Will Work for Praise: The Web’s Free-Labor Economy
By Stephen Baker, Senior Writer
December 28, 2008
Business Week

This online business model has Americans happily toiling for attention on for-profit sites that don’t pay them money

It’s dawn at a Los Angeles apartment overlooking the Hollywood Hills. Laura Sweet, an advertising creative director in her early 40s, sits at a computer and begins to surf the Net. She searches intently, unearthing such bizarre treasures for sale as necklaces for trees and tattoo-covered pigs. As usual, she posts them on a shopping site called ThisNext.com. Asked why in the world she spends so many hours each week working for free, she answers: “It’s a labor of love.” Later this morning, a half-hour’s drive to the west, a serial entrepreneur named Gordon Gould strolls into the Santa Monica offices of ThisNext. Gould has managed to entice an army of volunteers, including Sweet, to pour passion and intelligence into his site for free. Traffic on ThisNext is soaring, with unique visits nearly tripling in a year, to 3.5 million monthly. What’s in it for the volunteer workers? “They can build their brands,” Gould says. “In their niches, they can become mini-Oprahs.” Here’s how it works. Entrepreneurs like Gould build meeting places that provide visitors with tools to express themselves, mingle with friends and strangers, and establish their personal “brands.” The result, when it works, is an outpouring of creativity. It has produced not only ThisNext, but also YouTube and even American Idol.

Abundant Nonfinancial Rewards

You might think that with the economy crashing, the free-labor business model would be crashing, too. Will people continue to invest in their personal brands during hard times? Gould is betting they will. Between investor visits during a late November trip to New York, he sips a soy latte and speculates. During the downturn, he says, firings are sapping loyalty to companies and steering people toward goals of self-sufficiency. In Gould’s acerbic phrasing: “The only person I can rely on not to screw me—hopefully—is myself.” Beyond brand-hungry strivers, masses of free laborers continue to toil without ever seeing a payday, or even angling for one. Many find compensation in currencies that predate the market economy. These include winning praise from peers, earning an exalted place within a community, scoring thrills from winning, and finding satisfaction in helping others.

But how to monetize all that energy? From universities to the computer labs of Internet giants, researchers are working to decode motivations, and to perfect the art of enlisting volunteers. Prahbakar Raghavan, chief of Yahoo Research (YHOO), estimates that 4% to 6% of Yahoo’s users are drawn to contribute their energies for free, whether it’s writing movie reviews or handling questions at Yahoo Answers. If his team could devise incentives to draw upon the knowledge and creativity of a further 5%, it could provide a vital boost. Incentives might range from contests to scoreboards to thank-you notes. “Different types of personalities respond to different point systems,” he says. Raghavan has hired microeconomists and sociologists from Harvard and Columbia universities to match different types of personalities with different rewards.

Virtual Focus Groups

To date, he says, most of the research on recruitment and incentives comes from far simpler domains such as frequent-flier programs and cell-phone subscription campaigns, where goals and incentives are usually aligned. But the volunteer economy has many more variables. What are the signs that a participant will be enthusiastic and well-informed? How do leadership qualities manifest? Do recruits bring in networks of potentially productive friends? Researchers comb through petabytes of network behavior searching for telltale patterns. One of the current studies rates the probability that a person who’s gifted in one domain is likely to perform well in another. Communispace, a market research company near Boston, conducts similar studies as it enlists volunteer marketing consultants.

The company invites targeted people to join hundreds of social networks organized around certain products and services, from airlines to weight-loss medications. These are virtual focus groups. The volunteers provide insights on advertising campaigns and suggestions for new products. Manila Austin, a psychologist who heads up research at Communispace, says that 86% of the participants contribute to discussions and nearly 1 in 3 adds a fresh post each week. When Austin and her team experimented with financial incentives, they discovered that volunteers appreciated the gesture, but didn’t want payment. Participation rose when volunteers received a token $10 gift certificate as a thank-you. But raising the value of the certificates made no difference. “People want the validation that they are being heard,” Austin says.

Sharing the Winnings

Financial payments can, in fact, create tensions. For centuries humans have learned to distinguish between two different economies—the social and the market. Dinner guests, for example, satisfy social obligations by offering their hosts a bottle of wine. But, says Dan Ariely, professor of behavioral economics at Duke University and author of Predictably Irrational: The Hidden Forces That Shape Our Decisions, it would be a jolting intrusion of the market economy if guests instead handed their hosts a check. “It’s a very delicate line,” Ariely says, “and the modern workplace is right in the middle.” Bo Peabody, founder of Tripod, one of the earliest networking sites, and now a venture capitalist at Village Ventures in New York, points to a constant tension between free-labor entrepreneurs and their volunteer workers. Initially, users are “driven by a desire to express themselves,” he says. “But there’s a limit to how much they’ll do for free.” At some point, businesses have to figure out how to share their winnings with the volunteers. One of his portfolio companies, a software startup called Kluster, assembles people to brainstorm on everything from new inventions to corporate logos.

Those with winning ideas claim a share of earnings if the project ever makes money. Devising ways to reward free workers “is a very difficult jump,” Peabody says. “This is a theme running through our entire portfolio.” In the summer of 2006, Gordon Gould didn’t spend much time worrying about how to split ThisNext’s winnings with volunteer workers. Far more pressing was the need to lure thousands of volunteer workers to his new site. Here, like most free-labor entrepreneurs, he faced a chicken-or-egg dilemma: how to entice people to perform for a crowd that doesn’t yet exist? His answer was to create one. He and his team went out and interviewed a few hundred people—fashion designers, athletes, and activists—and then seeded ThisNext with their thoughts and recommendations. “When the first visitors came, there was a there there,” Gould says. The content on the site, he adds, had to be good. “If people come and see it’s lowbrow and ghetto, it’s going to stay that way.”

Goal: No. 1 Maven at ThisNext

Laura Sweet was an ideal candidate for the site. She had been laboring for free before she discovered it two years ago. Friends would long come to her house, point to things, and ask, “Where did you find that?” Sweet—who double-majored in fine arts and art history at University of California, Berkeley—wound up creating and lending out binders with details about her finds. Later, when she began locating strange and lovely things on the Internet, she showcased them in long lists of Web links and sent them out in bulk e-mails. She loved to share her discoveries, no matter how much work it took. Her blog’s motto, which could have been custom-crafted for Gould: “All the money in the world can’t buy taste.” Sweet’s first hit on ThisNext was a $400 fishbowl from Red Dot Design. When she posted it on the site, it quickly became one of the most popular items. She hunted for more finds to post.

As other visitors to the site found her gems, they gave them high marks, driving Sweet up in the site’s contributor rankings. She was becoming a star—what Gould calls a maven. On a recent afternoon, she clicked on the site to check her status. “I’m No. 1 in San Francisco, No. 1 in Washington, No. 2 in Denver,” she announced proudly. The unwritten quid pro quo between Gould and Sweet amounts to a boilerplate contract for much of the free-labor economy. Gould provides a stage for Sweet to strut her stuff, a platform to reach millions of shopping fanatics around the world. This is the key to his business. It draws advertisers to targeted sites populated with shopping enthusiasts; ThisNext gets paid for each click. He’s happy to give Sweet a boost by putting her in touch with media (including BusinessWeek). His team also sends mavens such freebies as skin cream and HaberVision sunglasses, which list at $200, Sweet notes. With this blend, Gould and other entrepreneurs manage to cash in on free labor—while glossing over the issue of financial remuneration.

Needed: A Handful of Black Swans

Making money is up to Sweet, who has a full-time job as a designer. She thinks that she might cash in on her stardom somewhere else—on blogs, books, TV, or even at a new job. (Her blog, http://ifitshipitshere.blogspot.com, gets tens of thousands of hits per week but has yet to make much money.) As far as Gould is concerned, Sweet is a freak, statistically speaking—and just the kind of freak he was banking on. Gould, who studies network theory, believes much of the free-labor economy would crash and burn if it relied on average people to handle the work. He’s looking instead for what the author Nassim Nicholas Taleb calls Black Swans—statistical anomalies. In his view, a mere handful of people rise to the top through a combination of smarts, good timing, and hard work. This elite is then thrust into superstardom by the links and recommendations of a large network. The select soar in the rankings, which leads them to produce ever more free product. As a result, fewer than 1,000 of the millions of visitors to ThisNext contribute the lion’s share of the work. (In graphic representations of this phenomenon, which is called the Power Law, they form the tiny head. Everyone else settles into what statisticians call “the long tail.”) The superstars are the mavens, and Gould owes his success to them.

Always a Surplus of Free Labor

Like most free-labor companies, ThisNext has a paid staff to keep the mavens happy. The employees’ job is to encourage, cajole, and direct the site’s elite contributors. Staffers are also responsible for policing the site. But in the most successful free-labor companies, the paid staff takes it one step further: They enlist volunteer laborers akin to a posse of sheriff’s deputies to take over their jobs, too. The message is that volunteers aren’t just workers. They can run the place. These days, Sweet has begun to wonder about payment, the real kind. Gould has called her and picked her brain, she says, asking her questions that she usually gets a “day rate” to answer. “I figure,” she adds, “that he at least owes me a sandwich one of these days.” But Gould, who tends to view his labor force statistically, has a theory. He thinks his superstars rise from the pack and then—with time—fall. Maybe they get tired or bored, or others get bored by them. In any case, mavens tend to revert to the mean. This means that one day Sweet will tumble down those charts in San Francisco, Washington, and Denver. Her reign can’t last forever. The trick in the volunteer economy is less to keep a superstar from quitting than to make sure that plenty of eager volunteers are ready to work to take her place.

See also: ThisNext

Communispace

Greenwash: Gulf’s green claims awash in a desert of deception
By Fred Pearce
January 29, 2009
The Guardian

The attempted green makeover by the Gulf states is beyond irony: with spiralling emissions, desert ski slopes and refrigerated beaches, can they be serious?

