The Death Of Facebook

Facebook faces impending doom according to a recent study by Princeton researchers, John Cannarella and Joshua Spechler, who have proclaimed that “Facebook will undergo a rapid decline in the coming years, losing 80 per cent of its peak user base between 2015 and 2017”. As Facebook reaches its tenth birthday this month, will it last much longer?
Facebook currently has over 1 billion users worldwide, and a market capitalisation of around $130 billion. It might seem implausible to many that this giant company might collapse so rapidly. But this is exactly what happened to MySpace, the most visited website in the world from 2005 to early 2008. By 2011, it had all but disappeared. Even giant firms fail. This is the lesson of economic history, ever since companies operating on a truly global scale began to appear in the late 19th century. Of the world’s top 100 non-financial companies a century ago, in 1914, all with market capitalisations of many billions in today’s prices, most have either gone bankrupt or are mere shadows of their former selves. Some of them disappeared very quickly. But while other companies have failed, as a Facebook user it seems ridiculous that Facebook will face the same fate in just a few years. It seems so ridiculous that it’s hard to believe Princeton University are even associated with it. Admittedly Facebook has become increasingly frustrating as it becomes the new ‘YouTube’, as your newsfeed becomes flooded with vines and other videos, but the number of active users on Facebook is ever increasing.
So how can Facebook die? Economists may refer to the observable attributes of the alternatives, such as price and quality. As Facebook is fantastically popular, it must be because the product not only provides features which many people want, but because it does so much more effectively than its rivals. A dominant market leader can only be displaced, on this view of the world, if either a superior rival emerges, or if there is some unforeseen and sudden shift in consumer tastes. This was the cause of MySpace’s death, which was killed by facebook and twitter which were substitute goods. But what’s killing Facebook? Not snapchat. Not Google+. Therefore we can rule competition out as a suspect for the cause of Facebook’s proclaimed death, as it remains dominant.
However surprisingly, these were not the arguments which John Cannarella and Joshua Spechler outlined in their report. They did not take into account Facebook’s features; rather they look at user behaviour based on network contacts. The researches stated, “… every user that joins the network expects to stay indefinitely, but ultimately loses interest as their peers begin to lose interest. Thus, a user that joins early on is expected to stay on the network longer than a user that joins later. Eventually, users begin to leave and recovery spreads infectiously as users begin to lose interest in the social network. The notion of infectious abandonment is supported by work analyzing user churn in mobile networks, which show that users are more likely to leave the network if their contacts have left.” However the mathematical and economical modelling used to come to this conclusion is totally flawed. That’s because they used a tool called Google Trends to see how often people searched for “Facebook” on Google over the years. They saw Google searches for “Facebook” decline, noted that when MySpace and Bebo waned, so did Google searches for those terms, and came to their dire conclusions.
So why is this a big deal? Because when a big news outlet like NBC News run;s a story, people believe it. They don’t stop to read the original paper and if they did, the academic jargon would make it incomprehensible to most. But it has an effect. Facebook is a publicly traded company. A story like this could affect the stock price and change the valuation by millions. It could also be the sort of thing that creates the end it predicts by convincing people that Facebook is dying and they should go somewhere else. Therefore the natural reaction of an economist is to make the prediction that John Cannarella and Joshua Spechler were motivated by the possibility of buying cheap shares. The incentive of making a fortune outweighed their loss of reputation or credibility after producing such a flawed conclusion.
Facebook’s response to the Princeton study was quite amusing, mocking the outrageous modelling they used to come to their conclusion. They used Princeton’s Facebook “likes” and “peer reviewed articles” and evaluated them over time. They noted an alarming downward trend of Princeton’s Facebook “likes” and made a conclusion based on the similarities between student enrolment and Google Trends index. From this, Facebook concluded that Princeton would also suffer a decline in enrolment of 50% by 2018.

According to CNN, “Princeton received 24,498 applicants for its current freshman class and accepted only 7.4% of them, ensuring its status as one of the nation’s elite universities. And as of September 2013 Facebook had 1.2 billion monthly active users.” Neither institution is really in any danger of disappearing any time soon.

By Sam Timmins

Does the UK spend too much on welfare benefits?

