Inflation Doughnut Economics and iPhones

Inflation, Doughnut Economics and iPhones: In a world where everywhere you turn there’s inflation, how do we save money? And what do the new Apple iPhones have to do with these larger economic, social, and political trends? What about implications for your own tech and digital security?

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It seems like everywhere you look prices are going up. We are seeing this in technology as well. Monthly fees for line-of-business software rise. In our hobbies it shows like the recent rate hike announcement from Sony for Playstation Network subscriptions.

For the last year we’ve seen lots of massive layoffs in the tech industry. The social media company and platform formerly known as Twitter has slashed 70% of its workforce. All this happened since changing ownership about a year ago! In my gardening hobby I’ve learned the value of carefully pruning plants to yield better fruits. But there’s a major difference in pruning and the business mantra “cut your way to growth.” Especially when the latter is more of a hatchet job or dismemberment plan.

The sane and empathic response requires our hearts to break. But instead the calculating optimization algorithms driving the economy are in charge of these decisions.

Is Capitalism the Problem? What about Communism?

Let’s start this weighty discussion with some humor from the 1980’s with comedian Yakov Smirnoff:

Smirnoff jokes about “In Soviet Russia…” as one of his trademark standup routines. For example: “In America, your job determines your marks. In Soviet Russia, Marx determine your job!”

Before we segue into the more serious part of this post we want to remind you we are aware of who we are, where we are, and why we are. We acknowledge you are in a different place and anything we discuss has nuance and value for you. You are welcomed to disagree based on your personal beliefs or values. That’s okay. You have worth regardless of whether we agree or disagree. We also recognize that the US is a republican democracy with recent leanings towards authoritarianism. Our economy is a mixed economy that trends towards being more free market capitalist in most instances.

It’s the Stupid Economy

Moving right to the big idea: something’s wrong with our economy. I think that’s a rather uncontroversial empirically observable truth. It may be objectionable to those who are currently wealthy enough to benefit from the status quo. But even those of you in that group must see the writing on the wall. If the economy doesn’t work for most of the people in it, it becomes volatile.

The prices of goods and services are rising. The stock market volatility harms your retirement options. Many people experience wage stagnation. Maybe you cannot afford child care. Or medical expenses leave you in debt. The economy is certainly struggling. In the entrepreneurial spirit, these pain points can also be opportunities. We will acknowledge too that this economy itself is doing well by the current metrics. Notice inflation has largely been under control from its peak in the summer of 2022.

How can it possibly be true that the economy is doing well and inflation is down, but I’m still paying more at the gas pump?

Smirnoff’s jokes are referenced because we are thinking that both capitalism and communism are out dated and poorly serve humanity’s needs today.

Regardless, we remain very hopeful and optimistic about our shared human future. We can make changes and better serve people today while succeeding in business. Does that sound good to you too? Then let’s get started!

Doughnut Economics

Kate Raworth quips in her book Doughnut Economics: “These citizens of 2050 are being taught an economic mindset that is rooted in the textbooks of 1950, which in turn are rooted in the theories of of 1850.”

There’s a lot to this new economic theory, but we’ll summarize and link you to the author herself explaining it in less than 8 minutes.

Doughnut Economics

Doughnut Economics comes from the above diagram that is a literal game changer. It invites us to think about the economy and our relationship to it differently in these ways:

  1. Change the goal – from GDP to the Doughnut (above)
  2. See the big picture – instead of self-contained markets we have embedded markets in a larger whole
  3. Nurture human nature – from rational economic man to social adaptable humans
  4. Get savvy with systems – from mechanical equilibrium to dynamic complexity
  5. Design to distribute from growth will even the playing field to distributive by design
  6. Create to regenerate – from growth will clean it up to regenerative by design
  7. Be agnostic about growth – from growth addicted to growth agnostic

There are no externalities as Herman Daly would say, your model is just not big enough.

Inflation Doughnut Economics and New iPhones

Okay, what does any of this talk of inflation and doughnut economics have to do with iPhones? Surprisingly quite a bit.

Earlier this week Apple announced the latest iPhone models in the 15 series.

iPhone 15 New features

There are a number of cool new features on the latest iPhones. They have better cameras, dynamic island on all new iPhones, and our personal favorite a USB-C charging port.

