Innovation Blog

Hal, the 2001 Computer, as “Watson”:  Sane, Smart – and Creative?

By Shlomo Maital

 

 Jennings, “Watson” and Rutter, 

 playing Jeopardy

Remember Hal, the psychotic computer in the movie “2001”, inspired by sci-fi writer Arthur Clarke and directed by Stanley Kubrick, in 1968?  Well, Hal’s back, 43 years later. He has a new name:  “Watson”.  And he’s not only sane, he’s very very smart, very fast… but, not yet, creative.  *

    In “2001”, Hal the computer, on a space ship, has a nervous breakdown.  Early drafts of the script show it occurred because Hal was order to withhold information from the astronauts about the true purpose of their mission. Apparently, it’s tough for computers to lie.

   “Watson” is an IBM computer named after IBM founder Thomas Watson and designed to play the TV game “Jeopardy”. In Jeopardy, three contestants are given ‘answers’ (“This 50th American state is the birthplace of the current President”), and asked to give the appropriate ‘questions’ (“Who is Barack Obama?”).  First to press a buzzer gets to answer; if the answer is right, the contestant wins money. The one who wins the most total money, wins the game and returns the next time.    The star of Jeopardy is named Ken Jennings, whom won 74 games in a row, and Brad Rutter, another act.  At the IBM T.J. Watson Research Center in Yorktown Heights,  the computer “Watson” went head-to-head with Jennings and Rutter.  “Watson” won hands down.   Watson beat its opponents to the buzzer, in the second round, 24 times out of 30, and got most of the answers right.

    This is not a frivolous exercise. It cost IBM a lot of money. IBM will use the publicity to leverage new products, including a Watson-like physician’s assistant, where doctors would query it just like with Jeopardy.  This, in turn, will change the nature of medical education. “The power of Watson-like tools will cause us to reconsider what it is we want students to do,” said Dr. H. Chase, a clinical medicine professor. No longer will memory skills be paramount. 

    The one thing neither Hal nor Watson (nor IBM’s Big Blue chess-playing computer that defeated world champion Gary Kasparov) could do, is to be innovative and creative, coming up with novel ideas that link seemingly unrelated things.  In Jeopardy, wherever there was ambiguity in the question, Watson stumbled.  Only the human brain has this capability called ‘imagination’, the ability to see not what is, but what could be.  Indeed, as computers take over more and more memory and cognition functions, the one thing computers cannot do will become immensely valuable to those possessing it – the capability to dream. 

* see: John Markoff, “Artificial intelligence gets lift on TV quiz”, IHT, Feb 18, 2011, p. 21.   

 Innovation Blog

Jellyfish, Curiosity, Collaboration: Why the 2008 Nobel Prize for Chemistry is a Great Parable for World-Changing Innovation  

 

By Shlomo Maital

 

 Jellyfish: Green Edges when Upset! 

 

 

 The Nobel Prize in Chemistry was awarded to three scientists: one Japanese, one Chinese, one American.  The story of how their research helped unlock the innermost secrets of life is a parable about the three drivers of world-changing innovation:    curiosity, collaboration, and “X + Y” (connecting things others would not think of joining).

 

   First, the story.  The Nobel Prize in Chemistry 2008 was won by Osama Shimomura, Martin Chalfie, and Roger Tsien.   My source is: http://www.moleclues.org

 1.     The jellyfish glows green around the outer edge when it becomes agitated. What makes it glow???  Who cares?  Only those who have the freedom to follow their interest, and who have curiosity about everything strange, on this earth.  In 1961 Osamu Shimomura set out with other scientists to find out the answer.  They managed to  isolate two proteins which were responsible for making the jellyfish glow. They named them aequorin and green fluorescent protein (GFP).   Little did they know that many years later the green fluorescent protein would change the world of science.