Last week the crown prince of Abu Dhabi held a big “future energy summit”.  Tony Blair was there wearing his save-the-climate hat, so was the Guardian’s Terry McAllister. Oh, and BP and Shell and Exxon and a host of other big energy companies keen to show their wares for saving planet Earth. But I have bigger fish to fry. The Gulf states themselves.They are in the middle of a green makeover about as subtle as a blowout at an oil well. The summit was part of it. The whole event was hooked on Sheikh Mohammed bin Zayed Al Nahyan’s plan for a carbon-neutral city in the desert, called Masdar. On its own, this city is quite interesting, with renewable energy, water recycling, green architecture and much else. But it will be a green bubble in a sea of unsustainability. When I spoke to one of Masdar’s PR people recently, almost his first remark was that “it’s close to the airport. We want to make it easy for people to come and see it”. And that’s the problem really. The Gulf states are keen to promote green kit – and will throw cash at it as if they were buying a Premier League football team – but have rather missed out on the purpose. It’s like changing to energy-efficient lightbulbs, but driving a Hummer to the shops to buy them.

If you don’t fancy an ecoconference or visiting an ecocity, you can fly to the Gulf for an ecoholiday – for instance on Kuwait’s “green island”, a holiday retreat on an artificial island “fortified with concrete” where “even the sands at the beaches were imported from other countries.” Which again rather misses the point. You can also take in an afternoon’s skiing at Dubai’s snow park – 3,000 square metres of artificially frozen snow in the desert. Or stay at the Dubai hotel that recently announced plans to refrigerate its beach so guests didn’t burn their feet. Dubai is, of course, the sleepy old gold-smuggling port currently being turned, courtesy of several hundred billion petrodollars, into a shiny new megacity. It must qualify as the world’s most environmentally unfriendly city. But that didn’t stop it from declaring itself Green Dubai last year so that it could, according to the government website, “take global leadership in sustainable development in light of global climate change crisis threatening mankind.” That’s greenwash on stilts.

To give you an idea how far the Gulf states have to go before they can claim “leadership”, look at their current carbon dioxide emissions. The emissions of the United Arab Emirates, which include Abu Dhabi and Dubai, have more than doubled since 1990. Right now, per head of population, they are above the US. Down the coast, Kuwait has double the per capita carbon emissions of the US. Top of the tree is neighbouring Qatar, which has quadrupled its emissions since 1990 to a per capita level more than three times those of the US. How do they do it? It’s not even as if they have anywhere to drive. Carbon emissions aren’t the only environmental issue, of course. I checked the WWF Living Planet index (pdf), which takes account of the total environmental footprint of countries, including land use. Last year it singled out the United Arab Emirates as having the highest per capita footprint on the planet.

We shouldn’t be too cynical. Some of the emirates do say they are genuinely trying to clean up their act. Tony Blair last week congratulated his hosts in Abu Dhabi on planning to generate 7% of its power from renewables by 2020. I wish the British government’s Carbon Trust well in pursuing its recently signed £250m deal with the Qatar Investment Authority to “investigate the creation of a low-carbon innovation centre” there. Qatar sure needs some low-carbon innovation. Likewise good luck to 20 Imperial College London scientists, after the announcement last week that they will be working with Shell and Qatar Petroleum on introducing carbon-capture technology to Qatar, “while maintaining its position as the largest gas-producing country in the world.” I’ll be very interested to see how it pans out, and whether Qatar’s emissions start to come down as a result.

See also: ‘Raw sewage threat to booming Dubai’ (BBC News)

How Green Is My Orange?
By Andrew Martin
January 22, 2009
New York Times

BRADENTON, Fla. — How much does your morning glass of orange juice contribute to global warming? PepsiCo, which owns the Tropicana brand, decided to try to answer that question. It figured that as public concern grows about the fate of the planet, companies will find themselves under pressure to perform such calculations. Orange juice seemed like a good case study. PepsiCo hired experts to do the math, measuring the emissions from such energy-intensive tasks as running a factory and transporting heavy juice cartons. But it turned out that the biggest single source of emissions was simply growing oranges. Citrus groves use a lot of nitrogen fertilizer, which requires natural gas to make and can turn into a potent greenhouse gas when it is spread on fields.

PepsiCo finally came up with a number: the equivalent of 3.75 pounds of carbon dioxide are emitted to the atmosphere for each half-gallon carton of orange juice. But the company is still debating how to use that information. Should it cite the number in its marketing, and would consumers have a clue what to make of it? PepsiCo’s experience is a harbinger of the complexities other companies may face as they come under pressure to calculate their emission of carbon dioxide, a number known as a carbon footprint, and eventually to lower it. “The main thing is helping us figure out where the carbon is in the chain,” said Neil Campbell, president of Tropicana North America, a division of PepsiCo. While acknowledging that protocols for measuring greenhouse emissions are far from perfect, Mr. Campbell said, “you can end up doing nothing if you let that stop you.”

