It’s not often that I’ll find the brass nuts to call out the Sage of Omaha for talking through his hat, but this is one of them. In the usual fabulous letter to his shareholders including one heartwarming extract from Grandpa Buffett extolling the virtues of old-fashioned thrift. Nothing wrong with any of that. It’s here where I part company with the Sage of Omaha a little bit:
Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of “great uncertainty.” But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain.
Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born.
The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.
We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead.
The problem with this is that it is entirely ingenuity-centric. Human ingenuity and graft were undoubtedly a lot of why America’s best days lay ahead in 1776, though let’s face it they could hardly have lain behind 😉
And yet for all of the remaining three dates, human ingenuity had its little helpers, the gift of ancient sunlight that gave it a leg-up. For sure, that ingenuity was necessary to make use of it, but it is insufficient on its own to do all of the stuff we take for granted. London lies some four hundred miles from Edinburgh. In 1776 it would have taken the best part of a month to do it using renewable energy (horse power). Now I can decide to leave at noon and be in Edinburgh by sundown. Human ingenuity created the means, but it doesn’t power it.
Warren is right in that America will probably not run out of human ingenuity. But it might run out of resources that human ingenuity needs to deliver its current lifestyle. Whether or not America manages to use its human ingenuity to find a different, perhaps better lifestyle is going to depend on it getting rid of human ingenuity’s evil twin, America’s human sense of entitlement.
Just like Scarlett O’Hara was at her best when she clawed as the soil of Tara and declared that she would make something from nothing, so it seems so often that human ingenuity achieves its best when it does not have the drag of a sense of entitlement pulling people back. Entitlement makes us avoid seeing the world as it is by imposing the world as we”d like it to be onto it.
America’s best days may well be behind it. This won’t be because the wellspring of ingenuity will fail in America. If it happens it will be because Americans’ sense of entitlement to the benefits of cheap energy will blind them to alternative solutions that would need less energy.
Warren may be right in the end and Americans step up to the plate. But for once it won’t be their ingenuity that gets them through. It’ll be ditching their sense of entitlement.
Buffet was talking about Americans, so I’d followed the theme. But it applies to all of us who currently have our lives made easier and more plentiful by cheap oil. We all need to lose the sense of entitlement, and learn to give energy the respect it deserves. Though I can easily bike to work and back, I am not a good enough cyclist to sustain the power to run this laptop computer I am writing this on for the amount of time it took me to write this post. But I have enough ingenuity to imagine an alternative which would be be just as rewarding. Sometimes it is good to drink a few beers with friends and hold forth on a subject. Humans did that well for centuries before the oil age.
Our challenge in the coming decades will not be finding enough ingenuity. It will be getting rid of our sense of entitlement…
10 thoughts on “Warren Buffet is wrong, there Are limits to Human Ingenuity”
What counts, as always is adaptability. Buffett is taking that for granted in the USA and you, I think, are pointing out that maybe that cannot be assumed. Societies can become inflexible.
Certainly, to be adaptable will mean drastically reducing the ancient sunlight in our energy diet and making big, probably very big, lifestyle changes. There are many examples of societies which clung to their lifestyle “entitlements” and died out (the Greenland Vikings, being perhaps the most famous).
Fortunately, markets are an effective way to motivate people to change, more effective, I would say, than official reports. When oil hits and stays above $200 per barrel, more things become possible, but for many, it’s not going to be nice.
That’s my quote you pinched there for a title 😉 (thanks! feels flattering :-D) and the post itself is a beaut! Nice one, guv!
> Fortunately, markets are an effective
> way to motivate people to change
No Sir. As ermine says, “entitlement” will want them to invade some poor country for their “daily fix”!
It’s not just you and Surio who intuit a limit to human ingenuity. This piece prompted a dim memory of something I read many years ago, suggesting that the rate of innovation is much less today than it used to be. Amazingly, a quick Google turned up the article at the top of the list!
For your edification, here’s the link: http://www.newscientist.com/article/dn7616-entering-a-dark-age-of-innovation.html
I know I’ve been there before, but I really can’t see anyone (American or not 😉 ) ‘ingenuiting’ their way out of the Three Laws.
SG – spot on with some societies becoming inflexible, and a privileged sense of entitlement, I’m sure, has a particularly ossifying effect. Indeed, it has even been elevated as a virtue – ‘the American way of life is not negotiable’, anyone? What worries me more than this infantilisation of the population, though, is the rampant flight from science and the tendency towards anti-intellectualism. Of course, I needn’t point out prevailing attitudes towards evolution or climate change, right?
