cannot exist on ‘knowledge’. We are not dream stuff even though we are such stuff that dreams are made on.

We are poor not because of lack of information — there is tons of it in every conceivable place in the world. You can get all the information you need in a neat little tiny 100 GB harddrive. It would do little to alter the fact that most of us don’t have enough to eat. The hard part is to convert the information into knowledge, and then use the knowledge to convert some stuff (we generically label them land and labor) into more useful stuff (such as food, education, factories, etc.)

Let’s get back to basics. What is poverty? Poverty is lack of income. What is income? Your income is that share of stuff produced that you get to take home for yourself. Let’s not confuse money with income. Income is often denominated in monetary units but in real terms, income is what you get to keep from what is produced overall. Per capita income is therefore a ratio: a ratio of what is produced (the numerator) to the total number of people (the denominator). You can increase income by either producing more or by reducing the number of people. If the rate of growth of production is lower than the rate of growth of the population, you will have a falling per capita income. In time, you would have deepening of poverty.

To repeat that point: we are poor because the amount of stuff we produce is low relative to the number of people we have to distribute the stuff to. Information technology (IT) can help increase the amount of stuff produced but IT can never be a substitute for stuff. So India has to become a STUFF SUPERPOWER because we are a PEOPLE SUPERPOWER. If you divide STUFF INFERIORPOWER with PEOPLE SUPERPOWER, you get poverty-ridden India. On the other hand, if you divide STUFF SUPERPOWER with PEOPLE INFERIOR POWER, you get stuff-rich USA.

I have a little secret that would like to share with everyone tomorrow. It is a secret because no one in India seems to have a clue about this. I scanned the speeches of movers and shakers in India and realized that my secret is safe. But I think, January 1st 2004 would be a good time to get started on revealing the secret.

I wish you a very Happy New Year 2004!

If India can turn into a fast-growth economy, it will be the first developing nation that used its brainpower, not natural resources or the raw muscle of factory labor, as the catalyst. And this huge country desperately needs China-style growth. For all its R&D labs, India remains visibly Third World. IT service exports employ less than 1% of the workforce. Per-capita income is just $460, and 300 million Indians subsist on $1 a day or less. Lethargic courts can take 20 years to resolve contract disputes. And what pass for highways in Bombay are choked, crumbling roads lined with slums, garbage heaps, and homeless migrants sleeping on bare pavement. More than a third of India’s 1 billion citizens are illiterate, and just 60% of homes have electricity. Most bureaucracies are bloated, corrupt, and dysfunctional. The government’s 10% budget deficit is alarming. Tensions between Hindus and Muslims always seem poised to explode, and the risk of war with nuclear-armed Pakistan is ever-present.

I am glad that the article does not paper over the real problems. It goes on to report the confidence among some Indians.

Now, many talented Indians feel a sense of optimism India hasn’t experienced in decades. “IT is driving India’s boom, and we in the younger generation can really deliver the country from poverty,” says Rhythm Tyagi, 22, a master’s degree student at the new Indian Institute of Information Technology in Bangalore. The campus is completely wired for Wi-Fi and boasts classrooms with videoconferencing to beam sessions to 300 other colleges.

Boom, like beauty, evidently lies in the eye of the beholder. I like enthusiasm as much as the next guy. But let’s not get carried away by IT. It is not driving India’s boom because there is no boom to begin with. India’s economy is growing at a modest pace. Calling it a boom is silly. And it is worse than silly to believe that IT can deliver the country from poverty — it is dangerous.

Thinking that IT is the answer to India’s development is dangerous because it could divert limited resources into wasteful activities. Every now and then one hears of another large sum being allocated for e-this or e-that. Recently I was at a roundtable on e-governance. Speakers held forth on how e-governance would help. I could not for the life of me figure out what is the point in moving from bad-governance to e-bad-governance. I thought that the move should be from bad-governance to good-governance. But that was the minority view there because the consensus was that everything was as it should be and all that was needed to gild the lily was a bit of IT.

“Yes, tea lead to his death. He was crossing the road to get himself a cup of tea, and a bus ran over him. Tea caused his untimely demise.”