PepsiCo, a manufacturer of soda, salty snacks and cereal based in Purchase, N.Y., is among a growing number of companies that hope to get ahead of potential government mandates and curb their energy use as prices and long-term supply grow less certain. They also want to promote supposedly low-carbon products to consumers anxious about rising global temperatures; such labeling has already appeared in Europe. The list of companies that have taken steps to reduce carbon emissions includes I.B.M., Nike, Coca-Cola and BP, the oil giant. Google, Yahoo and Dell are among the companies that have vowed to become “carbon neutral.” PepsiCo is among the first that will provide consumers with an absolute number for a product’s carbon footprint, which many expect to be a trend. The information will be posted on Tropicana’s Web site. The company has not yet decided if it will eventually put it on the package.

While carbon reduction efforts are generally welcomed by environmentalists, some complain that the marketing claims are backed by fuzzy numbers and dubious assumptions. Standards exist for determining a carbon footprint, but companies can apply them in different ways. They can decide how rigorous they want to be in counting emissions in the supply chain, and what data sources they should use in the process. “Any time people are making a legitimate effort to reduce emissions directly or indirectly with their product and services, most of us would think that is a good thing,” said Michael Gillenwater, dean of the Greenhouse Gas Management Institute, a nonprofit organization that teaches greenhouse gas management and accounting. “The trick is when you try to put a strict label that has implications for comparing your product to another product, or implying that you have no climate change impact,” he said.

Nancy Hirshberg, vice president for natural resources at the yogurt maker Stonyfield Farm, said measuring a carbon footprint is a “fabulous tool” for pinpointing areas to reduce emissions. For instance, her company was surprised to learn that milk production was a far bigger contributor to greenhouse gas emissions than its factory. But she said there were so many variables in determining a carbon footprint that an absolute number was meaningless as a marketing tool. “I’m thrilled that people are thinking about their carbon footprint, but to put a number on a package is misleading at best,” she said. PepsiCo’s interest in determining the carbon footprint of its products began in England, where carbon anxiety is further advanced than in the United States. In 2007, Walkers, a PepsiCo brand, published the carbon footprint of its potato chips on its Web site and on the package.

Mr. Campbell, who ran the Walkers brand, championed the idea when he came to Tropicana at the beginning of 2008. As was the case with Walkers, Tropicana hired an outside auditor, the Carbon Trust, to review its calculations and certify its footprint. The Carbon Trust was set up by the British government to accelerate progress toward a low-carbon economy. Making orange juice is relatively straightforward: the oranges are picked by hand, trucked to the plant, squeezed, pasteurized and packed into cartons and shipped by train to distribution points around the country. Early on, company officials roughed out the carbon footprint of Tropicana juice. But when the Carbon Trust came back with its own calculations, that initial estimate was off by more than 20 percent.

Growing the oranges accounted for a larger share — about a third — than PepsiCo had expected, almost entirely because of the production and application of fertilizer. Now, PepsiCo managers said they planned to work with their growers and with researchers at the University of Florida to find ways to grow oranges using less carbon. And they are starting to grapple with ways to teach the public how to interpret the carbon footprint of a product. PepsiCo is scheduled to announce its Tropicana results on Thursday, and will publish carbon-footprint numbers for products including Pepsi, Diet Pepsi and Gatorade. Said Bryan Lembke, a PepsiCo manager on the project: “If you don’t measure it, you can’t improve it.”

See also: The Carbon Trust

Sustainable supply chain (PepsiCo Int’l)

Nile run-off ‘boosts fish stocks’
January 20, 2009
BBC News

Fertilisers and sewage discharges entering the Nile delta have boosted fish stocks in Mediterranean coastal waters nearby, a study suggests.

A team of researchers found that the dramatic increase in fish populations coincided with a sharp rise in the amount of fertilisers used by farmers. At least 60% of the area’s fishery production is supported by the run-off entering the Nile’s water, they added. The findings appear in the Proceedings of the National Academy of Sciences. “More than 95% of Egypt’s population and all of its agriculture are concentrated in less than 5% of Egypt’s land, along the banks of the Nile and throughout the 25,000 sq km Nile delta,” the researchers wrote in their paper. “For more than 5,000 years, Egyptians depended on the annual flooding of the Nile, which irrigated and fertilised the floodplain and eventually discharged to the Mediterranean Sea.”

Flood control

As early as the 19th Century, the nation’s population began to exceed its resources, which led to discussions on whether to dam the Nile in order to control the flow of the great river. When the Aswan High Dam opened in the mid-1960s, the annual floods (caused by summer rains in East Africa) were reduced by about 90%. As well as being used to generate hydroelectricity, the dammed water was also used to irrigate three crops a year instead of just one. But interrupting the natural flow of the Nile was not without problems. Reduced flooding meant the arable land was not having its nutrients replenished, yet it was producing an extra two harvests each year.

It also led to a smaller volume of fertile floodwater entering the Mediterranean Sea, which in turn produced a sharp fall in the number of fish being landed by Egypt’s fishermen. “But in the late 1980s, the coastal fishery began to exhibit a surprising recovery,” the researchers observed. “Today, landings are more than three times the pre-dam level.” Although improvements in technology and a greater number of fishing boats could account for some improvement, the scientists said it could not account the all of the increases. “A recent assessment of potential anthropogenic nutrient sources in Egypt suggested that these sources may have more than replaced the fertility carried by the historical floodwaters.”

