>I read an electronic version of this book, which I got for free from this web site. You can get your own copy here (in PDF format). The book is a short history of technologyand capital markets, starting from the start of the Industrial Revolution, until today.
The story starts with the invention of the steam engine and the results that followed. The point that the author makes in several places, is that innovation takes time. In many cases several decades pass between the idea occuring to someone and the successful deployment of the invention.
The extreme example of this mechanical computation. The first mechanical calculators were built by Pascal and Leibniz in 17th centuary, and look how long it took before we got actually programmable computers. Even considering that Charles Babbage had figured out all the major concepts (i.e. machines that stored programs and executed them).
The technological history is aimed at showing how computation and communication evolved, into what we have today: our computers and the internet.
The history of capital markets is kind intertwined into all this, because to bring these inventions to market someone had to put up the money. Throughout this history the words “bubble” and “panic” occur rather regularly. One of the early examples is an “ipo” of a company whose stock went on sale on July 4th at $25 per share, month later was trading at $280, and ended the year at $150. No, this wasn’t an Internet company. These were the stocks for the Bank of United States in 1793. (see Wikipedia)
One of the more interesting subjects covered, was the author’s criticism of the Gold standard – that is hooking up value of the country’s currency to a chunk of gold (in England the Gold standard was defined by Isaac Newton). The problem with the gold standard is that the only way to create more wealth you have to get more gold.
England had a problem because of this, in the midst of the Industrial Revolution. They had a big trade surplus – which meant that they had a lot of gold and their potential clients did not. At the time the Parliament (which was controlled by land owners) had passed protectionist laws (Corn Laws) to protect english farmers, so other countries could not sell food to England.
The result is that english factory workers were not being paid well (as the stuff they made was expensive to sell abroad, and the potential buyers lacked enough gold), but local food was expensive (since imports were severely limited) and this led to an unhappy working class. A ripe field for Karl Marx and his buddies.
Overall the book has a flavor of the James Burke series “Connections” (this was a show produced by the BBC, and shown in public TV in USA).
There were two slightly annoying things about the book. The author would stick silly puns/jokes here and there. Now, you know I do like puns, but these were not particularly clever and wound up being more of distraction. The second problem was that I spotted several minor factual errors. None of them were large, but it made me wonder about some of the historical facts. For example, the author refered to “Fermat’s Last Theorem” as “Fermat’s Last Algorithm”. I mean, come on! (grin)
All in all I enjoyed this book. I read the entire thing (nearly 200 pages). This book seems like a nice pre-quel to Thomas Friendman’s “The World is Flat: A Short History of 21st Century“. My next blog entries will be about Friedman’s book.