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Why has human progress ground to a halt? – Michael Hanlon, Aeon

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"That true age of innovation – I’ll call it the Golden Quarter – ran from approximately 1945 to 1971. Just about everything that defines the modern world either came about, or had its seeds sown, during this time. The Pill. Electronics. Computers and the birth of the internet. Nuclear power. Television. Antibiotics. Space travel. Civil rights."

This appears to be the crux of the argument:

But it could have been so much better. If the pace of change had continued, we could be living in a world where Alzheimer’s was treatable, where clean nuclear power had ended the threat of climate change, where the brilliance of genetics was used to bring the benefits of cheap and healthy food to the bottom billion, and where cancer really was on the back foot. Forget colonies on the Moon; if the Golden Quarter had become the Golden Century, the battery in your magic smartphone might even last more than a day.

None of this has anything to do with being more creative, technologically innovative or being a risk taking entrepreneur... this is more about declining market adoption rates for already existing and ever newly appearing innovations that simply can't, won't or don't scale because of various factors.  These factors include well-established entrenched interests creating barriers to new product entry in various industries and markets, but that's always been the case and much of these old guard interests are already losing ground, or being forced to reinvent themselves, everywhere.

If anything, innovation and entrepreneurialism (bigger than mere technological advancement) is in a global renaissance today, as more and more individuals have access to free tools because we have already brought the entry and distribution costs of using the tools that entrepreneurs need for trying out new ideas to pretty much an amusement park entry fee and with simplified sophistication of use requirements such that children in middle and high school can play in the game.  

How many high school students were creating multi-million dollar companies in the Golden Quarter?

We're actually now in the Golden Buck-Fifty and we should just quit whining and get on with it, or risk being left behind...

Plus it does seem like a lot of big breakthroughs are just around the corner. 

And let's not forget the poster boy of parlaying the Golden Quarter's ambitions into human civilization changing realities... Elon Musk – NOT a Golden Quarter golden boy... one of the current and ongoing "ours".

We're bereft of rich entrepreneurs and innovators taking big risks?!  Pshaw...

Let's give due credit to the Golden Quarter... those were some pretty damn sexy and sturdy shoulders to be standing on... now let's keep building up our own for those that come next.

Well it's good to hear you say so because I've heard lots of laments like the one in this article.

The article talks about how rich people stopped taking risks because it is easier to make money than make progress.

For the past 20 years, as a science writer, I have covered such extraordinary medical advances as gene therapy, cloned replacement organs, stem-cell therapy, life-extension technologies, the promised spin-offs from genomics and tailored medicine. None of these new treatments is yet routinely available. The paralyzed still cannot walk, the blind still cannot see. The human genome was decoded (one post-Golden Quarter triumph) nearly 15 years ago and we’re still waiting to see the benefits that, at the time, were confidently asserted to be ‘a decade away’. We still have no real idea how to treat chronic addiction or dementia. The recent history of psychiatric medicine is, according to one eminent British psychiatrist I spoke to, ‘the history of ever-better placebos’. And most recent advances in longevity have come about by the simple expedient of getting people to give up smoking, eat better, and take drugs to control blood pressure.

There has been no new Green Revolution. We still drive steel cars powered by burning petroleum spirit or, worse, diesel. There has been no new materials revolution since the Golden Quarter’s advances in plastics, semi-conductors, new alloys and composite materials. After the dizzying breakthroughs of the early- to mid-20th century, physics seems (Higgs boson aside) to have ground to a halt. String Theory is apparently our best hope of reconciling Albert Einstein with the Quantum world, but as yet, no one has any idea if it is even testable. And nobody has been to the Moon for 42 years.

Why has progress stopped? Why, for that matter, did it start when it did, in the dying embers of the Second World War?


Lack of money, then, is not the reason that innovation has stalled. What we do with our money might be, however. Capitalism was once the great engine of progress. It was capitalism in the 18th and 19th centuries that built roads and railways, steam engines and telegraphs (another golden era). Capital drove the industrial revolution.