The modern welfare state and benefits have their roots almost 500 years ago in the form of Poor Laws. These laws were made to keep the homeless population off the streets and make them work in places like factories. However even after these measures had been put in place, in the late 1800’s it was proven that up to a third of the population still lived below the poverty line. This prompted the Beverage Report (1942) which found out that society suffered from the five Giant Evils. The report said that these were squalor, ignorance, want, idleness and disease and suggested benefits as a method to combat and eradicate these evils from society.

Benefits, as we know them today, were introduced after the First World War to support poorer people as a short term measure until they found work. These benefits, especially unemployment benefits, were not designed as a long term investment and each person receiving them would be reviewed after 6 months. Another reason for the introduction of benefits in the UK was to stop mass unrest because of the recent war. Benefits also helped families cope with separation and deaths due to the conflict.

Benefits allowed people to be lifted out of absolute poverty and gave them a fighting chance to compete with the privileged classes. By and large this has worked as desired but as any system it had its failures. There is a strong perception that the benefit system is widely abused, and that it promotes laziness which manifests into a way of life among generations who depend on benefits and never ever venture out to work. This is grossly unfair for the majority of families who work hard to achieve greater living standards.

The UK Government has to re-look at the current level of spending not by choice but more so due to difficult economic conditions. Many measures have been introduced by the coalition government to pull back run away expenses for example; people are enforced with an under occupancy penalty which has been labelled as “Bedroom Tax” (If there are more bedrooms than occupants in a council house, the residents are fined) by the opposition, along with tougher checks on people claiming unemployment, disability benefits.

The UK government hopes that by radical changes, benefit system will reflect the demands of modern age but also not dilute the core principles of welfare state (i.e. to support under privileged sections of the society). Benefits is an emotive subject to the wider public and is exploited by all major political forces in the country as a political instrument for capturing larger percentage of votes. In my view benefit system is much more that pure politics; it’s fundamentally an economic issue than political (i.e. as a nation can we afford such unsustainable expense?). Any expense that has no control or oversight will be abused no matter how noble the underlining desire is!
It is predicted that the UK will spend 16% of the budget on welfare in 2015; this is almost 120 billion pounds spent annually on welfare.

Out of the total almost half (46.32%) of the welfare expense is spent on Pension and rest constitute what we loosely categorise a “Benefits” in the public domain. If we analyse further under “Benefits” we see a big chunk of expense is Jobseekers allowance. Our focus should be towards modernising Pension funding and increase employment through encouraging Private enterprise. Political parties in government are tackling the smaller and less funded benefits such as Carer’s Allowances, Financial Assistance Schemes and Incapacity Benefit because they are easiest to cut and can demonstrate to the wider public that the government is tough on benefit frauds, thereby creating a positive political image rather than deal with difficult and more complex policy issues of Pension restructuring and employment generation.

In conclusion if we manage to tackle the complex subject of Pension funding and create an environment of higher employment then I don’t think we need to really push for changes to benefits that are genuinely supporting weaker sections of the society. With that assessment I agree that we cannot afford the current level of benefit expense and that we are spending too much on benefits, but the solution should be based on sound economic footing and not a political show to gain more votes.

contributed by Chinmay Joglekar

Should Scotland Become an Independent Country?

There are many reasons why Scotland should not become an independent country, and in this essay, I will explore these various views.

I agree with the fact that Scotland shouldn’t become an independent county. This is because Scotland would face financial problems. Firstly, the UK is the most successful economic and political union of modern times, and therefore Scotland is a recipient of the benefits that come with this status. Because of the UK’s economic success, change needs to be slow and careful. Secondly, giving Scotland control over how they tax and control welfare would impact all parts of the UK, as the amount of income the UK receives would change and therefore more cuts would be needed, though the costs of Scotland would be reduced. As a result of the cuts, reform for the UK parliament and undermine unity in parliament. Thirdly, on its own, Scotland would face bigger financial risks, as the security of the UK being behind Scotland would go away, and with that will go investor’s confidence, as it would mean Scotland turning to the Up for help in the event of a financial crisis would be next to nothing. Because of this, Scotland would probably rely on foreign bank and be in competition with its largest and closest neighbors. Ireland is evidence for this and what can happen in a financial crisis, where they fought against being part of the UK and now, as they face a crisis, are unable to ask for help from the country they turned away, and many Irishmen are moving to the UK for that exact reason.