We’ve been following the news that lead to the USB-C port for a while now from the European Union. Cheers mates! This is welcomed news for everyone! Now there’s no more “hey do you have a charger I can use?” Only to get let down with a response like, “oh, sorry I don’t have an iPhone.”

It also means less tech waste or trash. And while we’re on that note there’s an important thing to say about your old phone, actually several. No matter if you’re getting the shiny new titanium iPhone Pro you’ll still want to hear how you can turn your trash into treasure.

End of Lifecycle Tips

All good things in life must come to an end at some point. So for a smartphone, a wise person will evaluate the full lifecycle of the phone.

Pricing has a lot of catches to look out. Some of us joke about the “Apple tax” because they charge more for their products than competitors. They also tend to provide better long term value.

Here’s my personal example: I have an iPhone Xr I purchased 5 years ago. There’s a slight bit of battery degradation due to normal use. Otherwise it’s in good condition.

It was $800 when I purchased it. So simple math says that $800/5 years = $160 per year.

While it’s hard to do a direct comparison with Android. There’s a lot of options and variables so we’ll compare to Google’s Pixel 3 from 2018. Google does featured support for 3 years, which is also better than other Android device makers.

At the same price of $800/3 years = $267 per year. Expect worse with Android makers that don’t support their devices as well as Google does.

There’s a very similar prospect with Windows PC’s (especially laptops) compared to Apple MacBooks which last much longer on average.

Trade-in Tips

Here’s where your proverbial trash becomes treasure, but there’s a few warnings to be aware.

You’ve likely also seen those cellular company commercials with antiques roadshow themes talking about trading in your old device. This is generally a good idea if you do not plan to use them anymore. If you want to sell them to another person online like on craigslist or ebay, that’s a good option to get more money.

Tech trash is a big problem in our industry. One way we can help make a better 21st century is thinking like a Doughnut Economist. My grandparents grew up during the Great Depression which ingrained the idea wear it out, use it up, or do without. But they also became low-key hoarders due to their lack of having stuff in formative years.

We can combine the good of the Depression Era wisdom with our modern needs and sensibilities for a better perspective. We should first recognize our needs and values better. Then look at the bigger picture to move towards sustainable and ultimately regenerative practices in our economy. So certainly use up your resources if you can’t find some that are regenerative. But while you are doing it ask yourself if you can make them last longer. You might be surprised by your own ingenuity!

Smartphone Trade-in Considerations

What to look for in your trade-in deal:

  • What year/model current phone do you have?
  • Do you plan on using it for anything after you get a new one?
  • Do you think anyone else might want to use it? (Check sites like eBay to see what people are paying for it)
  • What condition is your phone in? Scratches, blemishes and broken parts will decrease the trade-in value. Consider getting a new phone you can hold easily without dropping, maybe invest in a case or screen protector?
  • What cellular service company do you use? Are you happy with them? Many times you’ll need to be in a contract with them for a while to get the deal.
  • Where does the trade-in valuation take place? Many deals offer you the convenience of mailing in your old device after getting a new one. But this means you have to trust them fully to value it accurately. Find a trade-in offer in person that way it should be readily apparent to everyone why your phone got devalued.

My estimate is $350 credit with a 3 years plan. This brings a new iPhone 15’s price down from $800 to $450. Then if you average that over the next 5 years you get $90 per year. That’s looking really affordable. Like most adults I use my smartphone for lots of things from running my business to planning my social life.

Save Money and Improve Your Product Lifecycles

At large companies, there are often people who specialize in parts of the supply chain. But as individuals and small businesses the thought might be new. Give yourself some time to mull it over. You will find lots of great new ways to save money, improve value, and eliminate waste.

Do you have a drawer of old technology you don’t know what to do with?

Does your company have a supply closet overflowing with technology?

Do you use out of date technology that connects online but lacks crucial security updates?

Would you like to get more out of your technology investments?

Safely repurposing, recycling or disposing technology equipment and data is also important to your security posture. Make sure that you are not literally dumping a device with access to your bank account. A hacker could find it and have access to your treasure in bank accounts just by combing through your trash!

Be creative; you’ll find lots of ways to get more out of your technology or reuse it. But if you need help anywhere along the way, we’re happy to advise you. You can surprise us, but you won’t stump us. Contact us to see how we can improve your tech lifecycle!

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