Now, wealth is concentrated in the hands of a tiny elite. A report by Credit Suisse this October found that the richest 1 per cent of humans own half the world’s assets. That has consequences. Firstly, there is a lot more for the hyper-rich to spend their money on today than there was in the golden age of philanthropy in the 19th century. The superyachts, fast cars, private jets and other gewgaws of Planet Rich simply did not exist when people such as Andrew Carnegie walked the earth and, though they are no doubt nice to have, these fripperies don’t much advance the frontiers of knowledge. Furthermore, as the French economist Thomas Piketty pointed out in Capital (2014), money now begets money more than at any time in recent history. When wealth accumulates so spectacularly by doing nothing, there is less impetus to invest in genuine innovation.

The new ideal is to render your own products obsolete as fast as possible

During the Golden Quarter, inequality in the world’s economic powerhouses was, remarkably, declining. In the UK, that trend levelled off a few years later, to reach a historic low point in 1977. Is it possible that there could be some relationship between equality and innovation? Here’s a sketch of how that might work.

As success comes to be defined by the amount of money one can generate in the very short term, progress is in turn defined not by making things better, but by rendering them obsolete as rapidly as possible so that the next iteration of phones, cars or operating systems can be sold to a willing market.

In particular, when share prices are almost entirely dependent on growth (as opposed to market share or profit), built-in obsolescence becomes an important driver of ‘innovation’. Half a century ago, makers of telephones, TVs and cars prospered by building products that their buyers knew (or at least believed) would last for many years. No one sells a smartphone on that basis today; the new ideal is to render your own products obsolete as fast as possible. Thus the purpose of the iPhone 6 is not to be better than the iPhone 5, but to make aspirational people buy a new iPhone (and feel better for doing so). In a very unequal society, aspiration becomes a powerful force. This is new, and the paradoxical result is that true innovation, as opposed to its marketing proxy, is stymied. In the 1960s, venture capital was willing to take risks, particularly in the emerging electronic technologies. Now it is more conservative, funding start-ups that offer incremental improvements on what has gone before.

But there is more to it than inequality and the failure of capital.

During the Golden Quarter, we saw a boom in public spending on research and innovation. The taxpayers of Europe, the US and elsewhere replaced the great 19th‑century venture capitalists. And so we find that nearly all the advances of this period came either from tax-funded universities or from popular movements. The first electronic computers came not from the labs of IBM but from the universities of Manchester and Pennsylvania. (Even the 19th-century analytical engine of Charles Babbage was directly funded by the British government.) The early internet came out of the University of California, not Bell or Xerox. Later on, the world wide web arose not from Apple or Microsoft but from CERN, a wholly public institution. In short, the great advances in medicine, materials, aviation and spaceflight were nearly all pump-primed by public investment. But since the 1970s, an assumption has been made that the private sector is the best place to innovate.

The story of the past four decades might seem to cast doubt on that belief. And yet we cannot pin the stagnation of ingenuity on a decline in public funding. Tax spending on research and development has, in general, increased in real and relative terms in most industrialised nations even since the end of the Golden Quarter. There must be another reason why this increased investment is not paying more dividends.

Could it be that the missing part of the jigsaw is our attitude towards risk? Nothing ventured, nothing gained, as the saying goes. Many of the achievements of the Golden Quarter just wouldn’t be attempted now. The assault on smallpox, spearheaded by a worldwide vaccination campaign, probably killed several thousand people, though it saved tens of millions more. In the 1960s, new medicines were rushed to market. Not all of them worked and a few (thalidomide) had disastrous consequences. But the overall result was a medical boom that brought huge benefits to millions. Today, this is impossible.

