Titan: The Life of John D. Rockefeller, Sr.

Notes from Titan: The Life of John D. Rockefeller, Sr. (1998), by Ron Chernow:

* Rockefeller equated silence with strength: Weak men had loose tongues and blabbed to reporters, while prudent businessmen kept their own counsel. Two of his most cherished maxims were “Success comes from keeping the ears open and the mouth closed” and “A man of words and not of deeds is like a garden full of weeds.”

* Far more than a technocrat, Rockefeller was an inspirational leader who exerted a magnetic power over workers and especially prized executives with social skills. “The ability to deal with people is as purchasable a commodity as sugar or coffee,” he once said, “and I pay more for that ability than for any other under the sun.” Employees were invited to send complaints or suggestions directly to him, and he always took an interest in their affairs.

* At meetings, Rockefeller had a negative capability: The quieter he was, the more forceful his presence seemed, and he played on his mystique as the resident genius immune to petty concerns. As one director recalled, “I have seen board meetings, when excited men shouted profanity and made menacing gestures, but Mr. Rockefeller, maintaining the utmost courtesy, continued to dominate the room.”

* Standard Oil had taught the American public an important but paradoxical lesson: Free markets, if left completely to their own devices, can wind up terribly unfree. Competitive capitalism did not exist in a state of nature but had to be defined or restrained by law. Unfettered markets tended frequently toward monopoly or, at least, toward unhealthy levels of concentration, and government sometimes needed to intervene to ensure the full benefits of competition.

* “Great wealth is a great burden, a great responsibility. It invariably proves to be one of two things—either a great blessing or a great curse.”

* To Rockefeller, the least imaginative use of money was to give it to people outright instead of delving into the causes of human misery. “That has been our guiding principle, to benefit as many people as possible. Instead of giving alms to beggars, if anything can be done to remove the causes which lead to the existence of beggars, then something deeper and broader and more worthwhile will have been accomplished.”

* Rockefeller reviewed every bill that arrived at home and often patrolled the hallways, turning off gaslights. Such habits were not simply reflexive stinginess but were rooted in bedrock beliefs about the value of money.

* “A man’s wealth must be determined by the relation of his desires and expenditures to his income. If he feels rich on ten dollars, and has everything else he desires, he really is rich.”

The Big Thirst: The Secret Life and Turbulent Future of Water

Notes from The Big Thirst: The Secret Life and Turbulent Future of Water (2010), by Charles Fishman:

* We only have that one allotment of water—it was delivered here 4.4 billion years ago. No water is being created or destroyed on Earth. So every drop of water that’s here has seen the inside of a cloud, and the inside of a volcano, the inside of a maple leaf, and the inside of a dinosaur kidney, probably many times.

* Water itself isn’t becoming more scarce, it’s simply disappearing from places where people have become accustomed to finding it—where they have built communities assuming a certain availability of water—and reappearing somewhere else.

* The total water on the surface of Earth (the oceans, the ice caps, the atmospheric water) makes up 0.025 percent of the mass of the planet—25/100,000ths of the stuff of Earth. If Earth were the size of a Honda Odyssey minivan, the amount of water on the planet would be in a single, half-liter bottle of Poland Spring in one of the van’s thirteen cup holders.

* A molecule of water that evaporates into the air—from a fountain, from a puddle, from your skin—spends about nine days floating in the sky before returning to Earth as rain or snow.

* There is no global water crisis, because all water problems are local, or regional, and their solutions must be local and regional. There is no global water crisis, there are a thousand water crises, each distinct.

* Water utilities use 3 percent of the electricity generated in the United States, equal to the output of 162 power plants, making water utilities the largest single industrial users of electricity in the country. In California, 20 percent of the electricity in the state is used to move or treat water.

Also.. bottled water is an indulgence:

* Ten gallons of tap water, at home, costs on average 3 pennies. That’s the equivalent of getting seventy-four of those $1.29 half-liter bottles of water we love so much for less than a nickel. We happily pay three thousand times that price at the convenience store—one bottle for $1.29. But when the water bill goes from $30 to $34 a month, customers react as if they’ll have to choose between their prescription drugs and their water service.

