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How We Got Here: A History of Technology and Markets

How We Got Here: A History of Technology and Markets

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by Andy Kessler

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Best-selling author Andy Kessler ties up the loose ends from his provocative book, Running Money, with this history of breakthrough technology and the markets that funded them.

Expanding on themes first raised in his tour de force, Running Money, Andy Kessler unpacks the entire history of Silicon Valley and Wall Street, from the Industrial


Best-selling author Andy Kessler ties up the loose ends from his provocative book, Running Money, with this history of breakthrough technology and the markets that funded them.

Expanding on themes first raised in his tour de force, Running Money, Andy Kessler unpacks the entire history of Silicon Valley and Wall Street, from the Industrial Revolution to computers, communications, money, gold and stock markets. These stories cut (by an unscrupulous editor) from the original manuscript were intended as a primer on the ways in which new technologies develop from unprofitable curiosities to essential investments. Indeed, How We Got Here is the book Kessler wishes someone had handed him on his first day as a freshman engineering student at Cornell or on the day he started on Wall Street. This book connects the dots through history to how we got to where we are today.

Editorial Reviews

Publishers Weekly
This pasted-together romp through 300-odd years of technological advancement and financial development reads as it is billed: material cut from the manuscript of Kessler's 2004 book, Running Money. Per the brief foreword, Kessler's aim is to provide a list of "five simple creeds" that have helped him "explain the explainable" and "peer into the fog of the future": lower prices drive wealth; intelligence moves to the edge of the network; horizontal beats vertical; capital sloshes around seeking its highest return; and the military drives commerce and vice versa. His proof is delivered in a whirlwind tour of the industrial and digital revolutions. The first half of the book is a game of hopscotch through the Industrial Revolution and the evolution of early capital markets. The second half tells the story of the computer era and the growth of today's capital markets. Sandwiched between the two is an oddly abbreviated two-chapter section, 10 pages in all, that covers the development of the telegraph, telephone and power generation. Kessler returns to his "simple creeds" here and there, but the only real unifying force is hokey, techy wisecracks. The result is rehashed history often bewilderingly unconnected in theme and chronology, though many individual anecdotes are well told. (June) Copyright 2005 Reed Business Information.
Library Journal
Kessler (Running Money: Hedge Fund Honchos, Monster Markets and My Hunt for the Big Score), a journalist, former hedge fund manager, Wall Street analyst, venture capitalist, and chip designer, presents a fast-paced, albeit condensed, history that reaches back to the beginnings of the Industrial Revolution, breezes through the development of early capital markets and the rise of communications, and connects it all to the explosion of the computer age and the growth of modern capitalism. In offering this brief history of technological change and its ramifications, Kessler seeks to demonstrate the five simple creeds he says he has learned over time: lower prices drive wealth, intelligence moves out to the edge of the network, horizontal beats vertical, capital sloshes around seeking its highest return, and the military drives commerce and vice versa. He writes in a hip style that slings the slang and hits the high points of this fascinating story, providing a more in-depth analysis of how today's modern information age evolved than is found in James Burke's Connections. Recommended for all public libraries and academic libraries supporting business, engineering, and computer science curricula.-Dale Farris, Groves, TX Copyright 2005 Reed Business Information.

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HarperCollins Publishers
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How We Got Here

A Slightly Irreverent History of Technology and Markets
By Andy Kessler

HarperCollins Publishers, Inc.

Copyright © 2005 Andy Kessler
All right reserved.

ISBN: 0060840978

Cannons to Steam

All it took was a little sunshine.

In 1720, the weather improved in Britain. No reason. The Farmer's Almanac predicted it. Crop yields went up, people were better fed and healthy. The plague, which had ravaged Western Europe, ended. Perversely, a surplus of agriculture meant prices dropped, and many farmers (of crops, not taxes) had to find something else to do.

Fortunately, there was a small but growing iron industry. Until the 1700s, metals like tin and copper and brass were used, but you couldn't make machines out of them, they were too malleable or brittle. Machines were made out of the only durable material, wood. Of course, wood was only relatively durable; wheels or gears made out of wood wore out quickly.

