Free brings more liquidity to any market place, and more liquidity means that market tends to work better. Free attracts people, but the marketplace efficiencies that come with Free ultimately keep them. The point is that the internet, by giving everybody Free access to a market of hundreds of millions of people globally, is a liquidity machine. Because it reaches so many people, it can work at participation rates that would be a disaster in the traditional world of non-zero marginal costs.

Moreover, free is not a magic bullet. Giving away what you do will not make you rich by itself. You have to think creatively outside the box about how to convert the reputation (links) and attention (traffic) you can get from Free into cash. Every person and every project will require a different answer to that challenge and sometimes it won’t work at all. People at times blame Free for their own poverty of imagination and intolerance for possible failure.

Free is a constant attraction across all markets, but making money around Free, especially when you don’t have millions of users (and sometimes even when you do), is a matter of creative thinking and constant experimentation. For example, most of the value of Facebook is in the fact that it has created perhaps the world’s largest closed market of reputational currency, which is the foundation of its estimated multi-billion dollar valuation. But Facebook is still unable to find a way to make money faster than it is spending.

Do you now know the negative implication of Free? People often don’t care as much about things they don’t pay for, and as a result they don’t think as much about how they consume them. Free can encourage gluttony, hoarding, thoughtless consumption, waste, guilt and greed. According to Google’s Eric Schmidt, “the problem with Free is that it eliminates all the price discrimination texture in the marketplace. Rather than a range of products at different prices, it tends to be winner-takes-all”. Free turns billion-dollar industries into million-dollar industries. But typically the wealth doesn’t vaporize, as it appears. Instead, it’s redistributed in ways that are hard to measure.

If you then want to compete with Free, you have to move past the abundance to find the adjacent scarcity. If software is Free, sell software supports. If your skills are being turned into commodity that can be done by software, then move upstream to more complicated problems that still require the human touch.

The conclusion of the whole matter is that, Free may not work for the products on your selves but if you want to break into the wealth that lies on the internet, your services must be tied around Free. Think about Google, Yahoo, Facebook, Youtube, Twitter, Craiglists, Wikipedia and the likes. Their services are Free and they are still one of the most valuable companies and websites in the world.

Free rules the world!

To know more about how Free operates, read;

“Free” by Chris Anderson

“How to compete with Free” by Harvard Business Review

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Automatically translated into Spanish thanks to WorldLingo

 

The lower the price, the higher the quantity demanded and vice versa” ceteris paribus.

This is the law of demand that have known right from my secondary school days but all through this years, my mind was closed to what happens to demand when the price is zero. Have even learnt about the free market economy, where the rules states that if you don’t have money, it is likely you die in poverty because it is a capitalist world. But the emerging digital economy is giving us a new side of economics called “Freeconomics”, an economy that is built on Free.

Free is often so hard to grasp because it is not a thing, but rather the absence of a thing. It is the hole where the price should be, it is a concept not something you can count on your fingers. Free can be in different forms, it can be totally Free indeed or that someone else somewhere is paying for you indirectly. My major concern is not the definition or the forms of Free but to examine the relevance of Free in this generation.

The generation we are now is a Google generation, where people are increasingly unwilling to pay for content and other entertainment, because they have so many free alternatives. This is the generation that wouldn’t think of shoplifting but doesn’t think twice about downloading music from file trading sites. They intuitively understand the economics of atoms (real products) versus bit (online products), and realized that the former has real cost that must be paid, but the latter usually does not. From that perspective, shoplifting is theft but file trading is a victimless crime.

Today, we know that the most disruptive way to enter a market is to vaporize the economics of existing business models. Charge nothing for a product that the incumbents depend on for their profits. The world will beat a path to your door and you can then sell them something else. It is now glaring that it doesn’t take a PhD to understand why Free works so well online. You just have to ignore the first ten chapters or so of your economics textbook. Free has made nonsense of the usual teaching in ECN 311 about pricing strategy.

However, some people have the perception that a product being Free means it is inferior or diminished quality but nobody has ever thought Google is an inferior search engine because it doesn’t charge. Although, this perception may be true about real products but it has been proved otherwise by online products. The web is built primarily on two non monetary units, -attention (traffic) and reputation (links) and there is a kind of network effect for online products i.e the more people use a product, the more other people feel compelled to do the same.

