Innovation—It’s All in Your Head

The most important innovations are ideas. What really changes life is more mental than material—things you hold in your mind, not things you hold in your mitts.

The most important innovation in human history was the discovery and control of fire.

Any dumb animal can discover fire … if it falls into a volcano or a lightning strike sets the forest ablaze. But control of fire—starting one, keeping one from burning down the tree you live in, putting one out—requires an animal with ideas, a humanoid.

The same is true of tools. You can find a sharp rock. Ouch—usually by stepping on it. Or you can get the notion to make a rock sharp. Do you put it in the fire to make it sharp? No. Do you whack it on your tree to make it sharp? No. Do you strike one kind of rock against another different kind of rock? That’s the idea! (Even though, as I pointed out earlier, this doesn’t work.)

Ideas, even dumb ideas like smacking rocks together, are the innovations that have had the greatest effect on human society.

War is an idea … and a reminder that innovation is not necessarily a good thing in and of itself. Every innovation is a step forward. But you might step forward into a spear point.

All primates fight, scratching and biting among themselves. But some humanoid had the innovative thought, “Instead of fighting each other, let’s fight someone else.”

A band of Homo sapiens was sitting around, tired of making fires and running low on mammoth meat. One of them said, “The band of Homo neanderthalensis in the next cave over has a fire going and lots of mammoth meat. Let’s get together and kill them and take their stuff.”

(I seem to be using a lot of caveman examples and analogies in my discussions of economics. It may be that there’s something about economics that brings out the caveman in us all. More likely it’s that I have a Fred Flintstone understanding of how the economy works. Which makes me wonder how the Hanna-Barbera animated series of the 1960s would have portrayed digital devices. William Hanna and Joseph Barbera were fond of gags involving prehistoric analogs for modern technology—a bird-beak record player, a “pigasaurus” garbage disposal under the sink. Perhaps I should be writing this book on a “laprock” with a little “microsoftasaurus” scrolling an animal hide behind a hole in the stone screen.)

Anyway … Agriculture and the domestication of animals were other (somewhat better) ideas.

Being a hunter-gatherer is a lot of work. One day a gatherer said, “I was wandering all over the savannah gathering grain from wild grasses. When I returned I spilled some on the ground. Now there are more wild grasses sprouting right there. Instead of wandering all over the savannah we can just sit here.”

And they did. That’s agriculture in a nut (or fruit or grain) shell.

Hunting is difficult too. You have to find the roaming animals. Migrating wildebeest can roam as far as a thousand miles. You have to sneak up on the wildebeest. You have to be certain of spearing the wildebeest rather than the wildebeest goring you. Then you have to drag the wildebeest meat a thousand miles back to your family.

Hunting would be much easier if the hunters could get the animals to stick around, tied up in a barn so they couldn’t gore anybody.

Maybe humans tried to domesticate the wildebeest, but its first name isn’t “wild” for nothing. Maybe humans tried to domesticate the cave bear. Big mistake. Maybe humans tried to domesticate the rhinoceros. Bigger mistake.

Finally, humans settled on domesticating the mouflon and the auroch. Those are the names for untamed sheep and cows when they’re running around loose without a barn to be tied up in.

Sheep and cows were simple to domesticate, because they are, respectively, sheepish and easily cowed.

So now the hunters could sit around doing nothing with the gatherers. And every now and then the hunters would say, “Let’s go in the barn and kill a sheep and cow.”

I’m pretty sure this is how humans got the idea for civilization. They were bored with sitting around.

Very bored. How bored do you have to be before you start lugging giant blocks of stone for miles until you have so many giant blocks of stone you get the pyramids of Egypt?

And the idea of civilization didn’t stop with piles of rocks. Pretty soon you had the Ancient Greeks. Their big innovation was to have ideas about everything.

They had the idea to put on plays—lengthy, confusing tragic dramas such as Oedipus Rex by Sophocles. (Spoiler alert: Oedipus dates his mother. It doesn’t end well.)

They had the idea to compose a really, really long poem that doesn’t rhyme, The Iliad. As if that weren’t enough, they had the idea to compose another, The Odyssey.

They even had the idea to have ideas about ideas—philosophy.

Perhaps I had an ancestor in Ancient Greece. If I did, when philosophy came along, I’ll bet O’Rourkopolis was saying. “Could we please go back to hunting and gathering?”

But we must remember the many innovative benefits of civilization …

And I’ll think of one in a minute.

