WINDING DOWN
An idiosyncratic look at, and comment on, the week's net, technology and science news
by Alan Lenton
A little more heavy going than usual, perhaps, but all good solid stuff this week. Items covered include: Amazon and tax, Google self-driving cars, an interesting take on climate change, programmers – brilliant and otherwise, Bohemian Rhapsody, and London museums. Scanner URLs point your browser to the delights of an electromagnetism breakthrough, electronic components three atoms thick, security product liability, why consumers hate programmers, Osama Bin Laden’s reading list, and the world’s longest glass bridge.
Phew!
And, while you, dear readers tuck into this fine intellectual fare, I’m off to the Roebuck pub on Chiswick High Road to relax over one of their cocktails of the month – a Large Hadron Colada...
Analysis: Amazon to ‘pay’ tax in the UK
In the past 11 years Amazon’s sales in the UK have come to around UK£4.7 billion (about US$7.2 billion) but it’s all been booked through Luxembourg, where Amazon had negotiated a special low tax rate. Now, after threats of a special tax on such behaviour, Amazon has agreed to start booking UK sales in the UK, which means they will become taxable in the UK.
But all is not what it seems. The taxes are on profits. And Amazon either makes losses – which can be carried forward and set against future profits – or very small profits. It’s been doing this for years, and amazingly, while its investors probably aren’t happy, they accept it. This move is, in my opinion, a stroke of genius by Amazon boss Jeff Bezos.
At very little cost to Amazon, he is placing his company on the moral high ground, and effectively putting the screws on his rivals (think Google and Apple in particular) to follow suit. And it’s going to cost them a lot more than it costs Amazon.
For instance, take Apple. Their new watch has a starting retail price of US$399. But the components only cost US$81.20, and the assembly a mere US$2.50. So US$83.70 to build, and US$399 (minimum) to buy – that’s a very healthy surplus of around US$315 on each watch sold. Let’s be generous and assume that it costs, on average, another US$115 in sales, advertising and third party seller discounts and we still have a very nice US$200 per watch. A nice little earner – especially when you consider that we are only talking about one of its products.
According to an analyst at Morgan Stanley, Apple will sell 36 million of these watches worldwide in the first twelve months. I’m not convinced, so let’s reduce that to 20 million. That gives us a total profit of a cool US$4 billion. Now, The UK’s Telegraph newspaper has estimated that the UK has 10% of Apple’s market (Apple itself does not give figures for individual countries), which gives us a UK profit of US$400 million. The UK tax on company profits is 20%, so that means Apple would be paying out $US80 million in UK tax – and that’s only for one product!
Compare that to the fact that Amazon made a loss of US$241million in 2014, and you start to see that Amazon has little to lose and lots to gain by helping put the screws on other companies to start paying taxes in the EU countries in which it makes sales. All that, and a soupcon of goodwill from the citizens of the UK as well...
http://www.theregister.co.uk/2015/05/25/amazon_sighs_reaches_into_trousers_to_pay_uk_tax/
http://www.bbc.co.uk/news/business-31051044
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10990659/Will-Amazon-ever-be-profitable.html
http://ben-evans.com/benedictevans/2014/9/4/why-amazon-has-no-profits-and-why-it-works
http://www.investopedia.com/stock-analysis/031414/amazon-never-makes-money-no-one-cares-amzn-aapl-wag-azo.aspx
http://www.theregister.co.uk/2015/04/30/apple_watch_bill_of_materials/
http://www.cnet.com/news/apple-watch-sales-to-reach-36-million-over-first-12-months-predicts-analyst/
http://www.telegraph.co.uk/technology/apple/11077208/Ten-billion-reasons-why-Britain-matters-to-Apple.html
Shorts:
Remember Google’s self-driving cars? They are still around, even though they don’t get much news time these days. One interesting thing is that there have been 11 accidents – minor ones – involving the self-driving cars. Google claim that all the problems were caused by human driver error. Strictly speaking, that’s correct, but wearing my sociologist’s hat I can tell you that it’s the self-drive cars that are at fault.
The problem is that people don’t drive according to the traffic laws. They drive according to the prevailing driving culture. Now, the framework of that culture is (mostly) set by the traffic laws, but the laws by no means cover everything that you do as a driver. A good deal of that culture is the informal methods by which you deal with other drivers on the road. And there is no real codification of that part of the culture. (Room for a PhD thesis there, I reckon.)
Anyone who drives will instinctively keep an eye on nearby drivers for aberrant behaviour and make due allowance for that behaviour as they drive. Few people assume that everyone else rigidly adheres to the rules – informal or otherwise. It is because you drive as part of a culture that it is so difficult to enforce new laws and rules that cut across the culture. Take for instance drink-driving. When I took my driving test there was no law against driving while drunk here in the UK! When a prohibition against drinking and driving was brought in, it took over 30 years to reduce accidents due to drunken driving to a relatively insignificant figure. That was because driving to the pub for an evening’s drinking was an ingrained part of the culture. It took two generations to make not drinking part of the driving culture.
