Has the Magic of Technology Ebbed?

Marketing guru Seth Godin thinks so. He writes, (bold emphasis mine)

Arthur C. Clarke told us, “Any sufficiently advanced technology is indistinguishable from magic.”

Head back to the 1800s with a Taser or a Prius or an iPad and the townsfolk will no doubt either burn you at the stake or worship you.

So many doors have been opened by technology in the last twenty years that the word “sufficiently” is being stretched. If it happens on a screen (Google automatically guessing what I want next, a social network knowing who my friends are before I tell them) we just assume it’s technology at work. Hard to even imagine magic here.

I remember eagerly opening my copy of Wired every month (fifteen years ago). On every page there was something new and sparkly and yes, magical.

No doubt that there will be magic again one day... magic of biotech, say, or quantum string theory, whatever that is. But one reason for our ennui as technology hounds is that we’re missing the feeling that was delivered to us daily for a decade or more. It’s not that there’s no new technology to come (there is, certainly). It’s that many of us can already imagine it.

The current generation, whom have been key beneficiaries of the transformative technological innovations, may seem to be less appreciative of the contributions of technology to our current welfare. That’s because technology has been giving us constantly more for less.

Thus, the diminishing returns on expectations from the impact of technological progress: the perceived loss of magical touch.

But I think it goes more than that.

Perhaps most people may be a lot less familiar with the antecedent of today’s state of technology. Or, people may have forgotten the roots of today’s progress: our ancestors compounded efforts or actions.

As the great Ludwig von Mises once wrote, (bold highlights mine)

Nobody denies that technological progress is a gradual process, a chain of successive steps performed by long lines of men each of whom adds something to the accomplishments of his predecessors. The history of every technological contrivance, when completely told, leads back to the most primitive inventions made by cave dwellers in the earliest ages of mankind. To choose any later starting point is an arbitrary restriction of the whole tale. One may begin a history of wireless telegraphy with Maxwell and Hertz, but one may as well go back to the first experiments with electricity or to any previous technological feats that had necessarily to precede the construction of a radio network. All this does not in the least affect the truth that each step forward was made by an individual and not by some mythical impersonal agency.

When people forget about history; the contribution of a multitude of individuals in today’s progress through the years, then they became less appreciative of the blessings that has been happening.

Many people today seem to think that the progress from technology is just a given. It is not.

For as long as people are allowed to trade, trade will then function as the main driver of technological progress.

Writers like me will try to keep that magic alive.

Self Development: Success= Compound Efforts + Fire In the Belly

Earlier I posted here a great article by Agora Publishing’s Bill Bonner on how to use ‘efforts’ similar to interest rates: by compounding—the length and quality of exposure determines expertise or specialization or productivity.

Austrian Economist Professor Gary North expands the discussion, see link here.

But this time Professor North’s article comes with an additional tip: Fire in the Belly or PASSION (calling).

The reason I am posting topics related to self-development is to help newbies readers like my children. [I noticed that many readers of this blog are from schools, which I presume could mostly be students]

The lessons here applies to almost anything most especially to investment.

The following are excerpts from Prof. North’s wonderful article supplemented by my headings (blue bold emphasis mine)

1. Compound efforts needs FUTURE orientation

It is not a matter of brains. It is a matter of character. From time to time, we do hear of young men who seem to understand as teenagers how little time men have, and how large the payoff is for hard work, high thrift, and dedication to the mastery of some field. These are the super-performers discussed in books like Malcolm Gladwell's Outliers. They invest their crucial 10,000 hours before they reach age 21.

But it is not just character. It is something else. It is their understanding of time. They recognize that effort and assets invested early in life have a compounding effect. This makes an enormous difference at age 40 or 50, if a person finds the right niche in which to invest his time.

To do this, a young person needs future-orientation. This is exceedingly rare among the young. As Ben Franklin put it in 1750, "A child thinks that twenty pounds and twenty years can never be spent." A few musical artists figure it out early, or at least consent to their parents' demands while they are still forming their habits in life. But few understand it with respect to money.

2 Capital accumulation or wealth is a PROCESS

In Chapter XVIII of his magnum opus, Human Action (1949), Ludwig von Mises presented the case for the importance of time perspective as a source of thrift, capital formation, and wealth. He called this outlook "time-preference." Some people are present-oriented. They want satisfaction now. They will not lend money at low rates of interest. They borrow at high rates. Others are future-oriented. They save at low rates of interest. They refuse to pay high rates of interest when borrowing.

He made a profound observation on why we are rich compared to earlier generations.

Our activities are designed for a longer period of provision because we are the lucky heirs of a past which has lengthened, step by step, the period of provision and has bequeathed to us the means to expand the waiting period.

Mises recognized that modern man is the heir of generations of capital formation and thrift.

3. Future Orientation MUST come with PASSION

FIRE IN THE BELLY

There are good employees who meet the criteria of predictable performance. But they will remain employees if they do not have fire in the belly.