You think that that is funny. But wait till you note the conclusion drawn from the following. This is from a report by my friend Priya Ganapati of rediff.com:

Jhunjhunwala cites a case where an email was sent to a number of government officials including the chief minister about a possible breakout of the small pox epidemic in a certain area.

Though the email was ignored by many, it finally did reach the right official and prompt administrative action to prevent the epidemic was taken.

“In Attapatti village, Veermani, a man with disabilities was unjustly dismissed from his job. He wrote an email to many government officials, one of whom finally took note and he was reinstated,” Jhunjhunwala points out.

You may not believe it but one is supposed to be persuaded that the above examples argue for IT-enabling of Indian villages. A moment’s consideration is all that is required to see that the conclusion is as silly as blaming tea for the uncle’s release from this mortal coil.

If you substitute postcard for “email” in Priya’s report, then obviously the conclusion would have to be that what is required for rural development is a postal system. But wait!! We do have a postal system, don’t we? So what exactly does an email do that a postcard does not do?

Someone should clue these people in: emails and postcards are the means of conveying a message. Emails don’t suddenly make caring people out of apathetic government bureaucrats. The failures of government is not a technological failure and producing technical fixes for that is as effective as casting spells to fix a broken car.

One may say, “Well, emails are faster. And you can send it to a zillion officials.” Sure, you can. But so when everyone and his brother is sending a zillion messages to thousands of officials, the officials will also learn to file those emails under “T” for trash. You would be back to square one with the only difference being that money that could have helped with development ends
up in the pockets of Microsoft, HP, and Intel.

The bottom line is very simple. We need to ask where the failure is in the above examples. Then figure out a solution. And if in that solution we find that the use of IT tools is cheaper than any other method, we should use IT tools. Until then, all who are IT-trigger happy should sit on their hands and contemplate the universe.

I think the time has come to speak of little things. Things that add up like little grains of sand and little drops of water. Individually, they seem irrelevant and inconsequential. But they matter very much in the end.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Saturday evening plans included meeting friends for drinks at the Cricket Club of India near the Churchgate station. Karthik said it was so close to the station that anyone would be able to tell me. I asked but there was no address he could give me. I arrived at the Churchgate station well on time. Then for the next 25 minutes I tried to get to the Cricket Club of India.

It was not more than 10 minutes walk from the station. But not having an address, I had to rely on asking people. They generally waved in various, often contradictory, directions. Finally, after a couple of mobile calls to Karthik, I arrived about 10 minutes late at the CCI.

It does not take a genius to figure out that without numbers and addresses, it is difficult to locate a place; that it is wasteful and frustrating. It is not as if addresses and numbers are a modern new-fangled invention that requires all sorts of fancy high-tech equipment and massive amounts of capital spending to put in place. Any idiot with half a brain can figure out that without a proper addressing scheme, people waste time and effort needlessly. Yet, I notice the almost universal lack of a rational street addressing in India.

Sure, in business cards you see addresses printed. But it is not an address but rather a description of the general neighborhood. “In front of this, and behind that, and near to the other, and opposite something else, close to the cinema.” The addresses generally run into 4 or 5 lines. Even then you are not likely to find it in a hurry.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

This morning, I thought I would call the Confederation of Indian Industries offices in New Delhi. I am invited to speak at their 6th Social Summit Dec 17-19 “National Conference on Corporate Social Responsibility” in Bhopal. It was supposed to be just a simple call to ask for a list of participants.

After over an hour of my time and significant costs in long distance charges, I still don’t have that information. I had no idea of how difficult it was going to be. I dialed the number, it kept ringing and then the phone system finally timed-out. I called again a few minutes later. It was busy. I tried all four listed numbers; they were either busy, or were not answered. I tried again after a while. This time someone answered. They mumbled something, as if they were answering the phone while asleep.

“Hello, is this CII?”

“Yes.”

“I am trying to reach Ms. xyz.”

Without a word of reply, I find myself listening to muzak. It goes on for few minutes. Finally, someone picks up the phone. I could hear the person talking to someone else in their office with the phone off the hook and I was kept waiting. I hung up after a few minutes. After a while, I re-started the whole process. After another 20 minutes, I was finally speaking to someone. Left a message asking for information.