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Automatically translated into Russian thanks to WorldLingo

Spillovers also known as externalities are the costs or benefits associated with the consumption or production that are not reflected in market prices and fall on parties other the buyers or sellers. Also according to Due and Friedlaender (1973), spillovers arise from the interactions between the production functions of firms or utility functions of individuals that are not reflected in price charged for the goods. In this sense, it represent a market failure and it just the cost or benefit of economic activities to the society.
Spillovers can be positive or negative i.e. costs and benefits of spillover. The spillover costs are air pollution, noise, oil spillage etc and spillover benefits are related to that of public goods such as education, public health care, highways which are goods where it is difficult if not impossible to exclude people from benefits. However major concerns of the people are the benefits aspects of spillovers. People try to neglect the negative spillovers which are the social cost borne by the people for every human action. These negative spillovers have now been attributed to the cause of the present climate change problem raging the whole world.
The first economist to examine spillovers in modern terms was Arthur Cecil Pigou (1877-1959). He was able to talk and write extensively on the difference between the private value and the social value of economic activity. “Industrialists are interested, not in the social, but only in the private net product of their operations”, Pigou pointed out. To correct this negative spillovers, Pigou advocated the use of taxes and subsidies i.e. where the private value of and economic activity is more than the social value, it is appropriate for government to restrict the activity by imposing tax policy known recently as Pigovian taxes.
This Pigou’s great contribution was in the 1950s’ when it was not that relevant at all. Even when the issue of climate change began to come up, it was seen as a scientific, political or ethical problem. But Sir Nicholas Stern in an official report on the economics of global warming in 2006, said climate change is all of these things, but at root it is an economic problem. Stern warned that climate change “threatens the basic elements of life for people around the world - access to water, food production, health, and the use of land and the environment”. He concluded that climate change presents a unique challenge for economics and it is the greatest and widest-ranging market failure ever seen.
December 2009, the world conference on climate change was held in Copenhagen, Denmark to adumbrate the steps and actions that can be taken now, differently and together to ameliorate the recent change in seasons and weather of the earth. The world leader met not to take beautiful pictures together or drink teas and coffees alone but to discuss issues critical to the existence and health of man on earth. However, the conference did not yield the desired results in terms of getting the industrialized nations to commit legally to stopping the menace of climate change.
The UN’s climate process has for more than a decade been bedevilled by a binary split between developed and developing countries. Under the Kyoto protocol, only developed countries committed themselves to cutting emissions; developing countries made no such promises. That was the main reason why Kyoto failed, because America would not accept a treaty that required nothing of countries such as China, and China insisted that the rich world should bear most of the cost of constraining emissions. At Copenhagen, developed countries were determined to move beyond this structure; many developing countries to hang on to it. That was the obstacle on which the conference foundered.
The activities of the man on the planet earth have been found to have adverse effects on the globe to the detriment of man himself. From the felling of trees for firewood to the emission of poisonous chemicals into the atmosphere, the contamination of the water body brought about by industrialization, dumping of wastes due to activities of exploiters of crude oil and many other human activities, the world today is crying of an imminent catastrophe if necessary measures are not taken.
Cars, buses and trucks are the principal ways by which goods and people are transported in most of our cities. These are run mainly on petrol or diesel, both fossil fuels. We use huge quantity of papers and make a lot photocopies in our work at schools and offices but have you ever thought about the number of trees that we use in a day? Timber is used in large quantities for construction of houses, which means that large areas of forest have to be cut down. We generate large quantities of wastes in the form of plastics that remains in the environment for many years and cause damage. All these activities exacerbate the climate in the form of desert encroachment, depletion of the ozone layer, reduction in the volume of rainfall which is tantamount to increased agricultural productivity and destruction of arable farmlands, aquatic life and plaques.
Developing countries particularly the poorest and the most exposed will bear most of the cost- 75-80% of the potential damage from climate change. Most people in the developing countries live in physically exposed locations and economically precarious conditions, and their financial and institutional capacity to adapt is limited. Many developing countries have neither the resources nor the technology to defend against rising sea levels, increased incidence and ferocity of tropical storms and expansion of tropical diseases. Developing nations are caught between a rock and a hard place in the global warming debate; understandably they want the right to economically expand the fastest way they can, like developed countries have been doing for the past 100 years. Therefore, at the Kyoto Conference they were the most hesitant to agree to any sort of convention that required them to limit their Green House Gas (GHG) emission.
According to the Nature report (2009), the developing countries have contributed the least to warming the earth but they are the most vulnerable to the death and diseases higher temperatures can bring their economies, frequently heavily dependent on manufacturing and energy costly industries, they increase the risk that they will be ill-affected by global climate changes. Developing countries face a difficult decision, whether to sacrifice their economic development for protection against possible ecological problems in the near future.
“Developing countries face 75-80 percent of the potential damage from climate change. They urgently need help to prepare for drought, floods and rising sea levels. They also need to intensify agricultural productivity, contain malnutrition and disease and build climate-resilient infrastructure” said Justin Lin, World Bank Chief Economist and Senior Vice- President, Development Economics.
The Green Sermon
Government of various countries must at this point in time save the future by imposing higher taxes on gasoline and other sources of carbon dioxide as prescribed by Pigou and also governments can pass laws and regulations to address pollution, illegal disposal of toxic wastes, deforestation and other environmental harms. These laws and regulation can take the form of “command and control” regulation (such as setting standards, targets or process requirements), but these have to be implemented with some sequencing and pacing most especially in the developing countries so that this kind of policies won’t drag more people in to poverty.
Governments also need to act now because today’s decisions determine both the climate of tomorrow and the choices that shape the future. Governments need to act together because no one nation can take on the interconnected challenges posed by climate change, and global cooperation is needed to improve energy efficiencies and develop new technologies. Governments need to act differently because we cannot plan for the future based on the climate of the past. Individuals also need to aid government in their war against climate change. Let’s use less of paper, plant trees and grasses around our houses, stop burning of bushes and refuses, use florescent bulbs and dispose our debris properly.
About the author
Onigbinde Seye is a graduate of Economics in Obafemi Awolowo University, Ile-Ife, Osun State, Nigeria. He was the Editor-in-Chief of the Economic Insight, a press outfit of the Department of Economics, Obafemi Awolowo University. He is the CEO of Anointed Concept Technology, a graphics and web solution company and a member of All-Nigeria United Nations Students’ and Youth Association. He is a data, socio - economic and political analyst, an advocate of a green world.

“The immediate source of disconnect between Nigeria’s wealth and its populace is the failure of governance both at the state and the federal level”
-Hillary Clinton
Good governance encompasses the quality of leadership in its capacity to govern effectively, the consistency of policies and the efficiency of institutions in providing qualitative public goods and social services for the majority of citizens. At the minimum level, it includes accountability of those in government to the governed, transparency, due process and rule of law as well as a political system that allows for popular participation in the decision making process of selecting the leaders. Good governance demonstrates that there is a strong correlation between the quality of a country’s governance and institutions and the success in achieving growth and improving the quality of life of the entire populace.

At independence in 1960, we know we could not rewrite the past, but we could make a bold commitment to changing the future. We all need inspirational and visionary leadership that would perform effectively and deliver for the people. Unfortunately, most of these heroes of our independence were swept aside, as the second group of exploiters of our people and our wealth took over. That group has consisted majority of our national leaders since the colonial masters quit our country. Instead of ensuring state and individual security, a functioning rule of law, education, health and an economic framework conducive to trade, growth and prosperity, they in many cases have entrenched despotic power to pursue personal enrichment. They have been craze for wealth at the expense of national development. They have lost the national zeal to develop and push the nation forward to the level at which it would be reckoned with for good by the developed countries. We the so called Giant of Africa have become the butt of jokes in the international arena. We and the international communities are all scared of the future of this country, speculating and asking ourselves, we Nigeria be a failed state?

