The Small Wide World

The Small Wide World

I am in Milan for a series of meetings with a small private Italian chemical company that is partnering with us on a small pilot plant to make hydrogen and/or ammonia. I have combined this trip with my return from my motorcycle tour of Turkey, so it feels like a bit of a drawn our return home. Nonetheless, I am rallying to the mission. I met up with my two colleagues who joined me for this visit. One is an engineer and one is a lawyer. It is my job to set the narrative to drive towards a concluded JV agreement, but to leave it as flexible as possible to accommodate our changing technological accomplishments and landscape. Some of that flexibility is a logically good thing and some of it is a safety valve to accommodate our difficulty in nailing down our technology at levels that make economically compelling sense.

As we sat on the terrace of the Gallia Hotel in the heart of Milan (the hotel recommended by our partner and probably the hottest newly renovated hotel in town), a couple walked out on the terrace to take the one other occupied table for an early dinner (normal by American standards, but early by European standards). The woman looked familiar and it only took a second to recognize her as a senior financial professional that I had hired in 1997 to be my deputy in running the Private Banking business of Bankers Trust. She had previously been the President of one the Federal Reserve Banks, based on her economics background. I hadn’t seen her since 1999 when we sold ourselves to Deutsche Bank. She was in Milan with her husband. I approached her after I recalled her full name (it had been twenty years after all) and I could see that it took her a moment to remember who I was. I will rack that up to her age (she has at least five years on me) rather than any significant change in me or my being unmemorable in her long and illustrious career. She had been my direct report for two years, and while we had not been through any particularly traumatic events together, we had officed twenty feet apart and seen each other daily for those two years.

It was a reminder to me that the world can be both big and small at the same time. Whenever I wonder if I am allowed membership in the 1%, what with so many $20 million houses I see listed and traded, I find myself wondering where all these people got their money. Let’s do the math on that for a moment. With world population standing at 7.7 billion, 1% would be 77 million. The U.S. population in 330 million, so 1% is 3.3 million. The 1% net worth hurdle in the U.S. is $10 million. That means that if you do not have $10 million you are not in the 1%. Wow, that’s a surprisingly high threshold even for an ex-private banker like me. The threshold on income seems more logical at about $400,000 per annum per household, but that means that those households have 25X in net worth against their income. That seems awfully high as a multiple to me. We aren’t generally that good at saving to have accumulated that much. But maybe I’m thinking demographically for the broader population.

I have seen all the wealth distribution statistics and am as appalled by the increasing wealth distribution, or lack thereof, as anyone. The notion that three people in the U.S. have as much wealth as the lowest 60% of the population combined is a starting statistic. When we look at the world, and especially when we travel and see the great ancient cities as I have just visited during my tour of Turkey, I wonder if it is just destined to always be this way (as it has always been) or whether man can eventually evolve into something more egalitarian. I suspect that if we haven’t done so in 10,000 years and with all the recent advances in technology, it may just not be in our animalistic DNA to do other than strive to survive as the fittest. Nature may have wired us this way and that’s that. But is it written so?

Democracy in and of itself, with all the retreats we make from it and all the distortions of it, is a clear move in the direction of positive evolution. Technology such as the internet is clearly a great leveler of the playing field even if the tech giants like Amazon and Facebook take their power to the extremes of stripping some of the natural democratization of the vehicle by inflicting more control on users than the users like. My personal theory is that the ubiquitous cell phone revolution has in it, the grains of the best solution to date for a playing field leveler. I consider communication and the ability to transact in mobile manner to be the single most significant breakthrough for the vast majority of mankind. As the number of cell phones in use approaches to full population size, we finally have a means to insure that everyone has the true ability to participate in the global economy to the extent their natural tendencies and imagination allow.

I have always believed that if we can communicate with one another we can solve the vast majority of our differences. This does not eliminate that part of mammalian behavior that makes us overly aggressive towards one another or tending towards self interest over the common good, but it does, at the margin, provide a pressure valve for needless build-up of ill feelings and gives us more opportunity to find peaceful solutions for many of our differences rather than hitting first and asking questions later.

As an example, I was only modestly believing that a personal visit to this Italian partner was worth the effort versus simply a conference call. We might have gotten to a good place by phone, but we got to a much better place by communicating in person. The world is a big and risky place with lots to do to stay ahead of the curve and make progress towards collective prosperity. But the world that we live in is often a much smaller and more intimate place where more collective effort can be pursued when we make sure to keep good connections with people who can influence the outcome.