     Normally proteins are not visible in a microscope, but green fluorescent protein (GPF) absorbs Ultraviolet light or blue light and then glows green.  Wouldn’t it be great if you could link GFP  to another protein that you are interested in studying, so that you could see your protein glow?  Perhaps even in other organisms?”

2.     The second Nobel Prize winner, Martin Chalfie, showed that this was indeed possible!  Each protein in our cells is produced by turning on a specific sequence in our DNA, a “gene”.  Chalfie inserted the gene that codes for GFP next to the gene that expresses another protein.  When the protein is made, it is automatically attached to GFP:  a glowing protein is produced!  Now scientists can see exactly where in the cell the protein is and follow its movements using a microscope.”

3. “ Roger Tsien, the 3rd Nobel winner, looked at the molecular details of GFP and was able to change the protein very slightly to produce new types that emit light in DIFFERENT COLORS! Now researchers could see proteins interact with each other in the cell by labeling each one with different colors…  multicolored glowing proteins revealing the secrets of life inside the cell!  Tsien thus built on the findings of his colleagues. 

 

   “ Nowadays GFP and similar proteins are a very important tool in science to light up and see molecules at work using a microscope.  Some really spectacular applications include mice that fluoresce under ultraviolet light (used in medical research)… And Glofish…fish that glow thanks to a linked fluorescent gene.”

 

Innovation Blog

The Entrepreneur Who Could Not Spell His Own Name:

How Jeff Pearce Overcame Dyslexia

By Shlomo Maital

 

Young Jeff (James) Pearce

 

Over my 43 years as an educator, I have taught many students who  had dyslexia, a learning disability that makes it hard to read and write, afflicting from 5 – 10 percent of the population.  For a few, it was severe.  They used many self-invented tricks to overcome it and many went on to achieve great success—the discipline and persistence required to overcome dyslexia served them well later, as start-up innovators.

Here, from the BBC World Service’s Outlook program (recounted by journalist Jo Fidgen), is the story of James (Jeff) Pearce, in his own words.  Jeff is literally someone who could not spell his own name for 54 years, nor read or write – yet he was voted Retailer of the Year in the U.K. and twice built business empires.   If Pearce could succeed, despite the odds, surely any of us can.

   “Three letter words, cat, dog.   I’d spell them backward.   Teachers thought I was disruptive, kids laughed at me, teachers put me in the corner with a dunce cap, made me face the wall, they did not know what dyslexia was then, and the punishment made me worse,  I lived with shame.  In promotion from junior to senior high, the day before I went in, my mum knew I would get laughed at, because I could not write my own name, James, I couldn’t spell it,  mum sat me down and said from now on, you are JEFF  “J” “E” “F”, then add another ’f’ on , I could just about handle that. I lived with that all my life. I became Jeff Pearce.”

  “My mom brought us up on the ‘markets’, she had to find money to feed five children, dad drank every penny he earned;   in the morning, she told me, on you go on, go earn some money. I was 14.   I went to the ‘markets’, asked the business people there if I could do errands, deliver messages? I became an entrepreneur…that put me in good stead for when I went into the world.     I set up own business at 17.  I’ve always worked for myself, for the simple reason I was unemployable, who would employ someone who couldn’t write their own name?”

  “How did I manage?  I lived two lives.  As entrepreneur/businessman,  I employed over 40 staff.  They didn’t know I lived another life of torture, as a man that couldn’t write his own name. I hid things.  Gina, my wife – she came with me to the bank, gave me a form to fill out, she’d say, I’ll do that so you can keep talking.  I couldn’t fill it out.  She’d say, Jeff, just sign there.  And it got worse.  We lived a millionaire life style. We mixed with doctors, accountants, lawyers, we’d go for dinner.   I couldn’t read the menu. Gina would say, Jeff,  the steak, you like that, “Yes, I’ll have that”, I’d say, pretending I read the menu.  Wine list?   Gina:  Jeff’s bad at wine, let me pick.    Gina and I have been together, for 35 years…she’s with me here today, she goes with me everywhere.”