The time for a new drug candidate to gain approval in the US rose from less than eight years in the 1960s to nearly 13 years by the 1990s. Many promising new treatments now take 20 years or more to reach the market. In 2011, several medical charities and research institutes in the UK accused EU-driven clinical regulations of ‘stifling medical advances’. It would not be an exaggeration to say that people are dying in the cause of making medicine safer.

Read the article:

He makes some great points, and I buy his basic thesis, but there's something suspicious about his time window.  If he had chosen 1940 instead of 1945 things might look a lot different!  It is easy to decrease inequality after a war destroyed half the economies, isn't it?

The take away is that necessity is the mother of invention.  Right now too many investors, corporations and consumers are all fat, dumb and happy -- or whiny and self-indulgent!

If we want to fix that, we need to be simultaneously desperate and optimistic -- the way the post-war world was in 1945.  

Which is pretty much where we are with The Swan Factory now that our first round of self-funding has officially run out. So I guess that's a good thing!

You have a way of finding the good side, Ernie.

The mix of desperation and optimism is a great driver of change, it's true.

It would be good if we could get capital to commit to longer term, more ambitious projects.

Well one common feature of the period from 1945 to 1970 were extremely high taxes on the rich. 

How do you stop people from being dumb, fat and lazy, especially the rich? Take away their money. How do you stop the brightest from dedicating their talents to creating elaborate financial instruments who's sole purpose is to create more electronic money? Take away their money. 

Piketty's Capitalism in the 21st Century deals a lot with innovation, and points out how in societies where wealth is as concentrated as it is currently the pinnacle of achievement is wealth. Innovation is engaged in primarily to achieve wealth, not for its own sake. Directing innovation in that manner corrupts it. It's no longer about a benefit to humanity, but about a how many more dollars it will gain you and your investors. 

If there is a hard wall, a point at which you cannot earn more money, because it will get taxed away, people will focus on other things as measures of achievement, success, status and interest. 

Of course taxing the rich won't work unless it's a coordinated global effort, so the rich can't run to tax havens. My worry is that we won't be able to get to a more equitable and egalitarian society without violence.  

The bigger point is why should rich people take risks if they can make good money with lower risk?

Ambitious endeavors need to be about more than profit. See for example the Gates Foundation.

I'm not sold that all_the_money_in_a_tiny_bucket is as big a blocker as just a handy red herring. 

I think that risk avoidance thing is the real killer. 

We are idolizing stuff over adventure.

By definition "adventure" has the risk of serious failure. 

We've institutionalized safety as more important - the most important - than anything else.

(super safe cars, bicycle helmets, no_child_left_behind, anti-virus software...)

So if you "know" that safety is the bottom line - just how risky will your innovation path be?

I think you have a good point. It's fear of risk that's holding back a lot of big endeavors.

Fear is one factor.  It seems greed is another factor.  The risk reward relationships are askew.  The measure of value isn't what it once was.  Have we learned from the .com bust or are we doing the very same thing again just more conservatively?

That's a good question. I don't have an answer. 

I think you're right that the risk reward relationship has gotten strange. 

The problem with capitalism seems to be that it has a sweet spot. Once you have too much of a concentration of wealth, the rich financialize the market, meaning they are only interested in the best financial return. The most efficient way to get the best return is through elaborate financial instruments that really just boil down to renting the richest's money to the rest of society. Create a wealth ceiling and tax away the rest, and you eliminate extreme concentrations of wealth. At the bottom end, provide a safe level of subsistence living and you eliminate the need to have a huge amount of savings for retirement. 

You can take care of risk by making education to the highest levels free (or at least externalize its costs to the society at large, while individuals pursuing an education incur no direct charges). Merit rather than money should be the primary driver for getting an elite education. Give everyone a subsistence living (just all the basics covered). Sure you'll get some lazy unproductive parasites, but modern biometric tech and data patterns will eliminate most of the fraud. Besides, lazy and unproductive is better than poor and desperate. With education and basic living expenses covered people will be easily able to take great risks where innovation is concerned, and they will take those risks, because status will be determined by achievement in forms other than wealth.