Later in the afternoon, when I still had not heard back from them, I started the whole thing once again. This time I lost my cool. When the operator answered, I said, “Listen to me carefully, and don’t transfer me before you fully comprehend what I am looking for.” Then I carefully explained her job to her.

To cut a long story short, this was not a 2-bit fly-by-night operation I was trying to reach. It was an industry association representing thousands of firms. One would have expected a little bit of professionalism. They don’t even know how to answer the phone. Their shabbiness is astonishingly blatant. Surely, this is no professionally run organization.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The two anecdotes illustrate a larger point that I would like to make. I submit that for India to develop, there has to be a change in our outlook. We need to think very carefully about what exactly the problems are and then think very deeply about what are the appropriate solutions for them.

Economists like to remind people that learning by doing is a very powerful device. If you are at the fore-front of some technology, the only way to learn is by doing and making mistakes and so on. But I believe that if you are not at the cutting-edge, then learning by imitating is the way to go. It does not require a rocket scientist to keep ones eyes open, note very carefully how others have solved a specific problem, and simply copy that solution if it is applicable. That way you don’t have to pay the price of having to discover the solution and yet you get the benefit of having the solution. This is the advantage that can come of being a late-comer. Among siblings, it is often the case that the second born appears to be sharper than the first born because of this learning by imitation.

Development economists often wonder about the so-called convergence hypothesis, that is, developing countries grow faster than developed countries and eventually catch up. One of the factors that governs the rate of growth of an economy is the level of knowledge. Information internalized leads to knowledge. Now these days information is no longer a really big secret: it speeds around the globe at electromagnetic speeds. Why is it then, one wonders, that the poor countries cannot use the information effectively to increase their growth rates and pull themselves out of poverty?

My contention is that merely having knowledge is not enough. The system has to be attuned to make use of that knowledge for it to be useful. In a very broad sense, it is larger ecology of the society that determines whether a give bit of knowledge or technology will be useful in a society or not. The tranfer of knowledge is a much harder problem than the transfer of technology.

In other words, you could very easily import a million PCs and tons of software from some advanced industrialized country. Or you could import the technology and build them locally. Will that have an effect on the growth rate of the economy? Marginally at best. But for real change, you would also have to the way things are perceived. That is a much harder problem to crack. It is harder because it is a soft issue — it deals with people, their belief systems, their emotions, their understanding of who they are, their ambitions and hopes, their fears and insecurities.

I come back to my original position: ICT merely provides the tools. How to effectively use the tools is not part of the software package. That cannot be imported in a box any more than merely stacking books on quantum physics in your living room makes you a physicist.

We have to change our view. Two and a half millennia ago, the historical Buddha Gautama had outlined an Eight-fold Path as the Fourth Noble Truth. While all of them are important, the most important in my opinion is that of Right View. We have to find the right way to view the problems we face. Only then can we take the first steps to fixing them. My fear is that we are too eager to rush in with technological fixes to problems that are primarily sociological.

It is ironical that we have not learnt a lesson that was taught in this land by the Buddha. He was unhappy about something. So first he decided to fully understand what the problem was and state it unequivocally. That was the First Noble Truth, the truth about dukkha. Then he figured out the cause and called it the Second Noble Truth. Then he did what I would call an existence proof, that is show that a solution does indeed exist. That was the Third Noble Truth. Finally, the Fourth Noble Truth with its Eight-fold Path.

The lesson we should have learnt is that of the systematic application of reason to any problem. First, define the problem, then understand the cause, then show that the cause can be eliminated, and then finally outline the solution.

So my advice to all those who are ICT-trigger-happy, think before you fire up the internet browser. The answer may not be there at all.

The Global Information Technology Report is the most comprehensive assessment of “networked readiness” — how prepared an economy is to capture the benefits of technology to promote economic growth and productivity. As the world experiences an economic slowdown, the Report highlights that the use and application of information and communication technologies (ICT) remain among the most powerful engines of growth. This year’s Report benchmarks the performance and monitors progress in networked readiness of 82 countries.

Finland ranks numero uno in the NRI — Networked Readiness Index — followed by the US. India is somewhere in the middle (number 37th of the 82 countries listed) because “of its immense pool of trained IT manpower”. China is ranked 43rd. This came as a bit of a (pleasant) surprise to me.