A person that would disagree with me would be Alex Salmond. He believes that Scotland should become an independent country, because firstly, the UK fails to recognize Scotland’s unique needs, and that Scotland interests will always be second to the UK. Secondly, the UK is run by parties that Scotland rejected (namely the Conservatives) and therefore, what the UK decides for Scotland might not be favoured by the Scottish population. Thirdly, he believes that Scotland needs to take responsibility for the taxes it imposes as a result of its own spending, and therefore taxes could potentially be lower in Scotland as it doesn’t have to cover some of England’s spending. Lastly, there is no reason why Scotland cannot control its own destiny, become equal to England, and take its full place in the world. Scotland and England would remain firm friends via the EU, which Scotland would remain in. Also, Scotland would have the North Sea oil to turn to if financial circumstances turned on them.

However, this view is flawed because Scotland’s rulers chose their destiny via the Stuarts (James VI) and merging with England. Also, would Scotland be able to keep up all their promises before they go bankrupt. The oil is a finite resource so will not provide Scotland with the necessary funds. As they will be a small nation with no certain future they will have no bargaining power in the UN. Also, think of the benefits the United Kingdom has for Scotland: the BBC; the NHS; easier to visit; the businesses; the UK’s strong military; the allies; tuition fees? Scotland will be too busy setting up on its own to be able to afford to maintain these things and it’ll have to invest all of its remaining money on getting resources for its residents to survive on, setting up a new currency. It will be Ireland all over again, when Scots move to Britain to gain back these “luxuries”.

In conclusion, Scotland should not become independent, because of the risks to its economics and its residents.

Contributed by Jeffrey Chong

Should There Be A Greater Emphasis At School On The Sciences And Maths, Rather Than The Arts And Languages?

I do not think that there should be a greater emphasis on sciences and maths in schools than arts and languages because arts and languages provide excellent life skills. A prime example of this is art itself as it allows you to express your thoughts and has few boundaries so you can do what you want in whatever way you want. It can help young people express their emotions and allow them to think more deeply and creatively and all of this is backed up by evidence from the Education Fund of America. Arts subjects also give students an important break from the usual hard working, factual and intense lessons like the sciences and maths and gives them a chance to relax and be creative.

Languages are also extremely important in the world. They open many more university and college options as colleges and universities rightfully believe that everyone who goes to their institutions should know the grammar of a modern foreign language and the culture of another country. It also gives a wider range of job opportunities as many jobs these days involve travelling to other countries and communicating with people there. Companies and organisations prefer this as it means business is easier, quicker and often more successful as there are no difficulties.

Understanding another language allows students to go and explore other places and invest their minds in other cultures due to the large amount of cultural teaching in language classes as well as grammar. They can see beyond their own ways in their own country and it opens them out to different people in a fun and interesting way. This contributes to the fun and enjoyable parts of learning language and is probably one of the best aspects. It also gives you confidence when travelling to another country on holiday or business as you know that you can sort out any problems and get around easily.

The skills involved in languages are also very important in all aspects of life. They include listening, reading, writing, and speaking which all allow us to communicate in different ways and ways which are suited to us. Statistics from the CIA World Fact Book also show over 80% of the world’s population do not speak English and therefore people should not think that everyone speaks English which would often be people’s response to this question.

Research from The Association of Foreign Language Teachers in New York showed that primary school children who were exposed to languages highly outperformed students who did not learn a language. It also showed that countries where the arts and languages are compulsory to a high level have the best science and maths results, such as The Netherlands and Hungary.

Many students much prefer the arts especially as they are an enjoyable break from the usual daily routine of lessons. For some other students it is extremely important as if they do not enjoy maths and science or do not do well in them in exams, it is essential that they have something else which they can work on and try to excel in and be recognised for.

Overall I think it is vital for children and students to have a good education over a broad range of subjects but especially in the arts and languages as I have outlined in this essay.

