Thermodynamics, evolution, wealth and happiness

If I was to say to you that there's a fundamental foundation that links life, physics, wealth, happiness and effort, would you;
a) yawn?
b) laugh?
c) sit up and listen?

If c, read on. Recent reading and thinking has led me to the following conclusion;

Firstly, that the first and second law of thermodynamics hold the keys to the meaning of life. And secondly, progress and wealth are underpinned by an evolutionary mechanism that is universal.

Come again?

I guess I'll need to explain in more detail. I'm not sure I can do it in a single blog post, so bear with me as I  fire up a few synapses.

The first law of thermodynamics expresses that energy can be transformed, i.e. changed from one form to another, but cannot be created nor destroyed.

The second law of thermodynamics is an expression of the tendency that over time, differences in temperature, pressure, and chemical potential equilibrate in an isolated physical system.

i.e. - the universe has a finite amount of energy, the universe is an isolated physical system and energy will level out in this system.

The levelling out process is called entropy.  In it's most general sense one can regard entropy as the general decay that surrounds us.  A new car will eventually rust, a building will need new paint, food will rot, people grow old and stuff just generally falls apart.  New life however is sustained by the sun which provides energy for living creatures.

Life requires continued energy to be sustained otherwise it fades and dies. To stay alive, we need to eat and sleep.  (Doing nothing is not an option).  There's a certain amount of energy required to stay where we are; we have to keep walking forward to stand still.  Every day we need our 2 or 3 thousand calories of energy, we need to rejuvenate with our sleep.

If we do more than just stand still it requires effort.  If you want to be wealthy, it requires effort.  If you want to have a family and prolong your gene-pool, it requires effort.  There's effort required to stand still and yet more effort to more forward.

The effect of all of this extra effort is a temporary suspension of entropy.

We strive against a tide of entropy that surrounds us and the efforts we all make on a daily basis help drive humanity forward.  We have an inner drive and purpose to temporarily suspend entropy.  This drive, this striving, is the essence of life.  It gives us satisfaction, it gives us meaning and it gives us value.  I would even go so far as to suggest that it is the source of our happiness.

When considering the business landscape, you could see it in this way: businesses competing to create business models that temporarily deliver additional value.  Over time, new business models become the norm, become commoditised and so companies need to innovate (strive) to do more than stand still.  Those that succeed create wealth, those that don't decay and die.

Behind both humanity and business is a common evolutionary algorithm.  This evolutionary algorithm is a method to uncover (not by pre-determined means, but by trial and error), organism designs and business plan designs that are optimal for the environment in which they find themselves.

To make sense of life and to make sense of business, you could like me take the following view;

1. We are part of the fabric of life itself, iterations of the human species that are being continuously tweaked to be optimised for the environment we find ourselves in by an evolutionary method

2. We derive satisfaction (value) by striving to do more than to stand still and to suspend entropy as best we can

3. Businesses work by the same means, combining previous business knowledge into new business designs that can temporarily beat the competition (suspend entropy) and create value.  To win they must continuously innovate and embrace evolutionary methods in their architecture.

The laws of thermodynamics, together with an evolutionary mechanic are foundational in understanding the human need to strive and the business need to innovate.  One delivers satisfaction and happiness, the other value and wealth.  Businesses are but collections of humans so this should be no surprise.

If you are still reading this and wonder what I'm on to deliver such a stream of consciousness, there's two things you should know.  I once studied Theology and Religious Studies at University (but am currently an atheist) and that I've recently read "The Origin of Wealth" by Eric Beinhocker.  If you get a chance do read Beinhocker, it will help develop the thinking that I've scraped the surface of here.

Learn Something New Every Day

You learn something new every day, so goes the saying.

We all have different things that make us "tick". For me, one of the strongest motivators is learning something new, either through experience or through reading.

Here's a little snippet I picked up yesterday. I was reading Peter Hargreave's book "In For A Penny", the story of how he and his business partner built up their business from scratch starting with just a telephone and a desk in a spare bedroom. Now the business (Hargeaves Lansdown) is one of the biggest financial services firms in the UK and is a listed public company.

Aside from picking up on their business principles (best service, best prices, best information), their company culture (put the customer first, the company second, yourself third), and their innovative real time trading platform for private investors, one little snippet of trivia grabbed my attention.

When you come to cash in your pension on retirement, one option is to buy an annuity with your pension fund (I knew that already by the way). This annuity is a fixed regular payment that you receive for the rest of your life. The life companies that sell these policies assess your risk profile. High risk, you can buy less income with your money, low risk, you can buy more.

The interesting thing is that the more money you have in your pension, the more risky you are to a life company. Why? Well it seems statistically that people with more money live longer. Maybe this is because they can afford a better lifestyle and health care, I'm not sure. As they live longer, then the life company has to pay out the fixed sum for longer, so therefore large pension fund owners will find it more difficult to get a better deal.

I thought about this for a moment on the train. First of all, I was disappointed that if I did make the effort to save harder, I would get a worse deal. However the upside is much more interesting; work hard to accumulate a bigger pot and you might live longer. I'd never thought of life expectancy as a reason to work hard, but there it is.

But how to be successful? One of the other books I read recently was Malcolm Gladwell's book "Outliers". Here he looks at the truly successful people in their fields and looked at what patterns stood out.

It seems that you need "enough" education (not necessarily the best), "enough" talent (pure talent will not cut it on it's own), fortunate circumstances (luck), and the most important two ingredients of all: focus and effort.

This was encouraging. I'm a great believer in making your own luck. Work hard, see obstacles as opportunities and take control of your own destiny. Sure, life throws you a deck of cards, but even with an average hand you can play a good game.

Learning is great, and knowledge is best enjoyed if shared. Therefore at work recently I took the initiative to start a library. The two books I mentioned above plus another twenty or thirty from my personal bookshelves start the library stock. I've asked colleagues to also bring in their books to loan to the collection. I've bought library cards to put in the front of each book and developed a system for withdrawals and returns. I hope it takes off. I'm looking forward to sharing ideas and seeing the team grow through learning.

Learn something new every day. My new mantra.