Transaction costs are all over the place. When I travel to talk with someone, the cost of the travel in terms of time and money is the transaction cost of the talk. I could use the phone to have a talk. That reduces the transaction cost of having the talk. Telephones are a lower cost substitute for transportation in this case. This is one way that information and communications technologies reduce transaction costs. It is cheaper to move electrons than to move molecules.

All technological progress is an attempt to reduce costs and reducing transaction costs presents great opportunities since transaction costs account for a very large share of the total costs of stuff.

Now turning to the issue of developing countries and the use of ICT, the matter central to our discussion. Developing countries are resource constrained and therefore reducing transaction costs is a great way to stretch resources. Instead of a costly bus ride, use the phone. Ironically, it is often the case that in developing countries bus rides are cheaper than phone calls — because phone calls are senselessly priced too high leading to efficiency losses.

A high-quality always-on widely available affordable communications network is an absolutely essential part of the infrastructure for any economy, especially a developing one. Since this requires significant fixed costs and since there are immense positive externalities (network and consumption externalities), the market will underprovide communications networks. Therefore, the provision of a communications network should be subsidized for achieving the socially optimal solution. Conversely, taxing the provision of a communicatins network would have negative consequences. And that is what short-sighted money-grubbing developing country policy makers do: they tax the sector instead of subsidizing it.

India is poor because of the totally insane public policies. Heavily taxing communications technology is perhaps one of the most eggregious example of such brain dead policies. For many decades, the government of India in its infinite wisdom considered phones to be a luxury and priced it out of the reach of nearly 100% of the population. That is why the department of telecommunications was able to install on an average half a million phones a year for about 40 years of its existence. Now we add half a million phones in a week.

We will continue to explore the use of ICT for development in the future.

This week, I would like to address myself to that question in detail. The answer can be succinctly stated as: It reduces transaction costs. It will take a pretty long time to explore that answer. But first a few personal experiences to set the stage would be appropriate.

Today I called up a local store which sells white goods. I wanted to order an airconditioner. Could I order the AC over the phone, I asked when the phone was finally answered by someone. I was told that I had to come down personally and bring cash. Will they accept a debit card? No. Will they deliver today? They can’t tell me that until I had paid and only then will they check to see if the department that does the delivery has the capacity to deliver today.

I drove to the bank to withdraw the cash. At the bank, the line for withdrawing cash was immense. I could not use the ATM because the amount I needed was above the ATM cash withdrawal limit. It took me a half hour before I had the cash in hand.

Next step: drive to the store. The closest branch was in Shivaji Nagar. I told the driver the address and we proceeded to drive the four or five kilometers to the store. It was on ‘L.J.’ road. The traffic was bad, as usual. The driver did not know where L.J. road was. We asked for directions from various taxi drivers. We traveled with hope thinking that this time the directions were right. In about 45 minutes, we had reached the store. It was closed because that branch of the store is normally close on Mondays.

I had spent about 2 hours in trying to buy something that in a different setting (for instance in California) it would have taken me all of 5 minutes and that too in the comfort of my home: I would have checked the prices of ACs on the web and ordered it online and paid for it with my credit card. Instead, after about 2 hours of frustration, I was still without what I wanted.

This little episode is indicative of a depressingly large set of similar experiences. The features of this set almost always include having to spend an inordinate amount of time searching. The search cost of locating a place is non-trivial. Street addresses don’t exist. You could be looking for a place with an address with reads “122/1/B Lajpat Nagar II”. You reach 121/1/B. And then you discover that 122/1/B is somewhere else altogether. Sequential numbers are not physically close. The house numbers are in the order in which the plots were registered, for instance. Once I spent about an hour hunting around for a place in Lajpat Nagar in Delhi. I am sure that I was not the first — nor I was the last person — to waste time and energy (gasoline) trying to locate an address there.

Another feature common to all the episodes includes transportation. On Saturday last, I was invited for dinner at a house that was about 5 kilometers (3 miles) from the Andheri local train station. I took a bus from the station. It took about 50 minutes for the bus to cover the 5 kilometers. Traffic moves about 8 kms an hour in the city of Mumbai. In India, trucks move about 18 kms an hour on the nations highways.

The movement of payments is an important function in any economy. I had to pay my brother Rs 25,000. I mailed him a check to Nasik without asking him first. He called to say that it will take about 3 weeks for that check to clear and so it would be good if I could send him cash or do a wire-transfer.

Cash is inconvenient to handle and when one is carrying a large sum of money, one is under stress. For furniture shopping, the only acceptable form of payment appears to be cash. Part of the reason is of course tax abvoidance. But the slowness with which checks clear has something to do with it as well.

There are a few things that one can do at a macroeconomic level to push the economy towards its potential such as fixing the monetary and fiscal policy. But they are limited instruments. Fundamentally, what really puts the brakes on the machinery of the economy is a very large number of very small grains of sand which are individually ignored but together form a very potent force. These grains of sand arise from what can only be said to be the overall culture of the economy.

It is an unfortunate fact that the Indian “economic culture is dismal and unless that changes, India’s economy cannot reach its potential. Becoming aware of the problem is fundamental to the solution, of course.

In the next piece, we will explore what ICT can do to remove the sand from the Indian machinery.

How much to allocate to investment and how much to consumption depends on the objective function of the policymakers. The private objective function of the policymakers may be quite different from the publicly stated objective function, however. After all, the Indian Government did not declare sometime after independence that their objective function was to strangle the economy and retard growth so as to extract as much rent as they could from a small set of large business houses by instituting a licence-permit-quota regime. What they said was that their objective function was to maximize growth, the eradication of poverty, the development of rural areas, the emancipation of women, the removal of caste barriers, et cetera. In short, their stated goal was little short of unleashing peace and prosperity for all and sundry, all done through the benevolence of the babus that were at the helm of affairs intent on climbing the commanding heights of the economy.

I get a feeling of impending doom every time I see yet another utopian objective function being declared and mega billions of rupees allocated for reaching that stated objective. Yet once more we will be spending huge amounts of public money. How much of it will actually be investment and how much of it will be consumption is the question. How much of it will be effectively used by the intended receipients and how much will leak out, is another question. Development is the stated goal but whose development is the critical question.

It is easy to spend $2.7 billion. Here is a break-up:

500,000 PCs (with power supplies etc.) at $1500 for a total of $750 million
MS Windows for 500,000 PCs at $300 for a total of $150 million
1 million Voice based information technology device at $500 for total of $500 million
Infrastructure for 500,000 kiosks at $2000 for a total of $1 billion
For high flying executives, for McKinsey to write fancy reports, for government kickbacks for the awarding of contracts, for old fashioned bribery, etc only $300,000,000 ($300 million).

There you have it. $2.7 already “invested” in IT to bridge the digital divide. I put invested in quote because I don’t believe that it does anything for the 700 million people it is supposed to benefit. The actual beneficiaries are Microsoft (software), HP (Hardware), some local companies making the “voice based technology device” (which probably will be as useful as the mythical Simputer), McKinsey with their highly paid consultants, government bureaucrats, and politicians. It will be a party. All, except the poor, will be invited.

About 10 years P. Sainath wrote a book with the catchy title “Everybody Loves a Good Drought”. He was traveling with poor migrant farm labor for some time trying to understand how they live and wrote dispatches for the Times of India. These migrant labor are the poorest of the poor. Government programs exist to help these people out — on paper of course. Monies are spent when a district is declared hit with drought. Everybody loves it — because the whole administrative structure can feed at the public trough. Everybody, that is, with the exception of the poor migrant laborers. They starve.

I think it is time to write one with the title “Everybody Loves a Good Digital Divide”. I don’t believe that there is a digital divide in India. Then why is it such a big hit in India? Perhaps if there is no digital divide, it is necessary to invent one so that resources can be mobilized to bridge it.

ICT presents an opportunity for developing countries to make more efficient use of the available resources. However, ICT is neither necessary nor sufficient for economic development. The advanced industrialized countries were underdeveloped (by today’s standards) once upon a time and their transition from subsistence to a modern exchange economy did not involve modern ICT.