While it’s relatively easy for humans to assimilate the culture while being taught driving techniques, it’s a lot more difficult to codify unwritten rules and modes of thought, which is precisely the problem Google are facing, and that’s why their cars will continue to have minor accidents. This is why last time I wrote about self-driving cars, I suggested that they were an all or nothing proposition, and that they shouldn’t be mixed with human drivers.
http://www.techienews.co.uk/9730860/googles-self-driving-cars-met-11-minor-accidents-far/
http://www.latimes.com/business/la-fi-self-driving-accidents-20150512-story.html#page=1
http://www.theregister.co.uk/2015/05/15/google_selfdriving_cars_test/ (Great headline on this article)
Homework:
There was an interesting piece on Scientific American’s web site that has a bearing on climate change. The key date is 1492. I’m sure my American readers will know the date – it’s when Columbus discovered the new world. In his wake followed death and destruction. It is estimated that something in the region of 50 million native Americans died in the subsequent decades due to smallpox and warfare. At the same time the enslavement of Africans to work in central and south American mines depopulated large swathes of Africa.
The result?
Large chunks of Africa and America which had previously been cleared for farming reverted back to forest. By 1610, the growth of these trees had sucked seven parts per million of carbon dioxide out of the atmosphere! That was enough to precipitate what is known as The Little Ice Age, which dominated the agriculture of the middle ages.
Of course, since that time there has been a steady growth of forest clearance for farms and such like. Could it be that instead of it being carbon dioxide from fossil fuels, it is forest clearance that is increasing levels up to what they used to be, before the discovery of the Americas? If that’s the case then the measures being implemented by governments to curb the use of fossil fuels are at best misguided, at worst taking valuable resources away from learning how to feed the world without clearing forests.
http://www.scientificamerican.com/article/mass-deaths-in-americas-start-new-co2-epoch/?WT.mc_id=SA_SP_20150316
Geek Stuff:
LWN.net has a really interesting article on the talk given at PyCon 2015 by Jacob Kaplan-Moss, longtime contributor to the Django web framework. What he was talking about was the myth of only taking on ultra-talented programmers.
CTOs are always trying to build teams of such programmers. However, as Jacob pointed out this implies that programmers are either brilliant or useless. Which is simply not true if you think about. All other human talents are distributed over the population in a bell curve – few brilliant ones, most at a middle level, and a few totally useless.
There simply aren’t enough of the few to make everyone able to recruit whole teams of the few. So most programmers are averagish. Most genuinely work hard to do their job, and because of the way most people subscribe to the myth of the brilliant programmers, they put in long hours to prove they’re not in the perceived non-brilliant section. I have a great deal of sympathy for this point of view. I’ve always kind of felt a bit of a fraud when people assume that I’m a brilliant programmer. I’m a reasonable programmer, and I keep up with what’s going on in my field, but I’m not in any way ‘brilliant’.
I think it’s really good when people with high profiles like Jacob debunk the myths. I wonder how many other programmers, like me, recognized the guilt he was talking about when he gave his talk?
http://lwn.net/Articles/641578/
And now for some very old tech. Take a look at this YouTube video of Queen’s Bohemian Rhapsody played on a 1905 81 key Marenghi Fairground Organ. It’s brilliant!
https://www.youtube.com/watch?v=JTnGI6Knw5Q
London:
Museums in this country used to be pretty heavy duty affairs, with everything in staid glass cabinets. To be truthful, as a fairly solemn and self-contained kid, I rather liked it that way. I miss the opportunity to silently commune with a strange looking stuffed animal in an oak and glass case – brass plaque engraved with the legend ‘Spiny Anteater. Echidna (Tachyglossus aculeatus). ‘ Nowadays things are much more robust, and virtually all the museums in London have special talks and exhibitions and are open late.
So, if you are in London for the summer rainy season, take a look at the URL below for the sort of things that are available for your education, edification and the eradication of dampness.
http://londonist.com/2015/05/museum-lates-youve-never-heard-of.php
Scanner:
Electromagnetism breakthrough could pave way for ultra-small antennas on chips
http://www.techienews.co.uk/9727625/electromagnetism-breakthrough-antennas-chips/
Researchers create an electrical component only three atoms thick
http://www.33rdsquare.com/2015/04/researchers-create-electrical-component.html
Security Product Liability Protections emerge
http://www.darkreading.com/vulnerabilities---threats/security-product-liability-protections-emerge/d/d-id/1320274
Why consumers hate us
http://lauren.vortex.com/archive/001100.html
What Osama Bin Laden was reading in Abbottabad
http://blogs.wsj.com/washwire/2015/05/20/what-osama-bin-laden-was-reading-in-abbottabad/?mod=e2fb
World’s longest glass bridge set to open in China next year
http://www.gizmag.com/worlds-longest-glass-bridge-china/37589/pictures#1
Acknowledgements
Thanks to readers Barb and Fi for drawing my attention to material for Winding Down.
Please send suggestions for stories to alan@ibgames.com and include the words Winding Down in the subject line, unless you want your deathless prose gobbled up by my voracious Thunderbird spam filter...
Alan Lenton
alan@ibgames.com
31 May 2015
Alan Lenton is an on-line games designer, programmer and sociologist, the order of which depends on what he is currently working on! His web site is at http://www.ibgames.net/alan/index.html.
Past issues of Winding Down can be found at http://www.ibgames.net/alan/winding/index.html.