“I hid my dyslexia from our daughters for many years.  “I was living millionaire life style, house, car, horses, you name it, big cars… I’d come home,  our daughters Katie, 7, Fay, 5,  would say, daddy read us a story.  They passed me a book.  I went to pieces. I started to make a story up with the pictures.  ”Daddy you’re being silly, you can’t read”.  I can! I can! I said.  Lights out!   I cried my eyes out.  Please don’t let that happen again, I told Gina,  I can’t handle that.  I would have given all my wealth up just to be able to read my girls a story.  I felt I was living a live of a con man, trickster,  once in school the teacher said to me, no good will come of you, you were a waste of time…   those words were in my mind, but I always felt, nobody who can’t spell their name should be an entrepreneur nor live this life style. “

“When I lost my business, in 1992, when the recession came, bank called me in, called the loan, I lost everything,  I sat there, close to suicide…at that time, I thought, that was my punishment for being a fraud.  I should not have succeeded in the first place.  I lost my family home.  My daughters were privileged,  all of a sudden I took it away from them. But  I started again, on the markets,  10 hard years later, I built up another empire, my own dept. store in Liverpool,  I felt then I wasn’t a fraudster I was named most outstanding retailer of the year…in the taxi on the way back to the hotel that night, with 2 awards, I felt as equal as the person next to me..I told my daughters, I can’t read and write!  It was very emotional.    It was a relief to tell them, best moment in my life, a  beautiful feeling, 54 years of hell, it all came out.   After retirement, I learned to read and write.  Why not before?  The shame and embarrassment was with me all my life.  I want to go to schools now and tell those who have dyslexia, do not hide it, I did it for 54 years!”  

Global Crisis/Innovation Blog

Capitalism for the Long Term: The View from McKinsey

By Shlomo Maital

  

 

 

 Dominic Barton, McKinsey

Writing in the March issue of Harvard Business Review, McKinsey global managing director Dominic Barton addresses “Capitalism for the Long Term”.   Few people are better equipped to write about how capitalism should be reformed than the peripatetic consultants of McKinsey.  Barton’s main point:  Business leaders — rewire the way you govern, manage, and lead corporations to restore the public’s trust in a capitalist system jeopardized by the financial crisis and ongoing social anxiety.  If you don’t, the political system will reinvent capitalism, and you will not like the result at all.

   Barton says the business leaders of capitalism must implement three major reforms in the way they think and act.  

   First, “business must jettison its short-term orientation in favor of a  longer-term focus.”  The short-term focus that led to financial collapse did major harm to almost everyone, including those who committed the ‘crimes’.  “

   Second,  “executives must also infuse organizations with the perspective that serving all major stakeholders is not at odds with maximizing corporate value.“    In an earlier blog, published on Aug. 6, 2010 (timnovate.wordpress.com),  I noted the credo of Scott Paper magnate Tom McCabe, who insisted his managers seek the wellbeing of customers, workers, the community, thee nation, and finally, the shareholders – an old-fashioned credo that seems to be making a comeback.

   Finally, companies must bolster the power of boards to cure the ills stemming from dispersed and disengaged ownership.  The purpose of the Board of Directors is to give the CEO and top management a hard time, track everything they do and say, and challenge their decisions, making them provide hard data and clear rationales.  Failure of many boards to do this led to the fatal crashes of Fannie Mae, Lehman Bros., Citigroup, GM, and many other companies.   

   Investor – check your portfolio of stocks. Do the companies whose shares you hold understand these three ‘new capitalist’ principles? If not, perhaps it is well to find companies who do.

  http://e.mckinseyquarterly.com/10742fd80layfousubktwfcyaaaaaa2bdqgjshi2w4ayaaaaa

 

 

Innovation Blog

Innovations That Don’t Create Jobs:  A Global Social Dilemma

By Shlomo Maital

 

 

Tyler Cowen: The Great Stagnation

Innovations have been declining!

