I'd like to tell you about this amazing breakthrough that will be announced in 2018 - a universal vaccine against cancer, perhaps; or a portable fusion reactor; or failing that, a really good smartwatch. Newspaper headlines will scream the good news; the shares in the innovative company will soar; the Nobel Prize committee will tear up the shortlist and start again. I'm fairly certain, however, that it's not going to be quite like that.
What I will forecast, with confidence, is that some new invention will be developed that is destined to change the world. In 2018 the patent will be granted or the research paper published or the product launched, but all I can tell you about this invention is that few people will pay much attention at the time.
In any case, long print runs made no economic sense without another world-shaking invention: paper, the first inexpensive writing surface. Paper was invented in China 2,000 years ago and was widely used in the Middle East (the word "ream" has Arabic roots). Medieval Europeans knew about Arabic paper but it took several hundred years before they embraced it enthusiastically - in the 13th century. Now paper is everywhere - wallpaper, sandpaper, filter paper, corrugated card, toilet paper. If paper was invented today, I'd like to think we'd immediately recognise it as a miracle, but suspect it would take some time.
It did in 1974, when an economist named Paul Samuelson published an article proposing a new invention - the index fund, a low-cost investment vehicle that passively tracked the stock market as a whole. Both theory and evidence suggested that such an investment would work. Surely this was an idea to make the world take notice: Samuelson had been an adviser to President Kennedy; his textbook had for 30 years been the bestselling US textbook in any subject; he had been awarded the Nobel Prize. Samuelson was the most famous economist on the planet. But nobody noticed his index-fund idea except a gentleman named John Bogle, who quietly rose to Samuelson's challenge.
Bogle launched the index fund in August 1976, and the few people who noticed laughed in his face. He was called "un-American" and the fund was dubbed "Bogle's Folly". But Bogle's fund was a slow-burn success. Vanguard, the company he founded, is a financial-industry titan, with trillions of dollars under management. By cutting investment costs without compromising on performance, index funds have saved investors hundreds of billions of dollars throughout the decades. Nobody would have given them a chance back in 1974, however. During a speech in 2005, when Paul Samuelson himself was 90 years old, he was happy to give Bogle the credit. He said,"I rank this Bogle invention along with the invention of the wheel, the alphabet, Gutenberg printing, and wine and cheese."
True enough. I just wonder how long it took people to appreciate that the wheel and the alphabet were good ideas.
This article was originally published by WIRED UK