In contrast to the experience of the advanced industrialized countries, the developing countries find ICT available to them at a much earlier stage of their development. These economies don’t have highly optimized economies and the use of ICT has the potential to help them transit from a subsistence to an exchange economy relatively rapidly. For this to happen, ICT must be targeted for domestic use, and not just seen as an avenue for foreign exchange earnings.

ICT is arguably strategically important for economic growth of all less developed countries (LDCs). However, government policies tend to emphasize only the export-led growth potential of ICT. India’s success in the IT-export sector is often used as an example to be emulated by countries similarly placed along the development spectrum. It is important to recognize that while IT export-led growth is an attractive goal, it is not as relevant for sustainable economic growth for rural India. However, a policy that stresses the use of ICT within the country could lead to the development of a domestic IT industry that can serve as an engine of growth by its direct contribution to job creation and GDP growth in rural India, in addition to its contributions to the urban economy. (Needless to say, other appropriate technology can also have a multiplier effect on resources available.)

Production versus Use

The production of IT related products and services targeted for export markets is generally done in high-technology enclaves. The benefits of the production and the use of IT is therefore limited to the small number of producers in the LDC while the majority of the benefits accrue to the users of the IT products and services in the importing developed countries. The products address the needs of the importing countries and they gain significantly from the use of IT produced at low cost in the LDCs.

Increasing the Income Divide

While the IT-export sector may be earning foreign exchange through IT production, there is no benefit from the use of IT products and services to the country as a whole. The vast majority of the people are completely unaffected and do not obtain any gains from the use of IT; only the producers of the IT products increase their human capital. Consequently, the income inequality within the country itself grows which has adverse macroeconomic consequences.

ICT for Sustainable Economic Growth

For economic development to be sustainable, it has to be broad-based. IT-export led growth alone cannot result in broad-based growth because the knowledge-goods produced by the country are targeted not to a domestic market but to an export market.

Economic growth models emphasize the importance of capital – both human and physical – state of the technology and the dependence of growth on the size of the market. We view IT in this context as an enabler of delivery of services. Domestic demand for IT products and services will spur the domestic production of IT and knowledge-goods. There are important forward and backward linkages in the domestic consumption of IT products and services that go beyond the benefits attained by IT exports alone. For instance, the use of IT in the education and health sectors will provide a large user base which will not only have access to new technology but also participate in the information economy.

Evidence of the effect of ICT on Economic Growth

Is there any hard evidence that ICT has an effect on growth? Most of us believe that the ICT does have a positive effect on growth. In a recent book, Matti Pohjola reports that The Working Group of the United Nations Commission on Science and Technology for Development recommends that each country establish a national ICT strategy aiming at maximizing the benefits of ICTs and minimizing their risks. He concludes that

“… in recent years IT has had a strong influence on economic growth in industrial countries and at least in those newly industrialized countries (that is, Korea and Singapore) studied in this volume. Admittedly, however, developing countries seem to have neither invested in IT nor benefited from such investments to the same extent as industrial countries. There is concern that information is becoming a factor, like income and wealth, by which countries are classified as rich and poor. To prevent this from happening, developing countries need to formulate national IT strategies to promote the use of these new technologies.”

It can be argued that more than the production of IT goods and services, the use of IT goods and services is more critical for economic growth. The question whether ICT contributes to growth or not is akin to the question whether transportation contributes to growth. Both are instrumental and provided that they are used appropriately, growth enhancing. Investment in ICT for developing countries is not anymore an option than investing in a transportation network is an option. It is absolutely necessary, although it is far from sufficient to ensure growth.

The two most important functions for ICT are these. First, improving the functioning of markets. What to produce, how to produce, what to sell, how to sell, where to sell — all these are critical questions that directly affect growth. Clearly ICT is indispensable for this function. The second function is in the area of production and delivery of educational content. When the majority of the population is illiterate, the resources needed for educating them (and not just making them literate) is formidable. ICT provides the only hope of leveraging limited resources to address this problem.

The proximate causes of poverty can be seen as two gaps: the ideas gap and the objects gap. The objects gap is the lack of physical resources – too little land, too little capital stock, etc – that contributes to persistent poverty. The ideas gap is the lack of know-how about how to make the best use of the resources one has. It is the ideas gap that ICT can most effectively bridge.