Iron would work. But natural iron didn't exist; it was stuck in between bits and pieces of rock in iron ore. A rudimentary process known as smelting had been used since the second half of the 15th century to get the iron out of the ore. No rocket science here, you heated it up until the iron melted, then you poured it out. Of course, heating up iron ore until the iron melts requires a pretty hot oven and to fuel it, a lot of charcoal, the same stuff you have trouble lighting at Sunday BBQ's. Charcoal is nothing more than half burnt wood but, as we all know, if you blow on lit charcoal it glows and gives off heat. So the other element needed to create iron is a bellows, basically, like your Uncle Ira, a giant windbag. Medieval uncles got tired really quickly cranking the bellows, so a simple machine, basically a waterwheel, was devised to crank the bellows, powered by running water. Hence, early ironworks were always next to rivers. This posed two problems, the iron ore came from mines far away, and after a day or two, the forest started disappearing around the mill and the wood needed for charcoal came from further and further away. It is unclear if ironworks sold their own stuff or if middlemen were involved. This raises the age-old question whether he who smelt it, well never mind.

Meanwhile, the iron you would get out of the smelter was terrible, about the consistency of peanut brittle; the sulfur content was high, because sulfur is in most organic material, especially trees, and the sulfur from the charcoal blended with the iron ore. It seems that wood refused to play a part in its own obsolescence for machine parts.

This pig iron, and lots of it, was used for cannons and stoves and things, but it couldn't be used for screws or ploughs or a simple tool like a hammer, which would crumble after its first whack.

Iron makers evolved their process, and added a forging step. If you hammered the crap out of pig iron, reheated it, and hammered it again, you would strengthen it each time until you ended up with a strong substance aptly named wrought iron. Besides gates and fences, wrought iron worked reasonably well for swords and nails and screws. But to create decent wrought iron, you really had to get the brittle out of the pig iron.

In 1710, Abraham Darby invented a new smelting process using coke, basically purified coal, instead of charcoal. The resulting pig iron was better, but not perfect. His son, Abraham Darby II improved on his dad's process and by mid-century, was oinking out pig iron usable for wrought iron, but only in small quantities. Unfortunately, like iron ore, coal was far away from the river-residing ironworks, so roads were built (sometimes with wood logs) and wagons brought coke to the river works. No surprise then that many ironworks moved to be near the coke fields. In 1779 Darby III would build the famous Ironbridge over the river Severn to transport materials with the iron supplied by the process his father and grandfather had developed. Heck of a family.

Demand for iron ore and coke took off and mining became a big business. One minor problem though, mines were often below the waterline and flooded constantly. This cut down on dust but too many miners drowned, hence the huge demand for something to pump out that water. The answer was a steam engine.

The concept of an engine run by steam had been around since the ancient Egyptians. It is not hard to image someone sitting around watching a pot of water boil and remarking that the steam coming off expands, and thinking, "Gee, if I could just capture that steam, maybe it would lift that big rock to the top of that pyramid." In fact, an Egyptian scientist named Hero living in Alexandria in 200 BC wrote a paper titled "Spiritalia seu Pneumatica," which included a sketch of steam from a boiling cauldron used to open a temple door. It looked like a failed seventh grade science fair project.

Not quite a couple of thousand years later, steam projects started boiling up again ...


Excerpted from How We Got Here by Andy Kessler Copyright © 2005 by Andy Kessler.
Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Meet the Author

After turning $100 million into $1 billion riding the technology wave of the late 1990s, Andy Kessler recounted his experiences on Wall Street and in the trenches of the hedge fund industry in the books Wall Street Meat and Running Money (and its companion volume, How We Got Here). Though he has retired from actively managing other people's money, he remains a passionate and curious investor. Unable to keep his many opinions to himself, he contributes to the Wall Street Journal, Wired, and lots of Web sites on a variety of Wall Street and technology-related topics, and is often seen on CNBC, FOX, and CNN. He lives in Silicon Valley like all the other tech guys.

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How We Got Here: A Slightly Irreverent History of Techology and Markets 3 out of 5 based on 0 ratings. 2 reviews.
Anonymous More than 1 year ago
Guest More than 1 year ago
I was hooked to buy this book as I too was an engineering student at Cornell years ago. After reading the book, I felt if I was one of those described in the later chapters of this book who was unknowingly overcharged by the stock traders (the author) to buy stocks (this book). Delivery was unexpected. But the age old lesson is learned once again.