 

Here is the list of the world’s top 20 innovating organizations, from the magazine Fast Company, for the year 2010.  (See below).                   

Company         Rank*   Revenue   Profit   ($ billion)    *rank in Global Fortune 1000,  2010

1. Facebook                –                                             

2. Amazon      #340   $24.5    $0.901                       

3. Apple           #197   $36.5      $5.7                         

4. Google        #355   $23.7    $ 6.5                          

5. Huawei       #397   $21.8     $2.7                           

6. First Solar               –                                              

7. PG&E                       –                                              

8. Novartis     #160    $45.1       $8.4                         

9. Walmart         #1   $408         $14.3                                             

10. HP             #26   $115         $ 7.7                         

11. Hulu                      –                                              

12. Netflix                   –                                              

13. Nike     #453    $19.2        $ 1.5                           

14. Intel    #209     $35        $ 4.4                           

15. Spotify                  –                                              

16. BYD                       –                                              

17. Cisco   #200   $36.1          $ 6.1                           

18. IBM   #48       $96             $13.4                          

19. GE     #13      $157             $11.0                          

20. Disney #199  $36.1           $ 3.3   

    Several interesting conclusions emerge. 

* First, very few of the great innovators are big, in global size (ranked by revenues, from the Global Fortune 1000, 2010).   Walmart is an exception (#1).  So is GE (#13) and HP (#26). 

* Second, the hottest of the new innovators are pure Internet companies (Facebook, Hulu, Netflix, Spotify) that create massive amounts of wealth but very few  jobs, because when your product is bits and bytes, you do not need assembly-line workers. 

* Third, the list of Top 20 innovators from 2005 (Bloomberg/Business Week) is very different. A great many innovators have fallen off the list,

  In his best-selling new eBook, The Great Stagnation, Tyler Cowen notes that the automobile industry generated millions of good-paying jobs, but Facebook employs 2,000, Twitter 300 and eBay about 17,000.  Only 14,000 people make and sell iPods, but iPods eliminate other jobs (CD manufacturing, etc.) and anyway most of those iPod-based jobs are outside the U.S.  Cowen notes that this current era’s technological breakthroughs generate great gains for society but very little added economic activity.

   Can we imagine a futuristic economy, in which a majority of the population does  not work at all, and in which the privilege of working goes to only an elite handful with high-level skills? A society in which innovation benefits humanity, takes brains, but requires no hands to generate those benefits?

    Recall that Henry Ford complained he got an (un-needed)  brain every time he hired a pair of hands. Perhaps in future, his innovative industrial descendants will complain that they get (un-needed)  hands along with the brain.  Perhaps that future is already here.

Global Crisis/Innovation Blog

 Wake Up, America! To Innovate, You Have to Make What You Invent!

By Shlomo Maital

 

 

 

Paul Revere: when America still made stuff!

Veteran New York Times reporter Louis Uchitelle is helping to wake up America. *  His point: When you no longer manufacture, dumping everything off to China, you also cease innovating. 

   To make this point, he studies the flatware industry.  Since America’s colonial times and Paul Revere (silversmith), America has made knives, forks and spoons.  The last such plant closed recently,  in Sherrill, NY. Some 80 workers lost their jobs.  Nobody seems to notice.

    But, Uchitelle notes,  the local value-added component of the remaining manufacturing plants is also declining, as more and more components are imported, mainly from China.

“The imported portion has risen to more than 25 percent from 17 percent in 1997, according to Susan Houseman, a senior economist at the W.E. Upjohn Institute in Kalamazoo, Mich. The Boeing Company, to consider one striking example, once bought all of its components from American suppliers, or made them in its factories here. Now the wings of several of its airliners are manufactured by Japanese subcontractors and shipped across the Pacific in giant cargo planes.”

Economist Houseman says an accurate measure of America’s manufacturing would give it no more than 10.5 per cent of GDP, down from over 30 per cent in the 1950’s.