Contributed by Tom Dunne

Animal Rights in a Secular World

For the recent chunk of human history, societies have been supported by the vast legs of religion and its devout moral codes. We have looked to scriptures, tablets and holy books for ethical guidance, and instructions on how to live. However, those foundations are crumbling, with a new secular world order beginning to sprout from the dying body of religion. The old religious principles are slowly becoming redundant. Yet, it appears that some of their deeply ingrained concepts have permeated the social consciousness, and have embedded themselves in modern standards, despite the loosening of the religious grip and the rise of atheism. An important idea that has remained in the worldwide consciousness is the concept of dominion – that humans have control over animals and the environment due to a greater intrinsic value. However, can this idea of intrinsic value, deriving from concepts of the soul, be applied to our increasingly secular and materialist world?

Let’s have a look at dominion. In Christianity, it derives from a belief in the soul and the principle of Imago Dei, which states that humans were made in the image of God. These ideas, according to some Christians, give us greater intrinsic value than animals and plants (who don’t harbour these characteristics – they were not given souls) and place us above them in the Great Chain of Being. Essentially, our divine animation places us above the ‘beasts’, meaning we can do whatever we want with them, including using animals for food and as a means to our end, such as in medical experimentation.

One might argue that prehistoric humans, with no known notion of religion, still killed animals for food, and therefore dominion cannot be considered a religious concept. However, the technology did not exist back then to measure pain and consider the rationality and autonomy of animals as we currently do, and thus there was no possible method of comparing animals to humans. Therefore, dominion in our age can be considered a non-secular concept.

There are perks to dominion, such as the use of animal meat as a food source and reducing experimental risks to humans. However, although the human race is waning off religion and entering a more materialistic age of belief, this old groove has remained; this idea that animals can be extorted for human means. To most people, the human subjugation of animals is considered a norm, due to the concept of dominion still lurking in the dark, musty recesses of our minds. Yet with atheism on the rise (25 % of England and Wales classify themselves as having no religious beliefs), a materialistic worldview seems to be incompatible with our current treatment of animals.

To understand this, we’ll have to backtrack to religious morality. Theists argue that without absolute and deontological rules to live by, morality becomes relative and leads to social disorder. This is largely considered to be a flawed belief, as there is no convincing evidence for the existence of a divine being, subsequently refuting Divine Law, from which theists pluck their moral codes.  Subsequently, it has seemed rational for people to switch to a materialistic and naturalistic worldview, where only physical interactions occur. This is the crucial point at which we have changed our beliefs, but forgotten to re-establish ethics concerning the treatment of living beings. Why don’t we formulate some rules?

Firstly, we are able to rule out the application of ethics to non-living matter, such as rocks, due to unobserved and unmeasured rationality, autonomy or ability to feel pain (caused by material interactions, if we are to follow this worldview). Plants can also be ruled out due to not meeting the criterion of self-consciousness. Thus we come to the dilemma of whether humans and non-humans can be considered equal.

Secular ethics based on materialism cannot make the distinction between humans and non-humans, as both parties are capable of rationality, autonomy and self-awareness and both are capable of feeling pain. If all living matter is fundamentally equal, inequalities in different forms of such matter are absurd without a moral principle that places humans above animals.  If the Golden Rule is applied here (do unto others only that which you would have done unto you), current treatment of animals can be considered a form of discrimination: ‘speciesism’, according to Peter Singer. It is impossible to tell how much pain a lamb feels when slaughtered, yet we can measure a lamb’s material reactions to pain, just as we can in humans. Both animals and humans meet the criteria, so what’s the difference? Why not slaughter humans and sell their meat in supermarkets? According to materialism, it’s perfectly acceptable.

This is the problem, limiting our morals and ethics to the human race is now becoming arbitrary when we apply materialism to ethics and are forced to consider animals to be on the same grounds as us. In a secular world, any action that causes harm to a being must be treated equally, regardless of the being. The loss of the belief in an intrinsic human value has downgraded us to the level of beast, and to think otherwise would be speciesism.

Theoretically, animal equality is a sound argument, and one that highlights the ethical fallacies deriving from purely material beliefs within a secular worldview. However, it may not be pragmatically feasible, as meat contributes largely to the global food economy, with the meat and poultry industry contributing $832 Billion to the US economy alone. It will be a hard task to end animal slaughter and maltreatment for human benefit, but one that will hopefully come to fruition if we wish to live by coherent ethics.