* Americans spent $21 billion on bottled water in 2009. It doesn’t seem like an astonishing sum of money—about $65 per person, $1.25 a week. But in the context of water, $21 billion is huge. Consider, for instance, what Americans spend for all the water delivered to their homes—350 gallons per family per day, 365 days a year. The water bill comes to about $412 a year. Which means we spend $46 billion a year on all the household water we use all year long—to run the morning shower, to boil the pasta, to water the lawn. As a nation, we spend $46 billion for a year’s water, always on, whenever we need it. And we spend another $21 billion—almost half as much—for bottled water, for an amount of water that wouldn’t get us through eight hours of water use at home on any given day. But there’s an even more arresting comparison. We spend about $29 billion a year maintaining our entire water system in the United States—the drinking water treatment plants, the pump stations, the pipes in the ground, the wastewater treatment plants. So as a nation, we spend very nearly as much on water delivered in small crushable plastic bottles as we do on sustaining the entire water system of the country.

“If we see only the worst, it destroys our capacity to do something.”

Howard Zinn, 2004:

In this awful world where the efforts of caring people often pale in comparison to what is done by those who have power, how do I manage to stay involved and seemingly happy?

There is a tendency to think that what we see in the present moment will continue. We forget how often we have been astonished by the sudden crumbling of institutions, by extraordinary changes in people’s thoughts, by unexpected eruptions of rebellion against tyrannies, by the quick collapse of systems of power that seemed invincible.

An optimist isn’t necessarily a blithe, slightly sappy whistler in the dark of our time. To be hopeful in bad times is not just foolishly romantic. It is based on the fact that human history is a history not only of cruelty but also of compassion, sacrifice, courage, kindness. What we choose to emphasize in this complex history will determine our lives. If we see only the worst, it destroys our capacity to do something.

If we remember those times and places–and there are so many-where people have behaved magnificently, this gives us the energy to act, and at least the possibility of sending this spinning top of a world in a different direction. And if we do act, in however small a way, we don’t have to wait for some grand utopian future. The future is an infinite succession of presents, and to live now as we think human beings should live, in defiance of all that is bad around us, is itself a marvelous victory.

“You are not going to get very far in life based on what you already know.”

Charlie Munger, speaking at USC Law School Commencement in 2007:

Wisdom acquisition is a moral duty. It’s not something you do just to advance in life. As a corollary to that proposition which is very important, it means that you are hooked for lifetime learning. And without lifetime learning, you people are not going to do very well. You are not going to get very far in life based on what you already know. You’re going to advance in life by what you learn after you leave here.

I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.

Just as civilization can progress only when it invents the method of invention, you can progress only when you learn the method of learning.

Nothing has served me better in my long life than continuous learning.

Oil: A Beginner’s Guide

Notes from Oil: A Beginner’s Guide (2017), by Vaclav Smil:

* In 2016 motor and aviation gasoline accounted for a third of global refinery throughput. The US share of global gasoline consumption was about 41% of the total, or more than 1,200kg/capita: the country now consumes more gasoline than the combined total for the EU, Japan, China and India.

* Nearly two-thirds of the world’s refined products are now used in transportation (roughly 2.5Gt in 2005) and in the US that share is now more than 75%. Transportation’s dependence on liquid fuels is even higher: in 2015 about 93% of all energy used by road vehicles, trains, ships and planes came from crude oil.

* In 1900 American farmers needed an average of about three minutes’ labor to produce 1kg of wheat, but by the year 2000 the time was down to just two seconds and the best producers now do it in one second.

* The second most voluminous non-fuel use of a refined petroleum product is asphalt.

* Only about 20% of diamonds are sold to the jewellery trade; most of the rest go into drilling for hydrocarbons and metallic ores.

* Record US well depths reached with rotary rigs increased from 300m in 1895 to more than 1.5km by 1916; the 3km mark was reached in 1930, the deepest pre-WWII well was 4.5km (in 1938) and the 6km mark was surpassed in 1950.

* The average depth of new US exploratory oil wells increased from about 1,460m during the 1950s to nearly 2,300m during the first decade of the twenty-first century.

* Fracking fluid is about 90% water. Most of the rest is sand, and additives (hundreds of substances have been tried) usually make up less than 0.5% of the volume but they contain a mix of chemicals (acids, corrosion inhibitors, gelling agents, surfactants, biocides) that should never be allowed to contaminate drinking water. Usually this is not a problem as fracking takes place far below the aquifers, and steel and cement in properly finished wells should prevent any contamination closer to the surface.

* Moving Alaskan oil 3,800km by tanker from Valdez to Long Beach in California requires energy equivalent to only about 0.5% of the transported fuel. And a 300,000dwt supertanker needs an equivalent of only about 1% of the fuel it carries in order to travel more than 15,000km from Ra’s Tanūra, the world’s largest loading oil terminal on the Saudi coast of the Persian Gulf, to the US East Coast.