But it’s a beautiful day and I’m stuck indoors with that acme of civilized innovation, Microsoft Word. I’d rather be hunting. Or, this time of year, fishing. I’ll even gather, in a pinch, if there are wild blackberry bushes along the trout stream …

Okay, I thought of one.

The Ancient Greeks had the idea of democracy. Democracy isn’t perfect, but it’s an enormous improvement on how most people have been governed for most of history, from the Pharaohs to Putin.

Democracy, however, is also an example of how long it can take an innovative idea to come into widespread use, no matter how good the innovation is.

We’re spoiled by living in a world of fast-forward innovation. Monday morning an idea is nothing but some blue-sky rant on an obscure tech blog. Wednesday afternoon the innovation is for sale in Walmart.

This is not the norm. It might even be a sign that we’re faced with “innovation inflation” or experiencing an “innovation bubble.” Ideas usually take much longer to reach fruition.

“Milk from contented aurochs” probably occurred to Australopithecus three million years ago, but nobody had a fresh glass of it until about 8500 B.C.

Ancient Greek democracy flourished in just one small citystate, Athens, with a number of tyrannical interruptions and only from 508 B.C. to 338 B.C. There’s been lots of civilization since, but the idea of democracy wasn’t really tried again until 1776. And after 242 years we’re still working out the kinks.

We must, however, give civilization its due. Putting innovative ideas into effect would be even slower if it weren’t for civilization bringing crowds of people together in small spaces.

The Latin root of the word “civilization” is civitas, “city.” You can’t have civilization without cities. Watch reruns of Hee Haw for proof.

When you have a city crowd you have a crowd of skills and knowledge.

Imagine James Watt inventing the first practical steam engine without a lot of skills and knowledge readily at hand.

Watt would have had to go to the Harz Mountains in Germany to dig iron ore, travel to Damascus to find the best iron smelters and to Toledo, Spain, for the finished metalwork. He would have had to go out to Mongolia to find little horses to be pit ponies and then back to Wales to put the pit ponies to work mining coal to burn to boil water.

The Industrial Revolution would never have happened. Watt would have stayed in his native Scotland blowing off steam the old-fashioned way, drinking scotch.

Civilization also makes international trade possible. There is one basic requirement for international trade: international nations. You have to have some place to trade with.

Just sailing over the horizon in a random way, like Columbus did, encountering scattered groups of natives, enslaving them, and giving them diseases is not an efficient mode of international trade.

It’s better to know what you’re doing. Cornwall has tin. France has wine. Get the two together and you have a wine-filled tin cup. Better than drinking out of your cupped hands. Much better than not drinking at all.

Yet even in a simple trade innovation like this, ideas play an important role. The old “mercantilist” idea of trade was that two-way trade was bad. Cornwall should just sell tin to France and not buy wine or all the money would go back to the Frenchmen.

Of course, the result of “no two-way trade” is no trade at all. All your goods are made at home and stay at home. In Cornwall they imbibe Cornish cabernet sauvignon. Ugh. In France, instead of wrapping leftovers in tinfoil, they have to stuff the leftovers through the necks of empty wine bottles, which is particularly hard with a leftover pork chop.

It took the ideas of Adam Smith in The Wealth of Nations to convince people that international trade was mutually beneficial to the nations involved and not some rip-off to scam their national treasuries out of money.

Adam Smith’s innovative thinking opened a two-and-a-half-century era of free trade that, even more than the Industrial Revolution, enriched the world.

And this raises a third point of caution about intellectual innovation: Even the most brilliant ideas don’t always last. Due to dumbbells in high places in China, the U.S., the EU, and elsewhere, our wealth-creating period of free trade may be coming to an end.

Or may be replaced with something else. Because we live in a time when wealth is, more than ever, almost completely a product of ideas.

Consider the wealthiest men of the nineteenth and early-twentieth centuries: Cornelius Vanderbilt (railroads), John Jacob Astor (fur trade), Henry Ford (Fords), John D. Rockefeller (oil refining), and Andrew Carnegie (steel, with a strong sideline in philanthropy).

This was pretty physical stuff. Take the train to Beaver Creek, Colorado, fill up the Model T with gasoline, run over a beaver, and wear the beaver hat to the opening ceremony of Carnegie Mellon University.

Now consider the wealthiest men right now: Bill Gates, Jeff Bezos, Warren Buffett, Mark Zuckerberg, and Larry Ellison.

With your Microsoft PC and Oracle database, you don’t have get out of your chair to pester friends and acquaintances, purchase things you don’t know what to do with, and make investments you don’t understand.

It’s all right not to get out of your chair. It gives you time to think. The most important innovations are ideas. Don’t just do something, sit there.