They added that since the completion of the Aswan High Dam, Egypt’s population had doubled, calorie intake and meat consumption and risen by more than a third, and the use of fertilisers had increased four-fold. “This is really a story about how people unintentionally impact ecosystems,” explained co-author Autumn Oczkowski from the University of Rhode Island Graduate School of Oceanography. “The Egyptians were fertilising the land, and then fertilising the sea with the run-off,” she said. “It also corresponded with a population boom and the expansion of the public water and sewer systems.”

Long-term uncertainty

The team of scientists collected more than 600 fish during 2006 and 2007 from four regions affected by the run-off and two regions that were not. Results showed the fish had consumed algae and plankton that in turn had flourished in waters rich in anthropogenic sources of nitrogen. This led to the researchers concluding that there was a correlation between an increase in fish stocks and the increase in nutrients from human activity entering the Nile delta. Ms Oczkowski acknowledged that the findings differed from the prevailing view that excess sewage or fertilisers entering bodies of water was detrimental to marine ecosystems.

“We’re programmed in the West to think of nutrient enrichment of coastal systems as bad,” she said. “It’s a major issue in the Chesapeake Bay and in the Gulf of Mexico where run-off of fertilisers… into the Mississippi River has caused a dead zone in the Gulf. But the Egyptians don’t think it’s a bad thing. For them, it’s producing tonnes of fish and feeding millions of hungry people.” However, she added: “It remains to be seen how sustainable these ‘artificial fisheries’ will be over the long-term. “Some preliminary evidence indicates that increasing nutrient loads may stimulate (fish) landings up to a point, beyond which the fisheries decline [as a result of] poor water quality or overfishing.”

See also: ‘Building acoustics’ (pieces at random)

Has Top Gear’s “Stig” been unmasked?
By Michael Holden
Reuters
January 20, 2009

LONDON – His identity has always been a closely guarded secret but now the media claim to have unmasked anonymous professional test car driver “The Stig” from the popular BBC motoring show “Top Gear.” Each episode of the cult show sees The Stig whizzing around tracks in powerful cars wearing a white jumpsuit with his features hidden by a white crash helmet. The original Stig was axed from the show after British racing car driver Perry McCarthy revealed his identity in an autobiography in 2002. Fans had speculated that his replacement could be a well-known figure such as former Formula One world champion Damon Hill. But according to media reports, Stig is in fact Ben Collins, who began his racing career in 1994 and drove at Formula 3 level. He also featured as a stuntman in the latest James Bond film “Quantum of Solace.”

His secret was apparently unveiled after he went to a photographic studio to commission a series of prints of The Stig in action. “We never comment on speculation as to whom or what The Stig is,” a BBC spokeswoman said. However one show insider allegedly told the Times newspaper the revelation was “bloody annoying” “You wouldn’t write a piece saying that Santa didn’t exist,” the insider went on to say. It is not the first time Collins’ name has been linked with the mystery driver. A Health and Safety report into a serious 2006 crash involving presenter Richard Hammond said Collins “worked closely with Top Gear as a high performance driver and consultant.” Despite test-driving some of the fastest and most expensive vehicles in the world for the TV show, media reports said he owned and drove a car worth a modest 15,000 pounds.

See also: BBC’s Top Gear

‘Top Gear Stig identity revealed’ (The Sun)

A County in China Sees Its Fortunes in Tea Leaves Until a Bubble Bursts
By Andrew Jacobs
January 17, 2009
New York Times

MENGHAI, China — Saudi Arabia has its oil. South Africa has its diamonds. And here in China’s temperate southwest, prosperity has come from the scrubby green tea trees that blanket the mountains of fabled Menghai County. Over the past decade, as the nation went wild for the region’s brand of tea, known as Pu’er, farmers bought minivans, manufacturers became millionaires and Chinese citizens plowed their savings into black bricks of compacted Pu’er. But that was before the collapse of the tea market turned thousands of farmers and dealers into paupers and provided the nation with a very pungent lesson about gullibility, greed and the perils of the speculative bubble. “Most of us are ruined,” said Fu Wei, 43, one of the few tea traders to survive the implosion of the Pu’er market. “A lot of people behaved like idiots.”

A pleasantly aromatic beverage that promoters claim reduces cholesterol and cures hangovers, Pu’er became the darling of the sipping classes in recent years as this nation’s nouveaux riches embraced a distinctly Chinese way to display their wealth, and invest their savings. From 1999 to 2007, the price of Pu’er, a fermented brew invented by Tang Dynasty traders, increased tenfold, to a high of $150 a pound for the finest aged Pu’er, before tumbling far below its preboom levels. For tens of thousands of wholesalers, farmers and other Chinese citizens who poured their money into compressed disks of tea leaves, the crash of the Pu’er market has been nothing short of disastrous. Many investors were led to believe that Pu’er prices could only go up.

