Has Google Saved the World?

While a worldwide economic depression is all but certain, the despotism and wars that depressions usually breed are not certain. My nominees for next year’s Nobel Peace Prize are Google’s co-founders Larry Page, president of products, and Sergey Brin, president of technology, and Eric Schmidt who joined Google as chairman and chief executive officer in 2001.

Last week Google threatened to shut down its Chinese operations over two key issues: censorship of its search results and, even more importantly, a “highly sophisticated and targeted attack on (Google’s) corporate infrastructure originating from China.” The latter seemed to be designed to obtain information on dissidents and journalists and was almost certainly launched by the Chinese government.

Some have argued that Google was never much of a success in China and that they will surrender very little if they pull out of the Chinese market. On the face of it, these arguments are absurd. China is, all at once, the world’s fastest growing major economy and one of the world’s fastest-growing markets for mobile phones and Internet usage. With Google’s expansion of its core business into mobile phones, they will potentially surrender billions of dollars of profits by leaving the Chinese market.

There is an important business reason why Google is willing to risk its Chinese operations in a showdown with the Chinese government. Google is among those firms who have made a heavy bet on cloud computing. Cloud computing shifts both software usage and file storage to the Internet. The widespread adaptation of cloud computing depends upon the perception and reality of security. No one will trust their files to Google if users perceive that either they are not secure from hackers or that Google will voluntary relinquish files to national security agencies.

The coming years are likely to be terrible times in the world. As national economies collapse, governments will seek to distract their publics and stifle dissidents and critics. When citizens fail to unite behind further centralization of government power, blame will be heaped upon the Internet because “the Internet provides too much freedom to disseminate radical views.” Despite the fact that we are only in the very early stages of an economic depression, such nonsense is already being chanted in the United States.

When internal scapegoating fails to assuage their citizens, governments predictably turn to external enemies. I’m not capable of predicting who the governments of the United States and China will blame for their coming economic miseries. One wouldn’t be surprised if both countries act against their economic self-interest and blame each other. I say “one wouldn’t be surprised” because politicians place their own political success above the economic well-being of their nation; and with the recent tariffs placed on Chinese steel, this process is already underway in the USA. Often, as the socionomics work of Robert Prechter has pointed out, after years of deteriorating social mood and near the bottom of an economic depression, war breaks out.

If you have followed me so far, you understand why Google’s actions last week are heroic. In their efforts to crackdown on critics, governments around the world will depend on the cooperation of companies like Google. If Google is joined by Silicon Valley and other firms who refuse to cooperate, a major weapon disappears in the war of governments against their own citizens. A vibrant and free Internet community will continue to play a major role in providing alternative views, preventing tyranny, and slowing—and eventually reversing—further centralization of governments. More importantly, a free Internet community will provide alternative views to the demonization of foreign and domestic “enemies.” By their actions last week, Google may have begun a process that will save the world from the horrors of another world war. Sometimes an act of courage can change the world. Stand tall, Google, the world is in your debt!

Android Changes Everything

Do you remember life before Amazon? Do you remember life before Google? Or even, life before personal computers? Every so often a new product creates a sea change so big that life before the product seems like just a vague memory of a previous existence in a foreign land.

And now there is Android. Android is an operating system for mobile phones that is being developed by Google. I would bet on Android to crush the iPhone and other competitors.

Now, this is a rather bold prediction coming from someone who hardly uses his mobile phone, has never seen an iPhone, and knows nothing of Android other than what he has read in news stories. True confession—I have never sent a text message. So, what the heck can I know about the future of mobile phones?

In contrast to my prediction, many technology experts, such as Matt Asay, believe Android is no match for Apple’s expertise. Asay explains, “In part this is because Google may lack the aesthetic touch that Apple has in spades, just as Microsoft does… Android is still no iPhone killer.”

Asay is wrong. Aesthetics are critical when products are close competitors in price and quality, but no amount of design aesthetics would currently sell many Changfengs (a Chinese car) over Hondas in the United States. The why is clear—a Changfeng would not be in the same quality league as a Honda.

I understand that to Apple fans, such as Asay, my comparison is ridiculous. The iPhone to them is the current pinnacle of mobile phone development. However, what Asay may not understand is the enormous flexibility and innovative capacity of open source operating systems. Unlike the iPhone and every other competitor, Android is an open source operating system.

True, there are smart developers at Apple who have apparently made a pretty good product in the iPhone. But a handful of smart developers can’t compete against many smart developers, and pretty good can’t compete against great. Planned development can’t compete against the decentralized forces of spontaneous development. Self-organizing systems are more powerful than a thousand Steve Jobs; and they rarely behave as experts, such as Asay, predict.

Google is not going at this alone. Scott Taves writes that Google has put together a “collaborative group including Google and more than 30 semiconductor and software companies, mobile operators and handset manufacturers.”

But it doesn’t stop there. Most importantly, Google is encouraging independent teams not affiliated with any company to develop applications for Android. To kick off interest among developers, Google is awarding $10 million dollars in prize money to developers with the best applications. Developers, according to Google’s Eric Chu, “will be able to make their content available on an open service hosted by Google that features a feedback and rating system similar to YouTube…We feel that developers should have an open and unobstructed environment to make their content available.”

Even before the first Android phone has even been released, there are applications that will interest even a “not much use for a cell phone other than to call and say I’m stuck in traffic” person like me.

How about these features? You are out shopping and about to buy something on impulse. But you wonder, is it a good price? You scan the barcode of the item into an Android phone; and the phone gives you the best price online, as well as the prices at local merchants nearby you.

Or, consider this. There is an emergency; immediately, you need to physically locate a family member. Android will be able to do that too.

Here is the bottom line—free-markets always beat centrally planned economies; and similarly, Android will beat Apple and any other closed operating system. Due to compounding inherent in the market’s discovery process, five years from now, the Android powered mobile phone will be a gadget that we could hardly recognize today. In ways we can’t anticipate today, the long-promised era of convergence among all of our various electronic gadgets with different operating systems will be at hand. If Google is successful with Android, imagine next a Google computer with the open source operating system Linux. Imagine your phone seamlessly integrating with your computer. Imagine no longer having to gnash your teeth over whatever future proprietary operating system Microsoft will be trying to sell. If I was Microsoft, I would be very scared. But then again, those in Microsoft who urged a movement away from proprietary software have long ago been forced out of the company.

A world without Windows is hard to imagine, but then again, so was a world with personal computers. Smart people make mistakes, because they can’t anticipate the power of markets to change the status quo. In 1977, when IBM and Digital Equipment Corporation (DEC) dominated the computer industry, DEC’s CEO, Ken Olsen, said, “There is no reason for any individual to have a personal computer in his home.”

Of course, there turned out to be thousands of reasons; but those reasons needed to be discovered by the market process. Android will unleash a new process of discovery, and the results are likely to be as revolutionary as the personal computer.

Parts of this piece may read like a gushing press release for Google. I assure you that I am not on Google’s payroll. With unrelenting bad news unfolding in the economy and the iron fist of government increasingly choking off innovation, it is good to know that American entrepreneurs are still busy changing the world and making all of our lives better in the process.

This is the free-market at its best. Without any direction from politicians, Google is about to revolutionize the world—again.