‘It should be remembered, that in few departments have important reforms been effected by those trained up in practical familiarity with their details. The men to detect blemishes and defects are among those who have not, by long familiarity, been made insensible to them.’
And it inspired competitors – notably Sears Roebuck, which soon became the market leader. (The story goes that the Sears Roebuck catalogue had slightly smaller pages than Montgomery Ward’s – with the intention that a tidy-minded housewife would naturally stack the two with the Sears catalogue on top.)
By the century’s end, mail-order companies were bringing in $30 million a year – a billion-dollar business in today’s terms; in the next twenty years, that figure grew almost twenty-fold. The popularity of mail order helped fuel demands to improve the postal service in the countryside – if you lived in a city, you’d get letters delivered to your door, but rural dwellers had to schlep to their nearest post office.
What Palchinsky realised was that most real-world problems are more complex than we think. They have a human dimension, a local dimension, and are likely to change as circumstances change. His method for dealing with this could be summarised as three ‘Palchinsky principles’: first, seek out new ideas an try new things; second, when trying something new, do it on a scale where failure is survivable; third, seek out feedback and learn from your mistakes as you go along. The first principle could simply be expressed as ‘variation’; the third as ‘selection’.
A second, ironic, problem is that companies fear that if they produce a truly vital technology, governments will lean on them to relinquish their patent rights or slash prices. This was the fate of Bayer, the manufacturer of the anthrax treatment Cipro, when an unknown terrorist began mailing anthrax spores in late 2001, killing five people. Four years later, as anxiety grew about an epidemic of bird flu in humans, the owner of the patent on Tamiflu, Roche, agreed to license production of the drug after very similar pressure from governments across the world. It is quite obvious why governments have scant respect for patients in true emergencies. Still, if everybody knows that governments will ignore patents when innovations are most vital, it is not clear why anyone expects the patent system to encourage vital innovations.
What is more, the effect was large: groups that has to accommodate an outsider were substantially more likely to reach the correct conclusion — they did so 75 per cent of the time, versus 54 per cent for a homogeneous group and 44 per cent for an individual.
It’s fun to speculate about what those inventions might be, but history cautions against placing much faith in futurology. Fifty years ago, Herman Kahn and Anthony J. Wiener published The Year 2000: A Framework For Speculation. Their crystal-ball gazing got a lot right about information and communication technology. They predicted colour photocopying, multiple uses for lasers, ‘two-way pocket phones’ and automated real-time banking. That’s impressive. But Kahn and Wiener also predicted undersea colonies, silent helicopter-taxis and cities lit by artificial moons. Nothing looks more dated than yesterday’s technology shows and yesterday’s science fiction.
Excerpt from: Fifty Things that Made the Modern Economy by Tim Harford