“The saying around here was ‘It’s better to save Pu’er than to save money,’ ” said Wang Ruoyu, a longtime dealer in Xishuangbanna, the lush, tea-growing region of Yunnan Province that abuts the Burmese border. “Everyone thought they were going to get rich.” Fermented tea was hardly the only caffeinated investment frenzy that swept China during its boom years. The urban middle class speculated mainly in stock and real estate, pushing prices to stratospheric levels before exports slumped, growth slowed and hundreds of billions of dollars in paper profits disappeared over the past year. In the mountainous Pu’er belt of Yunnan, a cabal of manipulative buyers cornered the tea market and drove prices to record levels, giving some farmers and county traders a taste of the country’s bubble — and its bitter aftermath.

At least a third of the 3,000 tea manufacturers and merchants have called it quits in recent months. Farmers have begun replacing newly planted tea trees with more nourishing — and now, more lucrative — staples like corn and rice. Here in Menghai, the newly opened six-story emporium built to house hundreds of buyers and bundlers is a very lonely place. “Very few of us survived,” said Mr. Fu, 43, among the few tea traders brave enough to open a business in the complex, which is nearly empty. He sat in the concrete hull of his shop, which he cannot afford to complete, and cobwebs covered his shelf of treasured Pu’er cakes. All around him, sitting on unsold sacks of tea, were idled farmers and merchants who bided their time playing cards, chain smoking and, of course, drinking endless cups of tea.

The rise and fall of Pu’er partly reflects the lack of investment opportunities and government oversight in rural Yunnan, as well as the abundance of cash among connoisseurs in the big cities. Wu Xiduan, secretary general of the China Tea Marketing Association, said many naïve investors had been taken in by the frenzied atmosphere, largely whipped up by out-of-town wholesalers who promoted Pu’er as drinkable gold and then bought up as much as they could, sometimes paying up to 30 percent more than in the previous year. He said that as farmers planted more tea, production doubled from 2006 to 2007, to 100,000 tons. In the final free-for-all months, some producers shipped their tea to Yunnan from other provinces, labeled it Pu’er, and then enjoyed huge markups. When values hit absurd levels last spring, the buyers unloaded their stocks and disappeared. “The market was sensationalized on purpose,” Mr. Wu said, speaking in a telephone interview from Beijing.

With its near-mythic aura, Pu’er is well suited for hucksterism. A favorite of emperors and imbued with vague medicinal powers, Pu’er was supposedly invented by eighth-century horseback traders who compressed the tea leaves into cakes for easier transport. Unlike other types of tea, which are consumed not long after harvest, Pu’er tastes better with age. Prized vintages from the 19th century have sold for thousands of dollars a wedge. Over the past decade, the industry has been shaped in ways that mirror the Western fetishization of wine. Sellers charge a premium for batches picked from older plants or, even better, from “wild tea” trees that have survived the deforestation that scars much of the region. Enthusiasts talk about oxidation levels, loose-leaf versus compacted and whether the tea was harvested in the spring or the summer. (Spring tea, many believe, is more flavorful.)

But with no empirical way to establish a tea’s provenance, many buyers are easily duped. “If you study Pu’er your whole life, you still can’t recognize the differences in the teas,” said Mr. Wang, the tea buyer. “I tell people to just buy what tastes good and don’t worry about anything else.” Among those most bruised by the crash are the farmers of Menghai County. Many had never experienced the kind of prosperity common in China’s cities. Villagers built two-story brick homes, equipped them with televisions and refrigerators and sent their children to schools in the district capital. Flush with cash, scores of elderly residents made their first trips to Beijing. “Everyone was wearing designer labels,” said Zhelu, 22, a farmer who is a member of the region’s Hani minority and uses only one name. “A lot of people bought cars, but now we can’t afford gas so we just park them.”

Last week, dozens of vibrantly dressed women from Xinlu sat on the side of the highway hawking their excess tea. There were few takers. The going rate, about $3 a pound for medium-grade Pu’er, was less than a tenth of the peak price. The women said that during the boom years, tea traders from Guangdong Province would come to their village and buy up everyone’s harvest. But last year, they simply stopped showing up. Back at Menghai’s forlorn “tea city,” Chen Li was surrounded by what he said was $580,000 worth of product he bought before the crash. As he served an amber-hued seven-year-old variety, he described the manic days before Pu’er went bust. Out-of-towners packed hotels and restaurants. Local banks, besieged by customers, were forced to halve the maximum withdrawal limit.

“People had to stand in line for four or five hours to get the money from the bank, and you could often see people quarreling,” he said. “Even pedicab drivers were carrying tea samples and looking for clients on the street.” A trader who jumped into the business three years ago, Mr. Chen survives by offsetting his losses with profits from a restaurant his family owns in Alabama. He also happens to be one of the few optimists in town. Now that so many farmers have stopped picking tea, he is confident that prices will eventually rebound. As for the mounds of unsold tea that nearly enveloped him? “The best thing about Pu’er,” he said with a showman’s smile, “is that the longer you keep it, the more valuable it gets.”

