Technology, Magic and the Economy

If you have read the “Lord of the Rings,” you know that wizards were able to talk and see things going on in distant places by peering into a crystal globe called a “Pilantir.” When J.R.R. Tolkien wrote his trilogy during the mid-20th century this was magic, imaginary things only available to people with special powers. Today, it doesn’t take a wizard with special powers to see and talk with people far away. The devices that everyone uses today are called “smart phones” and they do things that make a Pilantir look old-fashioned.

British science fiction writer Arthur C. Clarke gave us “Three laws of Prediction”

  • When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.
  • The only way of discovering the limits of the possible is to venture a little way past them into the impossible.
  • Any sufficiently advanced technology is indistinguishable from magic.

We had an opportunity to attend a meeting recently at a new medical facility near our office and had an opportunity to speak with the facility’s  President. He spoke of advances in medical technology and the amazing improvements that have been made in imaging systems. Scanners that allow physicians take three-dimensional pictures of our internal organ in a few minutes.  What once was magic is now useful technology.

Those of you who are of a certain age may recall a cartoon character by the name of Dick Tracy. He was a detective who wore a wrist watch that was also a two-way radio.  That was technologically impossible in those days.  Today, the entire industrialized world is built around wireless communication devices. Our basic industries would come to a halt without them. Cars, trains and planes would stop without them. Modern factories would shut down; banking and investing would stop. To anyone born in the 19th century today’s reliance on wireless electronic communication would look like magic.

Many people worry that the engines of growth seem to be grinding to a halt; that the future is going to be bleaker than the past. But that is to deny what’s going on. Just a few examples: the old adage that you can’t get blood from a stone is still true, but we can get oil from rock, it’s called “fracking” and has made oil and gas more abundant than ever. Facebook has revolutionized the way we keep in touch with friends. Twitter has changed the way we communicate ideas. Apple has made so many changes in our lives that it’s hard to list them all. Entire new industries worth many billions of dollars have been created in the last few years, and changes keep happening. Companies we think of as Internet entities are planning moves that will transform brick-and-mortar industries. Google is developing and self-driving cars and Amazon will deliver your order using remote-controlled drones.

The technology 25 years from now will look like magic to the people living today. All these things represent an opportunity for investors who share a vision of the future; the kinds of things we once relegated to the realm of magic. That magic will make us all richer.

Tagged , , ,
%d bloggers like this: