The reason why life stays the same and does not improve is because species cannot take a long-term view. They cannot invest resources today for a better life tomorrow. Progress is impossible.
The tyranny of genes precludes innovation. This is what biologist Geoffrey Miller says:
Evolution has no foresight. It lacks the long-term vision of drugs company management. A species can’t raise venture capital to pay its bills [while finding a better way to do things] … Each species has to stay biologically profitable every generation, or else it goes extinct. Species always have cash flow problems that prohibit speculative investments in their future … This makes it hard to explain innovations.
I rather like this image. The whole of the animal and plant universe is constrained by the inability to invest for the future. It helps to explain why nothing much has changed in the world for millennia, except random catastrophes and reactions to them. We tend to think that evolution equals progress, but this is not so.
It was the same for the human race until a few centuries ago. Nothing got much better because there was no investment for the future.
When Human Inventions Changed History
Things began to change when we got inventors. Some absolutely pivotal inventions, such as language, fire, and the wheel, do not appear to have been commercially motivated. They probably just happened by accident. But things began to change, oddly enough during the period that historians rather condescendingly called the Dark Ages, the period between the fall of the Roman Empire and the Middle Ages. From about 900, agricultural productivity rose sharply following the invention of the stirrup, the plough, and the horse-collar. Over the next few centuries, European inventions became astonishingly prolific. For example: the blast furnace, canal lock, chimney, coal fire, glass window, eye-glasses, marine chart, water-wheel, printing press, suction pump, treadle loom, water-driven bellow, weight-driven clock, and windmill. The first ever patent – for a canal boat rigged with cranes – was granted in Florence in 1421.
At the root of technological change is research and development. To make any of these inventions, somebody had to forego present income for the hope of future income. This is impossible in a society where either there is no surplus to put into inventions for the future, or there is no interest in commercial gain through research and development. You need both for inventions to take root. The Romans had certain wonderful inventions – aqueducts and under-floor heating, for instance – but had no interest in, or conception of, inventing for profit and driving the spread of the invention. They looked down on commerce. They viewed conquest as the only way of increasing wealth. Life for them, in today’s jargon, was a zero-sum game. Someone could only gain if someone else lost. It is not often realized, but the socialist ideology is the same. It is equally stupid. You only get innovation if you reward innovation. Socialists are Romans – much nicer Romans, less cruel, possibly more refined, but Romans nonetheless.
But I digress – I’m not trying to make a political point. The spread of invention and enterprise – which accelerated from about 1500 and became unstoppable from around 1750 – was associated with a change in the way humans viewed each other. Out went the aristocratic ideal of military glory and bloodthirsty plunder – the way of the animal kingdom from time immemorial. In came the merchant ideal of “gentle commerce” – where an artisan who provides value for the future could be rewarded in the present, where profit became the essential motive for making the future better. Gentle commerce could only thrive in a different kind of society, one that allowed individuality and personal liberty, because serfdom and slavery were seen to be not just rather distasteful, but also incredibly inefficient.
Between the canal locks, the canal boats rigged with cranes, and the invention of the internet and all the devices we use today – there is nothing but a cigarette paper. The one led to the other. Once inventions are allowed to start, they proliferate – one things leads to another in an unstoppable and glorious chain of progress, wealth creation, and improvement in living standards.
But we cannot get away from cash – from the cash issue that the rest of evolution has not solved, and never will. You only get inventions, or other progress, by allowing inventors, entrepreneurs, and other would-be improvers, to get paid today for stuff that may, or may not, lead to far more cash in the future.
Subsidising the Future is More than Financial
Let’s turn away from cash and commerce for the moment. Why do parents today invest in their children – subsidising them through education and emotional support for a decade or two – rather than viewing them as investments for their immediate benefit or their old age? Why do reformers spend their lives and often their wealth to make life better for their target audience in the future? Why do people build cathedrals that will be beautiful for centuries? Why have people been willing to give up their lives in war in the belief – mistaken or otherwise – that their children and grandchildren will benefit from that?
It is because something happened to human consciousness – I think it happened in the first and second centuries AD – that said, we are responsible for the future. It cannot be left to God or natural causes, but humans have to take responsibility – often driven by the belief that they were agents of God in history – for making things different and better in the future, compared to how they are now. And once humans started thinking about the future, and the possibility of improvement, then everything became possible.
Is it that no other species has the surplus to think about improvement? Or that no other species has the imagination?
How Venture Capital has Changed the World
Consider an early VC project.
Who was the person in history who created the most value with the least capital?
My nomination is Christoforo Colombo (1446-1506).
He was convinced that three small ships were all he needed to discover a Westward route to the Indies.
He had a hell of a time raising the money for his venture. He was Italian, so he went to all the Italian counts and kings. He tried the duke of Anjou in France. The King of Portugal. The duke of Medina-Sedonia. Eventually, at the second time of asking, the king and queen of Spain obliged.
But still, he found the money in the end. And the world has certainly never been the same again, even though Colombo was wrong about almost everything.
And Today …
In my lifetime, venture capital has grown from almost nothing to become the most important industry in the world. Not the most important in profit or revenue, but in impact. Because today, you understand, there are millions, perhaps tens of millions, of potential inventors who can be subsidized in the present to produce huge benefit for us all – and themselves – in the future. These creative people need not spend their lives working for large organizations that have done one creative thing in their existence and mostly will never do another. Anyone who wants to make the future better can try to secure financial backing for their idea. If it is any good, odds are that they will.
This is a transformation that is only just starting to work through in terms of social and economic benefit.
It is the biggest change not just in my lifetime, but perhaps in the history of the world.
Investing for the future – for commercial and social gain – is the biggest biological advantage that the human race has ever stumbled across. It is not much practised yet. But it is growing exponentially. It will change the face of the earth, and perhaps much more besides.