See also: The Beginnings of Tea (UK Tea Council)

Delhi to outlaw plastic bags
Randeep Ramesh, Delhi
January 16, 2009
The Guardian

Customers and shopkeepers in India’s capital face jail sentence or stiff fine for using polythene bags

Carry a plastic bag in Delhi and you could be imprisoned for five years. Officials in India’s capital have decided that the only way to stem the rising tide of poly­thene is to outlaw the plastic shopping bag. According to the official note, the “use, storage and sale” of plastic bags of any kind or thickness will be banned. The new guideline means that customers, shopkeepers, hoteliers and hospital staff face a 100,000 rupee fine (£1,370) and a possible jail sentence for using non-biodegradable bags.Delhi has been quietly filling up with plastic bags in recent years as the economy boomed and western-style shopping malls sprang up in the city. There are no reliable figures for bag use but environmentalists say more than 10m a day are used in the capital every day. Not only are the streets littered with them, but polythene takes hundreds of years to decompose and creates demand for oil, which is used to make plastics. At first the ban will be lightly implemented, giving people time to switch to jute, cotton, recycled-paper and compostable bags.

Newspapers in India quoted city officials as saying that the authorities did not “want people to be harassed and no prosecution will take place immediately; [once they] understand that by using plastic bags they will be in contempt of court, they will start using other material”. The first targets in Delhi will be the industrial units that manufacture the plastic bags in the capital, which officials say will be closed down.Civil servants said that punitive measures were needed after a law prohibiting all but the thinnest plastic bags – no thicker than 0.04mm – was ignored. Although the government had originally concluded that plastic bags were too cheap and convenient to be disposed of, the authorities appear to have been swayed by environmentalists who pointed out that used bags were clogging drains and so providing breeding grounds for malaria and dengue fever. There is evidence that prohibition of plastic bags can work. Countries such as Rwanda, Bhutan and Bangladesh have all had bans enforced.

See also: ‘After ban, traders want cheap option’ (The Times of India)

Wine as an Economic Indicator
By Catherine Rampell
January 2, 2009
Economix, NYTimes

Earlier this week I wrote about how consumers appear to be buying less expensive, but more, alcohol. Retailers say their customers have been trading down to less-expensive brands of wine — but buying more bottles total, leading to approximately the same average purchase size at many stores. Why are they buying more bottles at these outlets? Perhaps they’re drinking away their troubles; perhaps they’re dining in more frequently, and trying to replicate the restaurant experience by uncorking at home; and perhaps they just feel guilty about buying a flashy, expensive alcohol brand during a recession, so they spend the same amount of cash on two less flashy bottles. In any case, the moral of the story is that the recession is forcing middle-market consumers to move down-market.

What has become of the high-end oenophiles, though? Surely they’ve been affected by the downturn. Liv-ex, a fine wine exchange, seems to have the answer. Merchants and collectors trade bottles of expensive wines — the kinds that wait in cellars for years or decades, not in the fridge for a few nights — on this London-based market. According to James Miles, the director of Liv-ex, prices have fallen 20 percent in sterling (and 40 percent in dollars, given fluctuating currency exchange rates) since September. But in terms of volume, he said, almost twice as many bottles were traded on Liv-ex in December 2008 as in December 2007. Why? Some wealthier traders might have been hit hard by the economic downturn and are now in need of cash, so they have been selling these luxury goods en masse.

More sellers leads to lower prices, and buyers in developing markets are picking up the bargains, Mr. Miles said. Mr. Miles argues that the Liv-ex 100 Fine Wine Index is a good proxy for how well the world’s wealthiest are doing. “The best correlation I’ve found seems to be with the Forbes billionaire list,” he says. “The index is up when there are more billionaires on the list.” Given current fine wine prices — among other indicators, of course — it seems the billionaire list may be getting a trim this year.

See also: Liv-ex

Social networking sites enter Gaza conflict
January 2, 2009
The Independent

Israel’s bruising war on the Islamic militants who control Gaza has moved online, where sites like YouTube and Facebook are the new battlegrounds.

In one of the fiercest skirmishes, sides are trading fire over the Israeli military’s use of YouTube to explain its campaign against Gaza militants, saying they have terrorised southern Israel with deadly rocket fire. Supporters of Gaza’s Hamas rulers have posted images of the devastating Israeli offensive on both popular websites and on blogs, uploading images of the carnage and suffering in the tiny seaside territory. The militants themselves regularly update their websites in Arabic and English. In addition, they broadcast images of masked, uniformed fighters on Hamas TV, which was bombed by Israeli warplanes but continues to broadcast from a mobile unit. Taking its campaign to the virtual world, the military spokesman’s office has opened a YouTube channel containing footage it says was taken during the 5-day-old Israeli assault against Gaza’s militant Hamas rulers.

One of the aerial surveillance videos shows about a dozen figures the military says are militants loading rockets onto a truck. The men are eventually targeted by an air-launched missile and disappear into a white cloud as the truck explodes. “The blogosphere and the new media are basically a war zone” in a battle for world opinion, military spokesman Major Avital Leibovich said yesterday. The YouTube channel – and a new blog the military is launching – are an important part of Israel’s attempt to explain its actions abroad, she said. In modern-day warfare, some battles are conducted through the media, says Gideon Doron, former chairman of the government agency that oversaw the privatisation of television and radio services in Israel. “Many of the victories of modern warfare are mediated by the media,” Doron said. “We have internet and all kinds of modern communication, and the Israeli military apparently decided that it has to broadcast its message through these tools.”