   “How did the nation get into this situation?” Uchitelle asks.   “America gambled, in effect, that by importing more from foreign suppliers and from American companies that had set up shop abroad, consumer prices for manufactured products would fall, without any sacrifice in product quality. Low-wage workers abroad would make that happen.  American manufacturers, on the other hand, would be the world’s best innovators, developing sophisticated new products here at home and producing them, at least initially, in their domestic factories.  The first part of the arrangement worked very well. Consumer prices did fall as imports flooded in.   The second part of the arrangement, however, has been more problematic. As it turns out, the United States is not the only path-breaker. The Toyota Prius, the first hybrid, shines as an example of Japanese ingenuity, and more than a decade after that car was developed it is still being exported from Japanese factories, marrying innovation to production and jobs”.

       “The big debate today is whether we can continue to be competitive in R&D when we are not making the stuff that we innovate,” Houseman says. “I think not; the two can’t be separated.”

       The point is simple. You have to make the stuff you innovate.  If you don’t, you lose the value added from innovation, and you lose the vital information that production brings. 

      Wake up, America!  Get your manufacturing back.  If you don’t, you will lose your innovation as well.

 * Louis Uchitelle, “When Factories Vanish, So Can Innovators”, Global NYT February 12, 2011

 

 

 

Innovation Blog

 The REAL IQ: How Creativity and Intelligence Combine

By Shlomo Maital

     “Teach boys and girls nothing but facts!  Facts alone are what is wanted in life.”

      –         Thomas Gradgrind & Mr. McChoakumchild,  “Hard Times”,  Charles Dickens

 

 

 

Mom, Dad, great news, my IQ test came back negative!

  

    Psychologist Robert Sternberg, a pioneer in cognitive psychology and now an educational innovator,  has used his remarkable life story to blaze new trails in the concept of IQ.    After he suffered from text anxiety and failed an intelligence test. Sternberg realized that this score did not predict his intelligence.   Just one year later, in the seventh grade, Sternberg developed his first intelligence test:  the Sternberg Test of Mental Ability, or STOMA. Because he was a perpetual ‘outsider’, Sternberg never feared challenging the prevailing paradigms in psychology, such as conventional IQ.

  Writing in School Psychology International,*  Sternberg outlines his own concept of intelligence, called WICS, an acronym for “Wisdom”, “Intelligence”, “Creativity” and “Synthesis”.  “The basic idea is that citizens of the world need creativity to form a vision of where they want to go and cope with changes in the environment, analytical intelligence to ascertain whether their creative ideas are good ones, practical intelligence  to implement their ideas and to persuade others, and wisdom to ensure the ideas will help achieve ethically-based common good. Then, ‘synthesis’ is needed to combine the W, I and C. 

    The WICS theory is remarkably similar to what innovators need, in my view, to achieve marketplace success:  Creativity, for vision, Intelligence for analysis and implementation, Wisdom, to create value for everyone not just the inventor, and then Synthesis, to combine the three seamlessly.  I would prefer to call the ‘innovation’ version of the model, CIWS.

    Sternberg has created a Rainbow Project to measure WICS and complement the standard terrifying SAT tests for college entrance. At Tufts U., where he served as Arts & Sciences Dean, he developed Kaleidoscope, which asked applicants to write stories on such creative topics as “The End of MTV”.  Kaleidoscope scores did not correlate at all with SAT’s.

    Sternberg’s WICS teaching method encourages students to: a) create, b) invent, c) discover, d) imagine if… e) suppose that, and f) predict.  Teaching for creativity is very hard for teachers used to teaching ‘facts’. 

     These six stages match closely stages the inventors follow, in particular, d) e) and f),  imagine, suppose, predict.  They also match what parents and teachers often call ‘dreaming’, for children and students whose vision wanders far away from blackboard ‘facts’.

    * R.J. Sternberg. “WICS: A new model for school psychology”.  School Psych. International, Dec. 2010.

