How We Got Here : A Slightly Irreverent History of Technology and Markets PDF
Preview How We Got Here : A Slightly Irreverent History of Technology and Markets
How We Got Here A Silicon Valley and Wall Street Primer A Slightly Irreverent History of Technology and Markets Andy Kessler For my Dad, who sparked my interest in technology Contents foreward v Logic and Memory 1 PART 1: THE INDUSTRIAL REVOLUTION 9 Cannons to Steam 11 Textiles 29 Positively Electric 39 Transportation Elasticity, Sea and Rail 46 PART 2: EARLY CAPITAL MARKETS 63 Funding British Trade 65 Capital Markets and Bubbles 73 Fool’s Gold 82 PART 3: COMPONENTS NEEDED FOR COMPUTING 101 Communications 103 Power Generation 109 PART 4: DIGITAL COMPUTERS 115 Ballistics, Codes and Bombs 117 Transistors and Integrated Circuits Provide Scale 136 Software and Networks 152 GPS 181 iv CONTENTS PART 5: MODERN CAPITAL MARKETS 187 Modern Gold 189 The Business of Wall Street 194 Insurance 210 The Modern Stock Market 222 ENIAC Press Release 243 Bibliography 247 Index 249 About the Author Other Books by Andy Kessler Credits Cover Copyright About the Publisher Foreword Talk about twisty-turny paths. I started life as an electrical engineer and ended up running a billion-dollar hedge fund on Wall Street. Like a pinball bouncing off of bumpers, I’ve been a chip designer, programmer, Wall Street analyst, investment banker, magazine columnist, venture capitalist, op-ed writer, hedge fund manager and even a book author. My mother thinks I can’t hold a job. Friends suggest I know very little about everything and a lot about nothing. That’s hard to argue with. But throughout it all, I learned over time to live by five simple creeds: 1. Lower prices drive wealth 2. Intelligence moves out to the edge of the network 3. Horizontal beats vertical 4. Capital sloshes around seeking its highest return 5. The military drives commerce and vice versa I’m not entirely sure how I came up with this list, but it has worked. I’ve invested by it and have read and under- stood the news by it. It has helped explain the unexplainable and has helped me peer into the fog of the future. I sat down with two different groups of people and tried to explain why these creeds are so valuable. The first group, vi FOREWORD engineering students who lived by math and science, were confused over how technology leads to business, even though advancing technology has driven and continues to drive most everything. The next group, business school students, was combative; they suggested that business and management skills trump economics. Maybe so. So both groups were equally skeptical, and barraged me with questions like: “How do you know they work?” “How come we’ve never heard of these things?” “Can you prove it?” “What if you’re wrong?” “You’re just making this up, right?” To explain in 20 minutes what took 20 years to seep into my sinews, I’d have to walk them through the history of the computer industry, from the transition from telegraphs to gigabit fiber optic networks and show how we moved from the Industrial Revolution to an intellectual property economy. And that’s the easy stuff. Add money, and a diatribe turns into a dissertation. I’d have to explain how stock markets came into being, and insurance and the follies of gold standards. And then somewhere in this tale would have to be the link between military doctrine and commerce. I needed to answer a few too many burning questions. What is the history of the computer industry? Of the communications industry? Of the Internet? Why does the U.S. dominate these businesses? Didn’t the British rule the last big cycle? What happened to them? Why do we have money? What is it backed by? What was the gold standard all about? Do we still have a gold standard? FOREWORD vii How did the stock market come into being and what is it for? Aren’t banks good enough? Who wins—money or ideas? Does the military get its technology from industry or the other way around? Did anything besides Velcro and Tang come out of the Space Program? Why does the U.S. have any industrial businesses left? There are too many questions to answer. So instead, I wrote this primer. Enjoy.
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