But just as people have taken sides in the actual fight, so, too, have they taken sides for and against the clips themselves. YouTube briefly yanked the clip on Tuesday, saying it was inappropriate, only to restore it a few hours later, labelling it inappropriate for minors, the military said. “We were saddened on Dec. 30, 2008 when YouTube took down some of our exclusive footage,” the military wrote on its YouTube channel page. “Fortunately, due to blogger and viewer support, YouTube has returned the footage they removed.” YouTube did not immediately reply to an email requesting comment. In the past, YouTube, which is owned by Google Inc., has been pressed to take down videos depicting violence. The site has no automatic review process, so anything posted runs until a viewer flags it and asks that it be taken down.

In May, Senator Joseph Lieberman complained that the process was flawed because al-Qaida recruitment videos could still be seen on the site. The military says its clips have attracted more than 230,000 hits since going online on Monday. Israel launched the air assault on Saturday in an effort to curb the rocket barrages launched from Gaza at Israeli towns. Hundreds of airstrikes across the Palestinian territory have caused huge damage and Gaza officials say more than 390 Palestinians have been killed, including dozens of civilians. Militant rockets have reached farther into Israel than ever before, killing three Israeli civilians and a soldier.

See also: ‘Middle East crisis’ (BBC News)

Matter of life and death: Wallace and Gromit makers get animated over UK obesity crisis
By Sarah Boseley, health editor
January 2, 2009
The Guardian

They topped the Christmas ratings with Wallace and Gromit’s bakery adventure, A Matter of Loaf and Death, but Aardman Animations’ latest challenge is their most daunting yet. A cartoon advert by the award-winning firm will be the centrepiece of a £75m government marketing campaign intended to make the public aware of the fatal link between expanding waistlines and life-shortening disease. The ambitious Change4Life strategy will also feature a rebranding of the London marathon and will embrace supermarkets and food producers such as Pepsico as well as voluntary groups and fitness clubs in an attempt to curb what ministers regard as a national crisis. The campaign is aimed at reducing the 9,000 premature deaths a year attributed to obesity. The government claims it will work because it believes public information campaigns were central to people stopping smoking. The crisis will cost £50bn by 2050 – half the annual NHS budget – if the current trend continues.

The TV adverts, the first of which goes out tomorrow, will tell the story of primitive man’s descent into flab, depicting colourful characters swinging clubs and climbing fruit trees in the Stone Age before they succumb to a more sedentary modern lifestyle. They highlight the dangers of fat in children’s bodies in graphic form, linking fat to disease and early death, and urge parents to make their sons and daughters more active. As part of the campaign, the London Marathon’s sponsor, Unilever, will promote Change4Life alongside the Flora margarine logo. The public health minister, Dawn Primarolo, said: “This is a long-running and concerted effort to change behaviour and it is not going to happen overnight.” The government says there is an urgent need to reach many families who do not realise that their lifestyle and diet are putting their children’s health at risk.

“The research we undertook for this campaign showed that only 6% of people understood the links between obesity, overweight and adverse health effects,” said chief medical officer, Sir Liam Donaldson. “Yet we know that without any intervention, 90% of children will be overweight by 2050 and at risk from coronary heart disease and diabetes.” The latest data from the national measuring scheme has shown that one in four children are overweight when they arrive at primary school and one in three by the time they leave. Obesity reduces life expectancy by nine years. People who are severely obese may die 11 years earlier than their counterparts. Yet the campaign, which will cost £8.7m in the first three months and £75m over three years, has taken a long time to come to fruition. Critics have accused the government of taking its time in deciding its response to the fast-growing epidemic. It commissioned the Foresight report into the causes of the problem and possible ways forward, but that was published in October 2007 – and at the same time the government postponed its target date for halving childhood obesity from 2010 to 2020.

Social marketing – using all the persuasive weapons in the armoury from advertising to promotions on healthy food in supermarkets and incentives to get involved in exercise – will work, health officials say, because it succeeded in making people realise the health dangers of smoking cigarettes. “With obesity we are probably back in the 1950s as far as public understanding is concerned,” said Donaldson. “Many people see fat as a vanity issue, not a health issue.” The involvement of food corporations, like Pepsico and Kelloggs, and supermarkets, criticised in many quarters as part of the problem, is controversial. But Donaldson said it would act as a restraint on the development and marketing of less healthy foods. “I think if a company like Pepsico and some others get involved in this, they are going to be subject to intense scrutiny by committing to a healthy cause. It is a very good way of keeping them under pressure to make their products healthier,” he said. Obesity policy consultant Neville Rigby said the willingness of companies to become involved was laudable “if they also agree to make significant changes in the ways they market foods and the kinds of food they make”.

See also: ‘Food firms sponsor anti-fat drive’ (Independent)