The history of civilizations and the importance of context. Book#84
Do you ever wonder why the West has dominated (until now) the world in terms of technology and wealth? Is it because of its superior intellect, superior drive, superior skill? What if the answer was much simpler than that? What if the current dominance of western nations was just another example of being at the right place at the right time?
I am generally curious to learn about anything that can help me better understand how the world works. I attended an investing conference a couple of years ago and someone recommended this “old” book “Guns Germs and Steel” by Jared Diamond published in 1997. I dived in. I understand why it became a best seller and a winner of the Pulitzer Prize in 1997. Sometimes in life you stumble upon something that is changing the way you see the world. This book had that effect on me.
“Fascinating book that lays a foundation for understanding human history.”―Bill Gates
What if the state of the world as we know it, with the western nations at the top of the wealth ladder (for how long though?), was mostly the results of centuries of accumulated contextual competitive advantage?
What if continental Europe had historically been the birthplace of powerful civilizations mainly because its people enjoyed perfect climates and land configurations? First, they had ideal conditions to obtain the better yielding crops. Second, they had ideal conditions that enabled many large animals to thrive, and this in turn expanded the pool of suitable candidates for domestication (Horses, Cows etc). If you can harness the power of animals to help you grow crops on a convenient landscape, you can feed your people more efficiently. And if you have a head start in food production, what difference does it make? Well, it makes a pretty big difference on how societies develop.
Such societies advanced more rapidly beyond the hunter-gatherer stage. And then they developed writing, technology, government, organized religion, and metal weapons.
This is a very plausible and interesting theory which made me rethink several things. The main takeaway I will reflect on is the parallel that one can make when trying to understand the roots of a successful endeavor, a successful business, a successful life.
To a much greater extent than we think, success depends on the context. What lesson do I draw for myself? The main one that I can think about is that if I am unable to achieve an objective in a given context, how about changing that context? It sounds simple and obvious but it takes some brain to understand it and even more courage to act on it. Young start ups call this “pivoting” others just call this “adapting”. For some people it means changing jobs, for others it means changing country, and for others it means changing friends or partners.
Overall it made me reflect on a famous sentence you have certainly already heard (I thought it was from Darwin but recently learned that it is not): “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
In the context of investing the parallel that one can make is to look for situations with favourable contexts, i.e. situations with upside potential, limited downside risk, and plausible catalyst like sector growth and a group of smart co-investors/managers. From then on, serendipity plays its part.
To illustrate this point, I like using a simple surfing metaphor given that I enjoy that sport. Surfing a wave because you happen to be at the right place and the right time is nothing worth admiring. However, paddling out and moving around to position oneself in the right spot to catch the next good wave is an art. It takes a great mind and great skills.
Thought provoking.
PS: The 3 parts National Geographic documentary adaptation is great to watch. More info here. That made me want to add all the TED talks from Jarred Diamond to my watch list.
My purpose in life is independence, fulfillment and a better understanding of how the world works. Like Charlie Munger, I believe in the discipline of mastering the best that other people have ever figured out. And like Sir Isaac Newton, I believe in our ability to see further than any others before us by acknowledging that we are standing on the shoulders of giants. With this blog, I hope to keep track of my learning about investing, business, decision making, entrepreneurship, and self-development while inspiring others to do the same. For the moment the format of this blog will be one post for each book that has influenced me, but I expect it to evolve over time. This is book number 84 of my journey. Join me now. John.
