The recent hubbub around Mr. Munger's thoughts* on investing, shared at the Daily Journal Corporation where he serves as Chairman brought to mind this story by Bill and Cole Smead of Smead Capital Management, writing at Advisor Perspectives, December 23, 2020:
....This reminds us of the summit held in 1898 by the city managers of London, New York and Paris. The biggest environmental problem was horse manure expelled from the animals. Here is how the writer, Eric Morris, explained this in his piece, From Horse Power to Horsepower:
In 1 8 9 8 , D E L E G A T E S F R O M A C R O S S T H E G L O B E gathered in New York City for the world’s first international urban planning conference. One topic dominated the discussion. It was not housing, land use, economic development, or infrastructure. The delegates were driven to desperation by horse manure. The horse was no newcomer on the urban scene. But by the late 1800s, the problem of horse pollution had reached unprecedented heights. The growth in the horse population was outstripping even the rapid rise in the number of human city dwellers. American cities were drowning in horse manure as well as other unpleasant byproducts of the era’s predominant mode of transportation: urine, flies, congestion, carcasses, and traffic accidents. Widespread cruelty to horses was a form of environmental degradation as well. The situation seemed dire. In 1894, the Times of London estimated that by 1950 every street in the city would be buried nine feet deep in horse manure. One New York prognosticator of the 1890s concluded that by 1930 the horse droppings would rise to Manhattan’s third-story windows. A public health and sanitation crisis of almost unimaginable dimensions loomed.
The technology which solved that great environmental problem in the early 1900s is the one which created today’s environmental problem, the internal combustion engine. Munger would argue that something in new technology will come along by virtue of a profit seeking capitalist (think Henry Ford or Elon Musk) and solve the problem. Charlie said the academics “think more and more about less and less”, and must realize that electricity is created from something and most of the ways it was created in the past have been rejected (hydro, nuclear, coal)...
One of the most profound observations made by historian Frederick Lewis Allen in Only Yesterday was the change in the sound of cities, specifically that we no longer hear horses clip-clopping along.
*e.g. Reuters, February 24:
Charlie Munger discusses many issues at Daily Journal annual meeting
Back in 2009 Charlie shared his thoughts on Cap-and-trade as a policy approach to controlling carbon dioxide emissions:
Berkshire Hathaway's Munger on Cap-and-Trade ("Monstrously Stupid Right Now...Almost Demented"); Warren and Charlie on Wind and Solar (BRK.A)
And I'd have to agree but for reasons that differ from Charlie's. The most efficient policy in terms of transparency and equitable distribution of the pain of higher prices is Tax-and-100% rebate, with no siphoning off of money to traders or politicians.
But of course there is no one in Brussels or Washington lobbying for such a thing.