Corruption however is a kind of phenomenon that cannot be separated from governance. It has been the major unresolved problem disturbing Nigeria. It has done a lot of astronomical damage to our polity. Corruption is a global phenomenon that is not peculiar to any continent, religion, group but it is pandemic in Nigeria (and in many other African and Asian nations). It is an issue that keeps reoccurring in every academic and informal discussion in Nigeria. Derived from the Latin verb “corruptus”, it symbolizes a breakdown of ethical and moral values, of systems and institutions of governance and of societal traditions and personal behaviour (African Development bank, AfDB). Corruption is both a symptom and an outcome of poor governance. It involves the violation of established rules for personal gain and profit. “It is effort to secure wealth or power through illegal means, private gain at public expense; or a misuse of public power for private benefits”,(Lipset & Lenz, 2000).

The World’s bank in it report titled “Africa Development Indicators (ADI) 2010” focused on a new dimension of corruption “quiet corruption” which has led to an increasingly negative expectation of service delivery systems, causing families to ignore the system. It is behind the failure of public servants to deliver goods or services paid for by government. According to the World Bank, “Quiet corruption does not make headlines the way bribery scandals do, but it is just a corrosive to societies”’ said Shanta Devarajan, Chief Economist for the World Bank’s Africa Region. Tackling quiet corruption will require a combination of strong and committed leadership policies and institutions at the sectoral level and most important increased accountability and participation by citizens,” Devarajan said.

Meanwhile the menace of corruption in Nigeria had led to the slow movement of files in offices , police extortion tollgates, port congestion, queues at passport offices and gas stations, ghost workers syndrome, election irregularities, among others. The effects of corruption on the nation’s socio-political and economic development are myriad. The negative economic growth, among other things, reduces public spending on education, level of investment standard of living etc. Reduction in the spending on education in the sense that corrupt government officials would shift government expenditure to areas in which they can collect bribe easily. Large and hard-to-manage project, such as construction of ghost airports or highways and some other white elephant projects, make fraud easy.

In addition, the abject poverty and the high income inequalities rampant in Nigeria are tied to corruption. Development projects are often made unnecessarily complex in Nigeria to justify the corrupt and huge expenses on it. Corruption and bad governance swallow about 40% of Nigeria’s $20 million annual oil income as at least 100,000 barrels or 4% of national oil export are stolen everyday. Despite our oil riches, sixth largest producer of gas and sixth largest exporter of oil, more than70% of the population live below the poverty line,. Nigeria which was one of the richest 50 countries in early 1970s has retrogressed to become one of the 25 poorest countries at the threshold of the 21st century. 65% of Nigerians remain food insecure as we are named as the 2nd largest imported of food in the world all because of our high level of corruption, bad governance and economic mismanagement.. Nigeria is among the 20 countries in the world with the widest gap between the rich and the poor. It has one of the highest gini coefficient index in the world.

Ironically, fighting corruption in Nigeria is as old as the phenomenon itself. In fact, fighting corruption was a popular justification for successive coup d’états that have taken place in the country. Few years ago, the government established anti graft agencies, the independent corrupt practices and other related offences Commission, the Economic and Financial Crimes Commission and instituted Due process unit, all too fight corruption to the barest minimum. These agencies have been able to achieve successes through the prosecution of hundreds of offenders including some high-profile public office holders and recovery of looted funds. But all these agencies have not been able to perform to the fullest due to incessant government interference in most cases handled by them. They are not truly independent.

However, for us to tackle corruption sincerely, the society must develop a culture of relative openness (i.e transparency) in contrast to the current bureaucratic climate of secrecy. The freedom of information (FOI) bill should be passed to law so as to allow every citizen of the country to have access to public records such as contracts, budgets provisions, legislative votes, and other government decisions. The country should try to get rid f regulations that serve little or no purpose and a merit system (instead of the tribal bias and nepotism or favouritism, which have coloured the landscape) should be adopted in employment and distribution of resources. Ethical standards should be strengthened throughout the agencies of government and business organizations in Nigeria. Also, our anti graft agencies should be independent in all their ramifications so that the beast called corruption can be cast out.