The Case for India

India has had a reasonable amount of success in the export of ICT products and services. But until IT is used, it is hard to predict what exactly the impact will be. However, it is a reasonable expectation that IT cannot but have a beneficial effect by its use.

Domestic ICT use must be given the attention it deserves because only through broad-based ICT use can the benefits of modern technology be made available to all and bridge the income divide. Domestic use will have important linkages to the supply of human capital required for the export of ICT products and services.

For a large country such as India, domestic demand for ICT products and services can provide the necessary base for sustaining the industry and to shield it from external shocks. Therefore, India must create the institutions that encourage the use of ICT domestically.

Over the past decade, the Internet has been touted as a powerful engine that could raise living standards in poor and remote communities of the Third World by opening up new avenues for education, commerce and participatory democracy.

So far so good. Then it goes into the usual whining about the digital divide.

But the reality is a growing digital divide that is preventing the poor from sharing in the benefits of the Information Age. The gap between digital haves and have-nots is especially wide in India, where a national survey last year revealed that fewer than 1 percent of adults had used the Internet in the preceding three months.

OK, let’s get one thing clear. It is not the digital divide that is preventing the poor from benefiting from ICT. It is the fact that they are poor that is preventing them from benefiting from ICT. Not just benefiting from the use of ICT, the poor also are not benefiting from the advances in medical technology, in cosmetic surgery, in plasma TV technology, ad nauseum. It is not the digital divide, stupid, it is an income divide, it is a wealth divide, it is an opportunity divide.

If the poor had money, they would not be poor, and like all non-poor, would be able to buy all sorts of stuff — including, but not limited to — digital gizmos. They would buy education, clothes, food, houses, cell phones, cd players, DVD players, plasma TVs, and computers. There would not be a digital divide. It bears repeating: the digital divide is not the cause of poverty nor is it the cause of the persistence of poverty. The digital divide is a result — an effect, a consequence — of poverty.

Now coming to India: India does not have a digital divide. Let me put that in bold.

India does not have a digital divide.

If a vanishingly small number of people have something, there is no divide. For instance, it is pointless to talk about a BMW divide: we are all in the same boat when it comes to having BMWs and therefore there is no divide. So also, to a first approximation, Indians don’t have access to the Internet, except for a few million people. And the few million who do have it, have to pay inordinate amounts of money to get a slow uncertain connection.

I hope that we can put that myth to rest one of these days.

You may ask, what is the goal? And how is the focus on ICT distracting us from recognizing the goal? Or, what is the real divide that we should be concerned about if not the digital divide? What is the reason for the apparent confusion of means and ends?

No one can argue that the digital divide does not exist, just as one cannot argue that the Rolls-Royce divide does not exist, or that numerous other divides don’t exist. (More on my view of the digital divide.) One is only arguing that bridging the digital divide is not the end, but it is a possible (and one of many possible) means to an end. I will argue here that the end is to bridge information divide and that the tool could be provided by digital ICT. In some applications, digital ICT could well be the answer, while in others, other technologies may be more appropriate. In some cases, ICT for development goals may be an entirely inappropriate tool. We need to think very carefully to avoid the pitfalls some of which I have identified in a previous post Misapprehansions, misconceptions, …

What is the information divide and why is it relevant? The information divide is important because it empowers people. It empowers people not just in the marketplace but also in the political arena. Vested interests are threatened by an informed citizenry. So you would not hear too much noise about bridging the information divide. Bridging the information divide is likely to run into political opposition. There is a hoary history to the deliberate maintenance of an information divide. That is another story that we can address in a separate entry in this blog.

The next time I see another e-scheme, I will be ready to e-scream.

Seriously, here are what I believe to be the reason for this fixation with the so-called digital divide, in no particular order. First, it is a simple case of ‘to a person with a hammer, every problem looks like a nail.’

Practically everyone involved with anything to do with development (except the direct beneficiaries of development) has some facility with ICT. So therefore they start to believe that every problem has a solution that is ICT related.

The next explanation is what I call the bank robber phenomenon. When some famous bank robber was asked why he robbed banks, he simply replied because that’s where the money was. ICT projects are the most lavishly funded. And therefore, it attracts the most attention from people who would like to get a piece of the action.

