What Will Not Change

If you feel a bit overwhelmed, you’re not alone. A lot is happening right now. The US has a big election next week. We’re all on edge about the pandemic, which appears to be getting worse again, not just in the US but in most of the world. Germany and France are closing some businesses again and restrictions are rising in the US, too. This is hitting markets as investors see recovery sliding farther into the future.

All that is important, and I’m sure next week we will talk about whatever happens in the election. But today I want to look at what will not change. And though I will make a few comments on the election below, I want us to think today about what we can look forward to with an optimistic and realistic vision.

We can do this because something hasn’t stopped: human innovation. I keep saying that the business owners hurt by this pandemic will be back. People with the talent and drive to launch new enterprises won’t stop doing so, just like dogs keep barking. It’s just what they do.

But it goes beyond business owners. Human nature drives us to break through the barriers standing between us and our deepest desires. Faced with problems, we find solutions. And faced with new problems, we find new solutions. This process never stops. It is at work even now, sometimes visibly but more often in a million small ways that add up.

What do they add up to? Progress. And we can always make more because progress is an inexhaustible resource. Knowledge, as George Gilder says, is the ultimate currency which can never be destroyed. It can be used over and over again without ever depleting its supply.


Traveling Ideas

If you want to understand how innovation works, you should read Matt Ridley’s newest book, coincidentally titled How Innovation Works. Matt spoke at my Virtual Strategic Investment Conference this year (attendees can still view the transcript and slides, by the way) to rave reviews from all. No one explains better how innovation helps humanity move forward.

As Matt explains, innovation usually doesn’t come from the solitary inventor screaming “Eureka! I found it!” It’s both simpler and more complex than that. Simpler because no one person really guides it, and more complex because more people are involved who often don’t even know each other. At SIC, Matt told the story of a wheat variety that was key to reducing global hunger.

It's quite important, I think, to understand how people collaborate. So Norman Borlaug gets the credit for the short-strawed wheat that launched the Green Revolution in India and Pakistan, basically banishing famine from the world in the 1960s. But Borlaug got the idea from a man named Burton Bayles, who he met at a conference in Buenos Aires who told him about dwarf wheats. Bayles had got the idea from Orville Vogel in Oregon. Vogel had got the idea from Cecil Salmon, who was on Douglas MacArthur's staff in Tokyo at the end of the Second World War, and he got the idea from Gonjiro Inuzuka who had at an experimental station in Japan, bred these short wheats that grew much more vigorously and produced much higher yields. And then Borlaug passed the idea on to M.S. Swaminathan in India, who championed the development of these varieties. So it's very important, I think, to understand that innovation is a team sport, not an individual process.

I bring this up because, back then, famine was a bit like our pandemic problem. It was costing lives and harming economies. No one thought it was good that people starved, but the problem seemed unsolvable. Governments did what they could, sometimes helping and sometimes making it worse. People thought we would just have to live with it.


Source: Matt Ridley

But the solution was right there all along. The idea traveled through a series of minds that eventually brought it to the place it was needed. This is often how innovation works.

In fact, Ridley’s book and history are replete with innovations occurring almost simultaneously across the world. Most famously, Alexander Graham Bell filed his patent for the telephone 30 minutes before his competitor. The great advances in math came from all over and almost simultaneously, even though we generally attribute them to a single mathematician.

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William K. 3 weeks ago Member's comment

Certainly change is coming, and some change is already here. And my assertion is that AT BEST, only half of all of the changes are improvements. Quite a few changes make things worse for more people than they benefit. Not just here in the USA, but all over the world.

Electric vehicles will be an interesting change, but where will the electricity to recharge them come from? On car on the block might be able to recharge over night, but what happens when everybody has one?

Computer driven cars will be a non-starter because the code will never be good enough. Consider that MOST people never have an accident, especially an injury accident. How can adding $19,000 to the price of every car improve on that???. And aside from the price of making the software safe, consider the large revisions to the infrastructure needed to allow the computer driven cars to even stay on the roadway. One more concern is the weekly code updates that some are proposing, and how to make them secure. Who would want a car that had safety recalls on a weekly basis??? Certainly not me.

Finally, we have the changes caused by our federal bank. who are planting the seeds of inflation, and heaping up huge mountains of debt. That will result in a rather nasty change when the debt must be repaid. Or possibly the loss of a whole lot of freedom and the payment for that debt.

That is not the light at the end of the tunnel that we see, it is a fast-freight, headed our way.

Danny Straus 2 weeks ago Member's comment

There are a lot of innovations coming for electric cars. Like solar panels for the roof/hood of the vehicle so it can charge when driving or parked outside. I've also read, I believe in Israel, about a road being built where the cards will actually get charged simply by driving on the road.