* By far the largest oil storage is the US Strategic Petroleum Reserve that began to fill in 1977 with imported Saudi oil. Crude oil is stored deep underground in four massive salt caverns along the Texas and Louisiana Gulf Coast. The maximum capacity is 713.5Mb and the reserves stood at 685Mb in June 2017, representing about 10% of US annual oil consumption.

* The chances of ending the fossil fuel era in a matter of two or three decades appear quite unrealistic: in 2017 the world derived about 85% of its primary commercial energy from the combustion of fossil carbon.

How the World Really Works: The Science Behind How We Got Here and Where We’re Going

Notes from How the World Really Works: The Science Behind How We Got Here and Where We’re Going (2022), by Vaclav Smil:

* Since the year 2007, more than half of humanity has lived in cities (more than 80 percent in all affluent countries), and unlike in the industrializing cities of the 19th and early 20th centuries, jobs in modern urban areas are largely in services. Most modern urbanites are thus disconnected not only from the ways we produce our food but also from the ways we build our machines and devices, and the growing mechanization of all productive activity means that only a very small share of the global population now engages in delivering civilization’s energy and the materials that comprise our modern world.

* The proverbial best minds do not go into soil science and do not try their hand at making better cement; instead they are attracted to dealing with disembodied information, now just streams of electrons in myriads of microdevices. From lawyers and economists to code writers and money managers, their disproportionately high rewards are for work completely removed from the material realities of life on earth.

* The real wrench in the works: we are a fossil-fueled civilization whose technical and scientific advances, quality of life, and prosperity rest on the combustion of huge quantities of fossil carbon, and we cannot simply walk away from this critical determinant of our fortunes in a few decades, never mind years. Complete decarbonization of the global economy by 2050 is now conceivable only at the cost of unthinkable global economic retreat, or as a result of extraordinarily rapid transformations relying on near-miraculous technical advances.

* Most recently, a poor understanding of energy has the proponents of a new green world naively calling for a near-instant shift from abominable, polluting, and finite fossil fuels to superior, green and ever-renewable solar electricity.

* Even in this era of high-tech electronic miracles, it is still impossible to store electricity affordably in quantities sufficient to meet the demand of a medium-sized city (500,000 people) for only a week or two, or to supply a megacity (more than 10 million people) for just half a day.

* If the COVID-19 pandemic brought disruption, anguish, and unavoidable deaths, those effects would be minor compared to having just a few days of a severely reduced electricity supply in any densely populated region, and if prolonged for weeks nationwide it would be a catastrophic event with unprecedented consequences.

* The fundamental energy conversion producing our food has not changed: as always, we are eating, whether directly as plant foods or indirectly as animal foodstuffs, products of photosynthesis—the biosphere’s most important energy conversion, powered by solar radiation. What has changed is the intensity of our crop, and animal, production: we could not harvest such abundance, and in such a highly predictable manner, without the still-rising inputs of fossil fuels and electricity.

* Many people nowadays admiringly quote the performance gains of modern computing (“so much data”) or telecommunication (“so much cheaper”)—but what about harvests? In two centuries, the human labor to produce a kilogram of American wheat was reduced from 10 minutes to less than two seconds.

* The quest for mass-scale veganism is doomed to fail. Eating meat has been as significant a component of our evolutionary heritage as our large brains (which evolved partly because of meat eating), bipedalism, and symbolic language. All our hominin ancestors were omnivorous, as are both species of chimpanzees (Pan troglodytes and Pan paniscus), the hominins closest to us in their genetic makeup; they supplement their plant diet by hunting (and sharing) small monkeys, wild pigs, and tortoises. Full expression of human growth potential on a population basis can take place only when diets in childhood and adolescence contain sufficient quantities of animal protein, first in milk and later in other dairy products, eggs, and meat: rising post-1950 body heights in Japan, South Korea, and China, as a result of increased intake of animal products, are unmistakable testimonies to this reality.

“Any fool can make a fortune. It takes a man of brains to hold on to it after it is made.”

Arthur T. Vanderbilt II, quoted in Fortune’s Children: The Fall of the House of Vanderbilt:

Within thirty years after the death of Commodore Vanderbilt in 1877, no member of his family was among the richest people in the United States, having been supplanted by such new titans as Rockefeller, Carnegie, Frick, and Ford. Forty-eight years after his death, one of his direct descendants died penniless. Within seventy years of his death, the last of the great Vanderbilt mansions on Fifth Avenue had made way for modern office buildings. When 120 of the Commodore’s descendants gathered at Vanderbilt University in 1973 for the first family reunion, there was not a millionaire among them.

“Any fool can make a fortune,” the Commodore had told his son William, whom he still called Billy, shortly before he died. “It takes a man of brains to hold on to it after it is made.”

