George Gilder's Exacosm

One of the problems with education is the constant pursuit of practical knowledge at the expense of pursuing answers to profound questions. No doubt we all need practical knowledge to function in everyday life, earn a living, to just get by in the world. But I now realize people are not guided by what they know, but rather what they believe—their worldview, through which we all refract reality.And in August of 1981, my worldview was about to be punctured permanently, albeit quite gradually, indeed, imperceptibly at the time. Looking back, Playboy magazine may be most responsible.No, not for the prurient reasons you are forgiven for immediately thinking of, but a far more banal explanation. As a barber, my father was an inveterate reader of Playboy's interviews, which are excellent if you have ever bothered to read one with someone in whom you have an interest. The roster of interviewees is quite impressive—world leaders, politicians, writers, and so forth—some of whom, no doubt, are self conscious about appearing in such a publication.As a matter of fact, when devout Catholic William F. Buckley, Jr. was asked why he would write for such a magazine, he wittily answered, "I write for Playboy because it is the fastest way to communicate with my 17-year-old son."In any event, my father read the interview with George Gilder in that August 1981 issue, which impressed him. Gilder had written Wealth and Poverty, a book Ronald Reagan was photographed with, along with giving it to members of his cabinet.Fortunately for me, my father purchased a copy of Gilder's book, convincingly insisting I should read it. I did. In one sitting. It changed my life. It opened my eyes to an entire new worldview that is beyond my capacity to describe in so brief a space.I came to recognize I was ensconced in the accountant's worldview, a belief system and body of knowledge that cannot really explain how wealth is created—it can only record it after the fact. Accounting is not a theory, so it cannot help us peer into the future; it can only provide assurance on the past. It understands nothing but itself, since it is an identity equation.Worse, it leads businesspeople to believe they can only manage what they can measure, as if weighing ourselves more frequently will change our weight. It confuses cause and effect, and results with process. It can audit the drunk's bar bill, but cannot change or explain his behavior. Even more pernicious, it focuses businesspeople on solving problems and fretting over yesterday, rather than pursuing opportunities and creating our futures, resulting in a costly mediocrity.Thus began a passionate study of value, effectiveness, intellectual capital, along with the real source of profits, all represented in the new business equation at the top of this Web site. The Philosopher Heraclitus wrote, "You cannot step in the same river twice, because by the second step it will already have changed."Thus began my crossing of the river to reach the other side, seeing the world from a different direction—one of value, opportunity, and risk taking, rather than history, costs, problem solving, and an increasingly irrelevant accounting equation. I must say, this side of the river is more wondrous and panoramic, allowing me to explain to myself with much greater clarity how the world really works.Gilder explains the ultimate source of wealth in his book Men and Marriage:

Demand, whether avaricious or just, is impotent to impel growth without disciplined, creative, and essentially moral producers of new value. All effective demand ultimately derives from supply; a society's income cannot exceed its output. The output of valuable goods depends not on lechery, prurience, lust, and license but on thrift, sacrifice, altruism, creativity, discipline, trust, and faith.Greed, in fact, impels people to seek first their own comfort and security. The truly self-interested man most often turns to government to give him the benefits he lacked the moral discipline to earn on his own by serving others....Any system that does not uphold the value of freedom of individuals, however lowly, will miss most of the greatest technical and economic breakthroughs.

I have had the great good fortune of meeting Mr. Gilder at several conferences and he never ceases to amaze me with his prescient insights, usually far ahead of their time. His recent talk at the Telecosm 2007 Conference can be viewed at the Discovery Institute's Web site, where Gilder is a senior fellow. As usual, Gilder makes some brilliant points, even quoting Peter Drucker from his last speech, before he passed away, in Seattle, which I blogged about here.As usual, Gilder pays homage to the entrepreneur, stating that knowledge is about the past while entrepreneurialism is about the future. Having just read Prophet of Innovation, the life story of Austrian economist Joseph Schumpeter—famous for the phrase "creative destruction" and also positing that the little-understood entrepreneur is the chief source of growth and dynamism in any economy—Gilder's talk is a theme that needs to be repeated often.In fact, Gilder is in a new movie produced by Acton Media, of the Acton Institute of Grand Rapids, Michigan. The movie is The Call of the Entrepreneur, and you can view a trailer here. The movie has been premiering around the world, and finally, I will be going to see it on December 12th in New York, along with Dan Morris and Chris Marston. Father Sirico, of the Acton Institute, along with George Gilder, will be present to provide commentary after the screening. For more information on this event, and others, go here.In fact, we at VeraSage are planning to host our own screening of this movie, most likely near the end of the first quarter of 2008, in both San Jose and Dallas. Stay tuned for details, and please let us know if you are interested in attending, along with guests—customers, colleagues, etc.I strongly encourage anyone interested in how wealth is created, the morality of capitalism, the ethics of free markets, and the central role entrepreneurs play in creating our future to read anything by Gilder. His Soul of Silicon speech to the Vatican on May 1, 1997 is one of the most profound things I have ever read in my life.He is one of the most eclectic writers and thinkers of the past century, an Adam Smith of our times. If he doesn't change your world view, he will at the least challenge it, always a healthy exercise for the mind.I suppose all sons, at one time or another, come to appreciate the wisdom of Mark Twain: "When I was a boy of fourteen, my father was so ignorant I could hardly stand to have the old man around. But when I got to be twenty-one, I was astonished at how much he had learned." Thanks, Dad.