Ingenuity seems to be the preserve of a declining and beleaguered minority, yet the same people who on one hand deny evolution or climate change seem to be the most rabid proponents of techno-utopianism. You know the types, ‘evolution’s a hoax but technology will save us from resource depletion/foreign oil dependence/environmental collapse’.
I’m trying to skirt around religion, but finding it increasingly difficult… because this is where a lot of the anti-intellectualism arises. Adaptability and social conservatism don’t make easy bedfellows, and the latter is becoming more entrenched and militant. Combined with a sense of entitlement, this offers great inflexibility.
However, all that said, my main point is that the role of ingenuity has a secondary role in ‘progress’. The primary role falls to serendipity. One of the canards often hoisted by the techno-cornucopians is that ‘the Stone Age didn’t end because we ran out of stones…’ which extropolates to ingenuity (or ‘substitution’ for the economists) will provide a solution to any depletion.
My retort is that ‘the Stone Age didn’t end, the Bronze Age began’ (okay, strictly the Chalcolithic, but I reckon these people have enough trouble following the argument already 😉 )
No-one sat down and said “I’m bored of stones, let’s get with the ingenuity and invent something better…” No. A new resource emerged serendipitously, after which ingenuity was applied. Likewise when sperm whales were getting rather thin in the sea, the result wasn’t an application of ‘ingenuity’ to find an alternative. There was the serendipitous discovery of mineral oils, followed by the application of ingenuity. I expect this pattern is repeated over and again. It’s the new resource that drives the ingenuity, not vice versa.
So even if it’s true (debateable!) that ‘Human potential is far from exhausted’, it’s of no use if resources ARE exhausted.
Interesting link. Thanks for that very interesting retort to that asinine “Stone age” remark.
‘Human potential is far from exhausted’, is of no use if resources ARE exhausted.
@Surio – after posting that, I’ve had a few further thoughts regarding the ‘Stone Age didn’t end…’ meme, most notably the actual fact that the Stone Age DIDN’T end. It is still alive and kicking in some (increasingly rare and endangered) cultures around the world, if you consider the likes of the Koi-San, some few uncontacted Amazonian tribes and probably still some remoter areas of PNG.
Now, looking at how these societies interact with their ecosystems, there is no doubt at all that they are every bit as ingenious and innovative as are we. The difference is that some resources are unavailable, and/or certain innovations on which we’ve built further, have not occurred locally. A technologically-savvy person from an industrialised society will not stand a great chance of survival in either the Kalahari or the Amazonian rainforest or the Arctic. Consider in those areas, societies do still persist using Stone Age technology, yet when industrial tech is introduced they become less resilient – I think primarily through distortion of the social framework.
Given that some Amazonian peoples have specific uses for over 500 different plant species, there’s no way we can argue they are any less ‘ingenious’. All societies are built layer upon layer of past experience, whether that happens to include metal-smelting and all that follows, or generations of intimate knowledge of plants and ecosystems. Given some of the limits we could well be facing in the coming decades, it would be very foolish to assume one system would be more useful than the other, or that the ‘ingenuity’ which counts will be that applied to meeting ‘needs’ as opposed to that applied to reducing ‘needs’.
Agreed on all counts. Indeed, you may already know about Wade Davis? Scroll to the very end on the Wikipedia page to view some of his talks.
He touches on exactly those cultures and exactly those very same points you make.
Amazonian peoples’ encyclopaedic knowledge, San people’s survival skills in the Kalahari, the people of Penang that had no concept of wealth, but bucketloads of social capital and ecosphere knowledge….
I know exactly what you mean. 🙂 And it does sadden me that they are being razed as we speak. 😦
“you may already know about Wade Davis?”
I’d heard the name, but haven’t encountered any of his work directly – but I now have a nice list of titles with which to challenge my local library 😉
[OT]When I was a student (nearly 30 yrs ago now…) I studied pharmacy, and I was tempted well away from the syllabus by an amazing collection of books on ethnobotany, absolutely fascinating. That’s when and how I first learnt to respect traditional knowledge (and became disillusioned with Western medicine…).[/OT]
Sounded like you had an “education”, while being “trained” for the workplace. You were lucky.