“Mr. Market is there to serve you, not to guide you.”

Warren Buffett, writing in his 1987 letter to Berkshire Hathaway shareholders:

Ben Graham, my friend and teacher, long ago described the mental attitude toward market fluctuations that I believe to be most conducive to investment success. He said that you should imagine market quotations as coming from a remarkably accommodating fellow named Mr. Market who is your partner in a private business. Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell you his.

Even though the business that the two of you own may have economic characteristics that are stable, Mr. Market’s quotations will be anything but. For, sad to say, the poor fellow has incurable emotional problems. At times he feels euphoric and can see only the favorable factors affecting the business. When in that mood, he names a very high buy-sell price because he fears that you will snap up his interest and rob him of imminent gains. At other times he is depressed and can see nothing but trouble ahead for both the business and the world. On these occasions he will name a very low price, since he is terrified that you will unload your interest on him.

Mr. Market has another endearing characteristic: He doesn’t mind being ignored. If his quotation is uninteresting to you today, he will be back with a new one tomorrow. Transactions are strictly at your option. Under these conditions, the more manic-depressive his behavior, the better for you.

But, like Cinderella at the ball, you must heed one warning or everything will turn into pumpkins and mice: Mr. Market is there to serve you, not to guide you. It is his pocketbook, not his wisdom, that you will find useful. If he shows up someday in a particularly foolish mood, you are free to either ignore him or to take advantage of him, but it will be disastrous if you fall under his influence. Indeed, if you aren’t certain that you understand and can value your business far better than Mr. Market, you don’t belong in the game. As they say in poker, “If you’ve been in the game 30 minutes and you don’t know who the patsy is, you’re the patsy.”

Ben’s Mr. Market allegory may seem out-of-date in today’s investment world, in which most professionals and academicians talk of efficient markets, dynamic hedging and betas. Their interest in such matters is understandable, since techniques shrouded in mystery clearly have value to the purveyor of investment advice. After all, what witch doctor has ever achieved fame and fortune by simply advising “Take two aspirins?”

The value of market esoterica to the consumer of investment advice is a different story. In my opinion, investment success will not be produced by arcane formulae, computer programs or signals flashed by the price behavior of stocks and markets. Rather an investor will succeed by coupling good business judgment with an ability to insulate his thoughts and behavior from the super-contagious emotions that swirl about the marketplace. In my own efforts to stay insulated, I have found it highly useful to keep Ben’s Mr. Market concept firmly in mind.

“Politics is that dimension of social life in which things really do become true if enough people believe them.”

David Graeber, 2008:

It is the peculiar feature of political life that within it, behavior that could only otherwise be considered insane is perfectly effective. If you managed to convince everyone on earth that you can breathe under water, it won’t make any difference: if you try it, you will still drown. On the other hand, if you could convince everyone in the entire world that you were King of France, then you would actually be the King of France. (In fact, it would probably work just to convince a substantial portion of the French civil service and military.)

This is the essence of politics. Politics is that dimension of social life in which things really do become true if enough people believe them. The problem is that in order to play the game effectively, one can never acknowledge its essence. No king would openly admit he is king just because people think he is. Political power has to be constantly recreated by persuading others to recognize one’s power; to do so, one pretty much invariably has to convince them that one’s power has some basis other than their recognition. That basis may be almost anything—divine grace, character, genealogy, national destiny. But “make me your leader because if you do, I will be your leader” is not in itself a particularly compelling argument.

In this sense politics is very similar to magic, which in most times and places—as I discovered in Madagascar—is simultaneously recognized as something that works because people believe that it works; but also, that only works because people do not believe it works only because people believe it works. For this why magic, whether in ancient Thessaly or the contemporary Trobriand Islands, always seems to dwell in an uncertain territory somewhere between poetic expression and outright fraud. And of course the same can usually be said of politics.

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“There is no excuse to persist in irresponsible spending.”

The Rational Walk, 2024:

Compound interest is merely one example of an exponential function. Human beings have great trouble thinking in exponential terms. It is far easier to think in linear terms and, because this is our natural instinct, most people vastly underestimate the power of investing over a long lifetime. Compounding takes a long period of time to work its magic and we live in a society that prizes instant gratification above all else.

Part of getting older is gaining insight into the reality that living a good life has far more to do with factors such as health and family that simply cannot be purchased with money. However, money is definitely a prerequisite for living a secure life. Since poverty almost always guarantees misery and since anyone in the middle class or higher can easily attain financial independence over a lifetime, there is no excuse to persist in irresponsible spending. Your future self will thank your present self for being prudent and sensible.