Nigerian Youth: It is time!
“Nigeria is bogged down by failure of governance at all levels, mismanagement and corruption and concentration of wealth in few hands”
- Hillary Clinton

So many people call us the future leaders, they call us the future of the nation but we keep on asking ourselves, when will the future start? Or has the future already started? Over the years, the governments of this country have been in the hands rulers who have no passion for the future. They believe the future will take care of itself. They’ve enjoyed their own life and even eaten up the future so that nothing will be left for the country just because of their own selfish interest. All they want to hand over to us is a failed state, a state where nothing will work. They have stolen much of our collective wealth and left us with little to fight our massive and abject poverty .They have created a segregated country which has led to series of massacres and made us to see each other as enemies –the north and south dichotomy –not as a nation. They have failed to give us appropriate infrastructure fit for economic competition in a globalized world. They have not even given us the level of peace and stability needed to attract sufficient foreign investment that will spur our development. They have refused to diversify our economy despite the billions they have earned from oil.

We have had twenty-nine year of our almost fifty years of independence under military adventurism and twenty under the democratic dispensation but each administration ended up compounding our problems. After suffering from the hardships which the military have inflicted us with, we embraced democracy with all enthusiasm hoping that it will liberate us from authoritarianism and serve as a vehicle for transformation. But democracy which ought to be the basis for governance has been bastardized. It now act as a silent partner in all the unholy enterprises-embezzlement, intimidation, lawlessness, seduction and corruption, which has violated the social contract between the trust-holders of we people (i.e government) and we citizens.

Nigeria really has the right indices to become to become the focal point of global economy. With a rare bundle of intellectuals, vast array of fertile land, natural resources and a developing market , we are suppose to be the tunnel of cherished hope . Being the tenth most populous nation on earth, Nigeria ought to be linked to a blossoming future by taking power from the West. We used to be accorded respect as the leading country in West Africa and Africa, we command 50% of the West African economy and our peace keeping force has left giant footprints on the African soil but we have squandered that goodwill. We have become the butt of jokes in the international arena. Issues and news on Nigeria are no more breaking news on CNN and BBC. We are losing much capital and creating odious literature around the Nigerian brand and identity due to the failure of the political elite, the political party systems and the bureaucracy to act responsibly. Our reputation has depreciated to the extent that the Libyan President, Muammar Ghadaffi could open his mouth and recommend that Nigeria should split into two – what a shame!

“We run in Nigeria sadly, a state that is not driven by progressive ideology. It is a state that places more emphasis on opportunism and the reduction of nation-building to horse-trading. This is precisely why the institution of the state have not been able in any way to project the ideals....... the same citizens who are supposed to be at the centre of the state, are helpless because they lack direct influence on the levers of state, the state as institution has exposed its own moral dissoluteness . Is ours therefore a developmental state? Or a recursive state? Or a failed state” –Reuben Abati

We live in a country where we can never boast of uninterrupted power supply. We live in a country where the whereabouts and the health status of our President have been kept secret, putting the entire country in total darkness including his right hand man, Acting President. The whole country is now confused and has series of questions springing from their minds with nobody to answer them. Is Yar’Adua alive? Or is he dead? Or are we being deceived by the air ambulance that landed at the Nnamdi Azikwe Airport on February 24th? Or maybe he’s in another country receiving treatment? We live in a country where we don’t really know who is in charge. Is it Goodluck Jonathan? Or is it Turai Yar’Adua? Or Yar’Adua himself? Or a cabal? We live on a country where troops can be deployed to the airport on February 24th without the knowledge of the Commander-in-Chief of the Armed Forces Goodluck, or the Chief of army Staff, Gen. Abdulraham Dambazzau. But who gave the order? We live in a country where lives and property are not secure even with the presence of soldiers in the state-Jos. We live in a country where people that admitted publicly that the election that brought them in was faulty but still finds it difficult to amend the Electoral Act in line with the Uwias electoral Committee Report. A committee set up by the same people. We live in a country where the administration has been turned to a family affair and our fate is being determined by a kitchen cabinet. We live in a country where bribery and corruption, favouritism, oppression, injustice, nepotism, ineptitude, electoral malpractices, intellectual bankruptcy, political jobbery, politicization of ethnicity and other nefarious acts rule. This is the kind of country we find ourselves.