Contributed by Mustafa Majeed

Epigenetics – The Return of Lamarck

203 years ago a scientific theory was released that took the evolutionary world by storm. Darwin was less than a year old when Jean-Baptiste Lamarck released his book Philosophie Zoologique in 1809. Data collected from his time as Professor at the Natural History Museum in Paris had thrown up a revolutionary new idea in the scientific world – inheritance and evolution were truly born. Later, Darwin started his confused life literally probing and testing evolutionary theory. Since its publication on 24th November 1859, The Origin of Species has been at the forefront of scientific research, helping explain the complexities seen in the natural world. Now the world of epigenetics is turning the tables, taking Lamarck and placing his ideas back in the limelight.

The epigenome is a relatively new field of research. An epigenome is a small chemical compound that sits atop of genes. Methyl marks add themselves to the DNA bases and proteins called histones wrap around the protein bases. Combinations of molecules can attach to so-called “tails” on the histones and affect the DNA that the histone is wrapped around. These two types of epigenomes are both environmental. They are not affected by inherited chromosomes; instead they are changed and developed during a person’s lifetime. The best example of this is a study by Dr. Lars Olov Bygren in the 1980s. He took a random sample of 99 people from a remote Swedish village of Overkalix and used historical records to track their parents and grandparents, and then cross referenced this with how much food had been available to each generation. They went back from the 1980s to 1905. Their results conclusively showed that parents who were gluttonous and had ample food had children whose life spans were shorter by roughly 6 years.

As such we arrive at an issue. Epigenetics suggests environmental changes affect inherited genes, and thus the age old debate can be rekindled with a new twist; are we in charge of our own decisions? Centuries ago we were told by religious priests, rabbis, imams and vicars that gods are in charge of our fate. Lamarckian theory that what we eat or what we do may affect our genetics also suggests that we are not in control of our fate; science has brought back the idea of predetermination. If the theory is correct then predetermination has already decided important events in our lives such as our intelligence, physical capabilities and when we eventually die – possibly even by what cause.

Predetermination itself raises a moral issue in our secular society. The fact that someone can blame their genes for any action that they take means that they can claim to not be responsible. Ethically this is not morally acceptable for the rest of society to take the burden and to have to let people off without charge. As such this cannot be allowed to happen.

However what is more important is the scientific problem that arises as a result of epigenetics. Our secular society is built upon a set of moral and scientific principles that are in themselves absolute and cannot be broken under any circumstances. Epigenetics brings Lamarckism back into question. Darwinism and Lamarckism are opposite sides to the evolutionary argument. Current scientific principles are such that only one theory can be correct, however clear evidence for both Lamarckism and Darwinism exists. Neither can be disproven without using the other as an explanation; and with the rise of epigenetics the evidence is as strong for both sides. Darwin’s greatest theory is often downplayed in science lessons, and Lamarck is mentioned only as the theory that Darwin disproved.

183 years after his death Lamarck is yet again causing an upset, but against science this time not religion. Although not with us today, Lamarck is still wise beyond the grave. In arguably man’s greatest time: “the great age of the earth will appear greater to man when he understands the origin of living organisms” – from ‘Hydrogéologie’ by Lamarck (1802). We all know where we stand scientifically and ethically in the natural world. Hopefully one day we will understand how we got here, the true science of evolution.

Contributed by Andrew Wood

Population dynamics: Sustainable populations

Many countries face issues when it comes to population and matching supply with demand. In order to comply with changes within a population, countries develop policies and systems whilst also coming up with innovative ideas to maintain quality living spaces.

A prime example of population dynamics is China and the famous One-Child Policy. This policy is applied as a result of an overflowing population which outgrows the resources available and poses serious stress on the state. The One-Child policy aims to alleviate this by allowing every couple to only give birth to a single child and thus halving the population in every household over the generations. Issues do arise from this however, for example it stimulates a rise in selective childbirth. Boys are thought to be the economic force ofChinaand can also help parents in their old age. Therefore, boys are preferred, and this leads to increased amounts of female infanticide, killing female babies to make sure that the parents had a boy. Abortions are also carried out more often with the use of ultrasounds to avoid parents having a female baby.

Due to a greater amount of abortions occurring in the country, the Chinese government decided to make the practice illegal, but it still continues. As a result of the One-Child policy there is now a noticeable gender imbalance in the country. Government incentives, such as tax rebates and bonuses, were also introduced to encourage bigger and smaller families depending on whether the population was too great or too small for the resources available in areas of the country.