Innovation Blog

 Where Does Innovation Come From?  R&D? Or “Dark Matter”?

By Shlomo Maital

 

Eric von Hippel and user-created innovations   

 

 Innovation, much of it, comes not from institutionalized R&D funded by companies, but rather from tinkerers and users, who have a real need and solve it inventively with their own two hands.

      Eric von Hippel is an MIT scholar who pioneered research showing ‘lead users’ can be enormously valuable to companies, who want to improve their products. Now, with a British study funded by the British government, he conducted the first large-scale survey of consumer innovation ever done. *

    The astonishing result:  The amount of money individual consumers spent in making and improving products was more than twice the amount spent on product research and development by all British companies combined, over a three-year period.  It makes sense – there are probably 20 million British consumers, and perhaps 1/100 that number of R&D engineers.   Von Hippel will replicate his study in Finland and in Portugal.

     Harvard Business School professor Carliss Baldwin says, “we’ve had on a set of mental blinders”, because we have missed, or underplayed, this key source of inventive progress.

   “We’ve been missing the dark matter of innovation,” von Hippel said, meaning,  just as dark (i.e. not visible or detectable) matter exists, because otherwise the universe would not be expanding, even though we can’t really see it, so does consumer –driven innovation exist, though we don’t really see it (until now).   Von Hippel says 77 per cent of scientific instrument innovation come from users in the field.  One of the implications?  Change patent law, to enable people to build on others’ ideas without fear of law suits.

    Does von Hippel practice what he preaches?  He does indeed.  His book Democratizing Innovation is available for free, by download from his personal website, even though the standard print version is published by MIT Press.  I wonder how he managed to persuade MIT Press that free downloads actually boost print book sales.  

    I am certain that this type of small-scale one-off innovation is crucial.  Think of all the times you have taken a product, and in small ways changed it to improve it.  Now, imagine if you had shared these ideas with the world, using Internet, the way Daniel Reetz did.

       Reetz built a commercial book scanner, that normally costs $10,000, out of two old Canon A590    Powershot cameras, using parts rescued from junkpiles.  Total cost:  $300.   He can scan a 400-page book with it in 20 minutes!  Reetz uploaded his do-it-yourself product to DIYbookscanner.org, 1,000 people joined his forum on that site, and 50 people actually built the scanner.

    Do you have an innovation, small or big?  Tell the world about it.  Share it.  If enough of us do this, a wave of innovation will wash over the globe, enriching all our lives.   

* Patricia Cohen, “Turning innovation on its head”,  Global New York Times, Feb. 11, 2011, p. 18

Innovation Blog

From Homeless to Harvard: The Story of Liz Murray

By Shlomo Maital

   

 

from the movie: From Homeless to Harvard

 Innovation, ultimately, is about resilience and the ability to overcome huge obstacles. Perhaps the remarkable story of Liz Murray, as told on BBC’s World Service Outlook program, can help inspire us.  Few have overcome obstacles as great.  What are the odds that a homeless virtually-orphaned child, whose parents were both addicts from the time she was three, could graduate from Harvard University and become a top motivational speaker?

   Liz’s parents were both severe drug addicts, injecting heroine into their veins, often in Liz’s presence, from the time she was three years old.  She recounts, in her book, that they were always loving parents, despite the addiction.   But they lived in filth and hunger, because the monthly welfare checks were spent on drugs, leaving her and her sister to scrounge meals from neighbors. She recounts,  “We would do things like eat ice cubes, or chapstick or toothpaste. We would knock on our neighbours’ doors.  But everyone in the neighbourhood was living off government cheques.”  Her father was an ABD (all but doctorate) in psychology and read voluminously, using New York City’s famous Public Library (often under pseudonyms, because he failed to return books); Liz, thus, read widely too.

   Liz’s mother was diagnosed as HIV positive in 1990, and she died in 1996.  With a mother in and out of hospital, and a father who was still heavily addicted to heroin, Liz eventually ended up on the streets, homeless. 