Some people call this character trait an obsession. It probably is. Others call it ambition. It often is. Still others call it visionary. It always is…

The person with no fire in his belly is unlikely to take the risks that mastery require. Mastery is a high-risk endeavor. It is more than routine maintenance. It is a matter of putting your reputation on the line in something like full public view.

Rockefeller and Carnegie had fire in the belly. They helped to create a new, far richer world. Both of them switched to charitable giving when they got old. Their money bankrolled some of the most insidious projects of the so-called New World Order. They were better at piling up wealth than giving it away. They had no skills at giving it away. They would have done more good for mankind in their lifetimes if they had stuck to their knitting. But super-rich men cannot escape their responsibility for managing great wealth in this way. Their piled-up capital will be inherited....

I think a person must have this fire in the belly: his calling. I define calling as the most important thing you can do in which you would be most difficult to replace. This may be a person's occupation, but only rarely. It was an aspect of John Wooden's job, but it reached far deeper than his job. After he retired, his calling remained. His influence grew greater over the years as a result of the foundation of his life, which was also the foundation of his occupational success...

Fire in the belly keeps a person from getting sidetracked. He may go over a cliff.

That’s why applied to the stock markets, I vehemently oppose simulation games (because this lacks the element of the stakeholder’s problem) or short term trades (yes even taught by schools!!!).

This is because any person who is dominated by present orientation extrapolates to a lack of depth in analysis or thinking, in trading—limits to gains while enlarging risks (with emphasis on the frequency more than the magnitude), amplifies emotional approach to the markets, and renders one vulnerable to social conformity rather than rigorous independent thinking which is a prerequisite to getting ahead of the curve.

I hope this helps.

Self Development: Compounding Efforts as Way to Success

Agora Publishing's Bill Bonner has this outstanding article about “compound efforts over time”.

It’s basically about balancing one’s efforts using the principle of compound interest.

Here is Mr. Bonner. (bold highlights mine)

Malcolm Gladwell's book, Outliers, makes the point that there is no secret to success. Successful people just put in more hours than other people. Our point today is similar. Success is usually the product of compound effort over time. It takes time to develop contacts. It takes time to develop trust - both of your own team and outside clients/customers/associates. It takes time and experience to develop the hunches and instincts that are useful in real life. It takes time too to understand other people and learn how to work with them. It also takes time to build a foundation of human and financial capital that allows you to take advantage of the insights and opportunities that experience bring you.

Time does not work in a linear, mathematical way. As with compound interest, time pays off geometrically. As contacts, experiences, wisdom, innovations and intuition are added one to another, your opportunities multiply. A $100,000 deal that you might have done when you were 25 grows into a $1 million deal 5 years later. And instead of doing two deals a year...you might do 10 a year.

This is also why it is so important to put in lots of time. Gladwell refers to the Beatles, major league athletes and people such as Bill Gates. In every case, he found that the leading figures in their industries put in thousands of hours - usually far more than their competitors. They may appear to be 'gifted.' Their achievements may seem effortless. But they are almost always the product of time.

Not only that, but the time spent at the end is much more powerful than the time at the beginning. You can see this by looking at charts of compound interest. Starting from a low base, the first series of compound interest produce little difference. But at the end, the results are spectacular.

Start with a penny. Double it every day. At the end of a week you are still only adding 32 cents per day. By the end of the third week, however, you're adding more than $10,000 per day. So you see, the last increments of time are much more important than the first.

It doesn't exactly work that way in real life, of course. Hang around too long and you get tired...and the lessons you've learned might not be applicable to the new realities. Suppose, for example, that you had learned to make the perfect buggy whip, at age 55, in 1910! Or imagine that you were the leading expert on silent movies...just before the 'talkies' started. Or maybe you were cornering the classified advertising market...just as Craigslist and eBay made their appearance.

But aside from that kind of a setback, time compounds your advantages. At age 20, you may know less than everyone in your business. But then, you work 10 hours a day, while others only work 8 hours. In 20 years, you may know more than just about anyone. Then, who gets the new contracts? Who finds the new opportunities? Who has pricing power?

Who makes money?

Compound interest works because each addition is then put in service to earn another increment of gain. Compound effort works the same way. Every insight, innovation and useful contact helps bring on another, bigger and better one.

Remember, success is competitive. While you are adding to your business capital, your competitors tend to wear out...move on...or retire. Sticking to it is not easy. People tend to get distracted. They often want easier, simpler, faster opportunities. They give up their accumulated capital...and take up something new. That leaves you in a commanding position.

Stick to it.

Marketing guru Seth Godin shares the same thoughts (bold highlights mine)

Not everything you do actually gets a response. In fact, most of it doesn't. But each effort is a tiny brick in the wall of perception, even when it appears to be dumb and even senseless.

And as Albert Einstein once said, “The most powerful force in the universe is compound interest”. As shown above the concept of compound interest is not only about wealth generation but likewise applies to attaining excellence.

I found Mr. Bonner’s article so compelling that I sent them to my children. I hope that they don’t just read it but internalize or apply it.