In Singapore, similar proposals were made in order to deal with population dynamics. A ‘Stop at two’ policy was introduced to control rapid population growth but had to be altered due to too great a success with the policy – the population was starting to decline. This occurred as a result of families realising the benefits of smaller families such as more money available in the family which leads to a higher quality of living. Women were also beginning to diverge from the conventional ideologies of what a woman has to do and hence, started to pursue careers rather than sit at home all day. The government responded to a decrease in population levels with a ‘three or more, if you can afford it’ slogan and policy to address the social side of the issue. The main aims of the new policy were to deal with an ageing populace and rejuvenate the whole population. Incentives that the Singaporean government introduced to promote childbirths included a rebate of $20,000 for a fourth child and more for additional children – easing the stress and strain that families, especially younger ones, would face in terms of the financial burden and as a result they would be more confident and likely to have a greater number of children.

On the whole, governments are able to deal with changing populations with the use of various policies and propaganda. When looked at more closely however, the effectiveness of all these are dependant on the susceptibility, mindset and cultures of a country. As well as immigration affecting population numbers, which can be dealt with quotas and barriers, migrants in a country can affect population dynamics on a regional scale within a country which follows a similar structure to that of which is on a national scale.

Contributed by V Mankaleswaran

Living Spaces

Everyone needs a living space, whether that is a mansion in the countryside, to a semi-detached house in the suburbs or a flat in the city. As young people, we couldn’t decide where to live in our early years. That decision was down to our parents or guardians, and we’re forced to live in places such as Tolworth, Hounslow or Surbiton. But as we develop a network of friends and become familiar with our local area, we become emotionally attached to our living space, and that can make it hard to move. For instance, there was a survey of Scottish adults to see how content they were with their area. Surprisingly, in all areas of Scotland apart from large urban areas, over 90% of the adults rated their area very or fairly good and 89 % of adults in large urban areas rated their area very or fairly high. It also found that only 5% of adults said that there was nothing they particularly liked whilst almost 50% said that there was nothing they particularly disliked. You have to consider though, that most A Level students across the UK, said their current residence as their first choice of where to live, with London as their second. However, different areas give advantages and disadvantages. Cities provide convenient shops, good public transport, and a nice landscape, but people have to deal with some less desirable aspects of city life, such as vandalism, preconceptions of young people and drug abuse. However, some prefer the landscape, good views and safeness of rural areas, but have to put up with the drawbacks of country life, such as the lack of public transport and leisure facilities and the poor local shops.

However, if you leave your current living space, you have to choose a new one, and different people want different living spaces for different reasons. Sometimes, this is down to age; Camden Borough has built lots of small apartments and flats that are suited to young people, because of the proximity to the city and the finance jobs held by this demographic, meaning that the population is dominated by 20-30 year olds. Very few retired people live in Camden as they would prefer somewhere a bit quieter and more peaceful. And since the 1950s, there’s been a trend of people retiring abroad, especially to Spain; around 8% of state pensions are paid overseas to 900,000 British Citizens. People want to retire overseas because they reach retirement in good health, and the average age of retirement has decreased. Income and savings have increased, living costs are lower, and budget airlines mean that travel is cheaper. However, some return home to keep in touch with family and friends, and others return as they find that living abroad is not all that they thought it would be; whilst a few integrate into local culture. Urban to rural migration also happens in the UK; for example in 2007 around 105,000 people moved from urban areas to rural areas. People are attracted by lower crime rates, cheaper housing and a rural idyll. This has been reinforced by TV programmes which show attractive country villages with interesting characters, such as Heartbeat. Unfortunately, some rural towns are populated with so many in-migrants that they lose most of the original rural character that attracted people in the first place.

Despite counter-urbanisation, we remain predominantly an urban society, and how we manage our living spaces will shape human history forever.

Contributed by Thisura Mendis

Why are footballers paid so much?

Why are footballers paid so much

One of the most interesting issues for any young economist is, “Why are footballers paid so much?” This question highlights one of society’s most important issues; wages. This presentation provides an introduction to the issue and some pointers to help you formulate your own judgement on whether certain groups of society are worth their wages.

Contributed by Chris Parsons and Guy Thomson (Co-Presidents of Tiffin School’s Junior Economics Society)