    Despite being homeless, she went from high school to high school, seeking admission.  After many rejections, she was somehow accepted to an  “alternative” high school – Humanities Preparatory Academy in Chelsea, Manhattan.  She did homework at friends, in school, even while living on the streets.  She had an inspiring teacher, who chose her as one of 10 students to go on a field trip to Boston  — her first time outside of NYC.  They visited Harvard University. Liz recounts she could not take her eyes off the Harvard students, clean, neatly dressed, wearing Harvard sweatshirts. 

   Back at high school, she began looking for college scholarships.  She spotted, in The New York Times, a full $12,000/year scholarship for four years.  Some 21,000 students applied.  She made it into the last 20.  In her final interview, she was asked about her ability to overcome obstacles – and told her story about living on the streets, homeless, while attending high school. She got the scholarship to Harvard.

       According to her account on the BBC,  “while she was at Harvard, she began public speaking – helping people who, like herself, had an almost impossible mountain to climb to succeed in life.”

       “Now, today,  she makes her living as a motivational speaker and founder of Manifest Living, a company which offers workshops for people wanting to change their circumstances.”

     Liz’s father also contracted AIDS, and she returned to care for him.  “Just before he passed away, he wrote me this card,” she recounts.  “He wrote in the card, ‘Lizzy, I left my dreams behind a long time ago. But I know now they’re safe with you. Now we’re a family again.'” 

     The next time you encounter an obstacle, big or small, to achieving your goals, remember Liz Murray.   With determination and courage, the human spirit is capable of anything.

Global Crisis/  Innovation Blog

More Stuff, Less Happiness – Something Is Very Wrong!

By Shlomo Maital

  

 

  Tammy and Logan Strobel:  Live on Less!

For years, as an economist, I taught students about something called a “utility function”.  The inputs were material things or income. The output was “utility” or happiness. And of course, the more stuff, the more income, the more happiness.  It was always, everywhere, a rising function.

   Wrong.

   U.S. per capita income went from $24,079 in 1980 to $40,454 today. This is a steep rise of 100 per cent (double), despite the global 2007-9 crisis.  Did Americans’ happiness double too?  Or even rise?   I doubt it. 

     Economists (quoted in USA Today, “Is our standard of living better than ever?” , Feb. 4-6, 2011, p. 1)  say, “people grossly underestimate our progress over time because of technology”.  Ohio State economist Richard Steckel urges people to shut off their electricity and plumbing, to see just how great things are now, relative to the past.

     In other words, we’re just dumb. We’re way better off, but we just don’t realize it. 

   “People earning $200,000 a year are feeling and behaving like those with half that income,” says the CEO of First Command Financial Services. 

     The USAToday article describes an Oregon couple, that asked themselves seven years ago, how much does it take to live comfortably these days?  Their answer:  $20,000 – $25,000.  Result:  Tammy Strobel gave up a job in an investment firm, cut her income in half and chose to live cheaper and simpler.  She and her husband limited themselves to 100 “things” (possessions) each.  “Taking a step back from materialism helped me understand the big picture”, she says. 

      According to a USAToday poll, only 3 per cent of people think it is possible to be comfortable on less than $20,000 a year.  Nearly two-thirds think $50,000 a year is the minimum, and 25 per cent think $100,000 is required.  Ten per cent think $150,000 a year is the minimum!

    There are two strategies in life. One is to constantly boost one’s income to match rising spending.  A great many people find this is not the road to happiness, because the added ‘stuff’ the income brings is not the source of wellbeing.  A second route is to spend less and less, to adjust spending to income, and to treat non-work time as ‘income’ by giving it a value, often very high.  Very few people even consider this option.  No sane business or politician would encourage it.  But it may be the route to true sustained happiness, for individuals and for our planet.   

Blog entries written by Prof. Shlomo Maital

Shlomo Maital

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