But something must be done to save this country. Our destiny is now in hands, we youth must stand on our ground and say with one voice that ENOUGH IS ENOUGH. We must stop colluding with the rulers to rape this country. We must stop any act of hooliganism, militancy, robbery and fraud that can truncate the image of the our country. We must step in the future right now and claim our right knowing fully well that the future we are all waiting for started yesterday and we are already late. Imagine a man of 70 years and above still serving in the post of minister- Riliwan Lukman or acting as governor-Olusegun Agagu in a country where we have vibrant, skilful, talented and dynamic youth. It is time to say NO to electoral malpractices, corruption, violence, ethno-religious crisis and retrogression. We must not allow the political monsters of this country whose sons and daughters are living abroad to use us as tools to disrupt elections. Let us rescue the country from the cabal of reprobate gangsters, extortionists, resources vampires, political murderers and assassins.

I fully convinced that with the current leaders we have, we are spinning in circles. They can’t fix anything in this country because we are led by those with the most dreaded thugs and sophisticated rigging machinery. They are tools of the invisible hand of cabal that hold this country by the jugular since independence. Leadership in Nigeria is a stagecraft and we cannot afford to keep watching from the stands. When will we have a stormy collection of our anger and decide to overthrow the status quo with defining leadership? We can afford to watch our nation out of idleness degenerate into a pariah state....... Enough is Enough, lets stand up for change. The future of this nation is one that scares me but we are the narrators and activators of the change process. We are the change we’ve been waiting for, let’s act now.

Last year December, the world conference on climate change was held in Copenhagen, Denmark to adumbrate the steps and actions that can be taken now, differently and together to ameliorate the recent change in seasons and weather of the earth or what has been termed Global Warming. The world leader met not to take beautiful pictures together or drink teas and coffees alone but to discuss issues critical to the existence and health of man on earth. However, the conference did not yield the desired results in terms of getting the industrialized nations to commit legally to stopping the menace of climate change.

The earth’s climate is dynamic and always changing through a natural cycle. What the world is more worried about is that the changes that are occurring today have been speeded up because of man’s activities. The activities of the man on the planet earth have been found to have adverse effects on the globe to the detriment of man himself. From the felling of trees for firewood to the emission of poisonous chemicals into the atmosphere, the contamination of the water body brought about by industrialization, dumping of wastes due to activities of exploiters of crude oil and many other human activities, the world today is crying of an imminent catastrophe if necessary measures are not taken.

Cars, buses and trucks are the principal ways by which goods and people are transported in most of our cities. These are run mainly on petrol or diesel , both fossil fuels. We use huge quantity of papers and make a lot photocopies in our work at schools and offices but have ever thought about the number of trees that we use in a day? Timber is used in large quantities for construction of houses, which means that large areas of forest have to be cut down. We generate large quantities of wastes in the form of plastics that remains in the environment for many years and cause damage. All these activities exacerbate the climate in the form of desert encroachment, depletion of the ozone layer, reduction in the volume of rainfall which is tantamount to increased agricultural productivity and destruction of arable farmlands, aquatic life and plaques.

Developing countries particularly the poorest and the most exposed will bear most of the cost- 75=80% of the potential damage from climate change. Most people in the developing countries live in physically exposed locations and economically precarious conditions, and their financial and institutional capacity to adapt is limited. Many developing countries have neither the resources nor the technology to defend against rising sea levels, increased incidence and ferocity of tropical storms and expansion of tropical diseases. Developing nations are caught between a rock and a hard place in the global warming debate, understandably they want the right to economically expand the fastest way they can, like developed countries have been doing for the past 100 years. Therefore, at the Kyoto Conference they were the most hesitant to agree to any sort of convention that required them to limit their Green House Gas (GHG) emission.
According to the Nature report, the developing countries have contributed the least to warming the earth but they are the most vulnerable to the death and diseases higher temperatures can bring their economies, frequently heavily dependent on manufacturing and energy costly industries, they increase the risk that they will be ill-affected by global climate changes. Developing countries face a difficult decision, whether to sacrifice their economic development for protection against possible ecological problems in the near future.

“Developing countries face 75-80 percent of the potential damage from climate change. They urgently need help to prepare for drought, floods and rising sea levels. They also need to intensify agricultural productivity, contain malnutrition and disease and build climate-resilient infrastructure” said Justin Lin, World Bank Chief Economist and Senior Vice- President, Development Economics.

Let’s act green , think green and green up !