Capital markets, and the competition they bring, along with reasonable levels of wealth are still important ingredients. They just need to be harnessed to the needs of society, rather than our current state which is that they are harnessed to the needs of concentrated wealth. 

Of course all of the above is trite and meaningless without proper global cooperation and coordination. Can it be done? With modern digital technologies I have no doubt it could, or at the very least we are rapidly nearing that point. The biggest barriers are cultural and ideological, and those barriers create huge practical problems. But as long as wealth continues to concentrate, the likelihood of violent overthrow of the system will continue to increase, and what comes out of that violence... well lets just say I'd prefer to avoid a Mad Max scenario.  :)

Well said but a free education system is challenging to implement because many taxpayers will balk at the short term cost to them. 

Which reinforces the article's entire argument. 

I agree that capitalism's sweet spot is a challenge too.

Money is the easy target - but why? 

A lot of people have gone from ~zero to very rich in short amounts of time. (Making a lot of money isn't that hard. It's work but it's certainly not impossible.)

Rarely does someone who's already wealthy have a decent second act. 

That means there's a ton of opportunities for the rest of us. 

The question is - what do you want to put your attention on?

Where do you want to take that risk?

I think the challenge for most people is the challenge of finding enough resources.

Can't take big risks without big resources. 

That's true - an excellent answer - and maybe there's a different question which we've lost sight of.

How do we get people to start regularly taking small risks?

We got to the moon - not because we threw a bunch of money at it - but because centuries before someone wanted to see fireworks. 

Fireworks were the initial small risk (or maybe not small if  you were the person mixing the explosives).

How about the small risks? ones that can be leveraged over time into bigger gains?

Someone is probably taking those small risks today - building fireworks - but we can't see it because it's not yet ready for the moon. 

Great conversation.  I am firmly convinced that money is not the problem.  Nor is it precisely risk-aversion: lots of people take stupid risks all the time.  We don't need more of that.

What we really need is more moral courage: people willing to take calculated risks in pursuit of what is truly worthwhile.  

Lowering the risk barrier by increasing the flow or patience of capital sort of helps, but could well be counter-productive.  Same, frankly, for increased education: it can just as easily increase passivity and self-centeredness.

At The Swan Factory, we believe that moral courage can't be taught -- but it can be caught.  We are currently trying to find an angel investor who agrees, and would be willing to help us fund the experiment.

So I suppose I must concede that capital is important, and at the margins a limiting factor.  But I do NOT want easy or patient capital.  I want wise capital that:

  a) genuinely cares about improving the human condition

  b) has some clue about the kind of moral development is necessary to do that

  c) is willing to not just fund us, but hold us accountable for quickly proving we can do what we say

If you know anyone like that, please drop me a line! :-)

I like to think we've generated enough positive results along that dimension to justify a $100K investment, but I guess we'll find out this month...

Fingers crossed for you, Ernie!

Moral courage can be found but we can never quite be sure of the timeframe!

James has some great points and they may well be the answer.  Nevertheless, legislating a "wealth ceiling and taxing the rest" while "creating a safe level of subsistence" at a global level is not something I am optimistic of seeing in my lifetime (and I'm a very optimistic person).  Sadly it is more likely to occur after some level of Mad Max where the new architects of the new world order take the lessons described and put in suggestions like James' to protect us from this imbalance that capitalism reaches after a time.  

If only there were a realistic way to move us away from success being measured by this quarters P&L towards value produced and a longer view of what success is.  If only there were a realistic way to rework how we compete....a way that rewards innovative breakthroughs and supports collaboration.

Nonprofits like Gates Foundation and for-profits like Google, Tesla, and SpaceX can still take big risks.

Not everyone is driven by the quarterly P&L.

Perhaps more people will have the courage to eschew short-term thinking.

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