The Fabulous $10 Indian Government Laptop

“Everything reminds Milton of the money supply. Well, everything reminds me of sex, but I keep it out of the paper,” wrote Nobel prize-winning economist Robert Solow in 1966 about Milton Friedman, another Nobel laureate economist, the father of monetarism. 🙂

Everything reminds me of India’s failed education system — and by extension — the stupidity of the government policymakers, bureaucrats and politicians included. Unlike Bob Solow, however, I cannot keep it out of my posts.

Consider the news item that India is developing a $10 laptop.

NEW DELHI: After displaying its prowess in developing the world’s cheapest car, India is on track to roll out the world’s cheapest laptop computer that could cost as low as $10, a top official said.

Minister of State for Human Resource Development D Purandeswari said research was being conducted to develop the laptop, especially for use by students, which will cost all of $10.

“Research in this direction is being already carried out at the Indian Institute of Science, Bangalore and the Indian Institute of Technology (IIT), Madras,” she told the e-India annual summit on information and communication technologies.

I wonder how anyone can sit and listen to such unadulterated crap — even if they are participants at an “e-India” summit. And the reporter — doesn’t one have to have the IQ of a cretin to report this without comment about the absurdity of the claim that there can be such a thing as a $10 laptop?

Like I keep saying, the Indian education system is really, truly, badly, irreparably broken. What else can one conclude from the expressed stupidity of a minister of state, a whole bunch of presumably educated people at a conference, a newspaper reporter and various editors, and hundreds of thousands of readers who let the stupidity go unquestioned?

So in the interests of sanity and public service, I will explain why the minister’s claim is idiotic. There is such a thing called the cost of making something. The price at which something is sold has a relationship to the cost of manufacture in the sense that the price is at least as much as the total cost of manufacturing (absent any subsidies.)

Now there is a general rule about the cost of a thing which should be known by every adult who is not, how shall I put it, mentally challenged. The heavier the thing, the more it costs to make. Simple but not fully appreciated by those who are mentally deficient. This is a general rule. A Volvo bus costs more to make than a Volvo car. A motorbike costs more to make than a bicycle. More weight, more costly: Tata Nano, Maurti 800, Honda Civic, Honda Accord, BMW 7series.

Basically, the floor of the minimum cost is dictated by the per kilo cost of the material that the thing is made of.

So what is the minimum cost of a car? Well, if 500 kilos of steel, plastics, and other stuff go into it, and if the minimum per kilo cost is say Rs 100, then you cannot produce a car for less than Rs 50,000. That a 500 kg car can cost a lot more than the minimum to make, or that it can be sold at a price that is multiple times more than its cost, is besides the point. What we are doing here is figuring out that there is a lower limit to the cost of anything.

Now suppose a laptop weighs 3 kilos. If anyone claims that it can be produced at a cost of say $10 (or Rs 400), then the claim is that the material costs are just over $3 a kilo. That is patently absurd. In fact, the more sophisticated a device is, its per kilo price goes up, not down. Its capacity may go up but the basic per kilo price does not go down but up.

What this means is that a one-kilo laptop with the same functionality and features as that of a three-kilo laptop will cost more. That means that per kilo, the lighter laptop will at least three times as costly as the heavier laptop.

So here’s the bottom line. An affordable laptop will be heavier than sophisticated but lighter laptop. And the heavier laptop cannot cost less than the per kilo production cost of the stuff that it is made up of. A laptop at $10 is an impossibility in any known reality. Sure you could have a $10 cell phone — you could have a 100 gram phone. But you cannot have a 100 gram laptop.

Back to our Minister of State and her pronouncements. I don’t suppose anyone will ever hold her to her statement. No one will call bullshit on her claims. And I suppose her IQ is matched by that of the media. So she need not worry that the media are going to challenger her.

Like I said, our educational system sucks.