Another part of the explanation is what I call the drunk looking for his key scenario. A man evidently drunk was seen searching for something under a lamp post. When asked he said that he lost his keys under the trees over there. But why was he searching for them under the lamp post? “Because,” he said, “it is easier to look for it under the light.”

Definitely, part of the explanation has to involve simply not recognizing that the digital divide is merely symptomatic of some other underlying cause. But it is too bothersome to seek to understand that cause. And even if the cause is as plain as daylight, it may be too difficult to deal with the cause. So one gets busy addressing the symptom.

Addressing only one symptom (the digital divide) while neglecting to understand the causes leads to spectacles that are reminiscent of the south seas cargo cults.

During the war, the natives of some South Pacific islands had noticed a curious phenomena. They had witnessed some people prepare a long piece of land and mark it with flares and fires. Then someone with cups on his ears would talk into a device and soon planes would land in the clearing and disgorge cargo. When the war was over, the natives decided that they needed cargo. So they made headphones out of coconut shells and radio receivers out of bamboo and lit the fires around the clearings. They haven’t had much sucess in getting cargo yet, but they believe that the cargo would appear just as soon as they can duplicate the equipment better.

I do not believe that merely going through the motions, however sincerely, of bringing ICT to rural populations would magically transform the rural economy. Focusing on the digital divide could indeed be counter productive in that resources that could have been better employed would be wasted in inappropriate ventures.

I should hasten to add that there is indeed a digital divide. But we must also recognize that there are other divides as well, such as a nutritional divide, a gender divide, an income divide, an education divide, and so on. All these divides are interrelated and there are strong dependencies. It is a second best world out there and it is easy to fall into the trap of seeking first-best solutions in a second-best world.

I will discuss why I believe that ICT tools are most suited to address the complex set of problems which cause all the divides, including the digital divide. My contention is this: we need to focus on the understanding the underlying reasons for the underdevelopment of rural areas. Having done that, we then need to figure out the best use of our limited resources to bring to bear the most appropriate tools for addressing the causes. If we do that, then we would have bridged all the divides, including the much talked about digital divide. It may turn out that ICT tools are the most appropriate in many areas. But a priori assuming that ICT tools are always appropriate is silly and sometimes tragically too expensive.

For now, I cannot find a more succinct depiction of the misplaced emphasis on the digital divide than this cartoon by the incomparable R K Laxman.
“I am hungry … if we had a computer, we could have ordered food through a website.” }

The workshop was a great opportunity to meet many people from the goverment ranks, the private sector, and various NGOs. It was an honor to meet Prof. M.S.Swaminathan, of course. Two days is sufficient time to get to know at least a couple of people well. I was fortunate that I met many people who I would like to follow up with.

The information package for the workshop asked (among other questions):

Can ICTs be useful for rural and remote areas of developing countries, especially the poverty-stricken regions?

The two days gave me an opportunity to reflect on the issues that the participants raised. I think it would be useful for me to create a framework within which I can discuss the various specifics of debated by the participants of the workshop. I will do so in a seemingly roundabout way because what I would like to do is not what a journalist or a reporter would do. I am seeking to explain something that is not trivial, neither in its conception or its impact. So it may be many days before I can say that I have made the point that I have set out to make.

It is good to have know-how, or technology. But one can get enarmoured of what one understands and seek to apply that understanding indiscriminately. As the saying goes, to a person with a hammer, every problem appears to be a nail. Besides the know-how, for successful application of technology or knowhow, there are two other important bits. First is the know-what and the second the know-why. Without the other two bits, know-how is sometimes worse than useless.

To take a specific example, consider the information and communications technology (ICT) and its application to developing economies. For the most effective use of ICT for development, one has to understand what the nature of the developing economy is, what are the failures that plague the system, etc. We have to know what the system is all about. Then we have to understand why the system is the way it is. That is, we have to also have know-what and know-why. Only then can the ICT know-how be applied to the problem of economic development.

There are numerous ventures seeking to apply ICT to rural economies around India. A study of these projects is important for us understand their know-what, know-why, and know-how. We can learn from them and emulate their successes and avoid their mistakes. To do that, we are embarking on a field trip to visit projects around Andhra Pradesh around September 22nd. In the next few days, we will finalize our plans.