In today’s fast-paced, constantly changing world, human financial advisors can offer what robo-advisors cannot: first-hand experience delivered with a human touch. At The Spaventa Group, our veteran financial advisors have decades of experience navigating challenging and shifting markets, and we welcome the opportunity to partner with investors like yourself.
Johannes Gutenberg had an unusual career for a Medieval-era European. Born to a wealthy patrician family in the city of Mainz at the turn of the 15th century, Gutenberg would have—in the normal course of events and like most children of high birth—inherited his father’s post as the manager of the Mainz mint.
But after an uprising against the patrician class in 1411, Gutenberg’s family was exiled from Mainz, so they crossed the Rhine river, headed about 10 miles east, and re-settled in the town of Eltville am Rhein, where Gutenberg’s mother had a family estate.
Details on Gutenberg’s life for the next 15 years are scant, but there is evidence that he later enrolled at the University of Erfurt. He then moved to Strasbourg and found employment in the skilled trades, first as a goldsmith in the city’s militia and later as a gem polisher.
In 1439, Gutenberg began working as an inventor. He noticed that there was a steady stream of religious pilgrims who passed through Strasbourg on the way to Aachen—then the unofficial capital of the Holy Roman Empire—and decided to take advantage of the opportunity by selling handheld mirrors to the crowd.
Unfortunately, these polished mirrors, which were “believed to capture holy light from religious relics”, ended up being both a practical and financial failure, so Gutenberg had to start from scratch.
The Printing Press and the Birth of the Industrial Revolution
The following year, Gutenberg published an obscure book called Aventur und Kunst (translated as Enterprise and Art in English). In it, he claimed to have perfected the art of printing, though it is unclear how his prototype worked—or if he had one at all.
By 1450, however, it was clear that Gutenberg did have a fully-operational printing press. He moved back to Mainz, partnered up with his brother-in-law, and began producing copper engravings, which he used to print playing cards.
But Gutenberg had loftier ambitions. Seeking to expand his operation, Gutenberg convinced a wealthy Mainz lawyer and businessman named Johann Fust to lend him 800 guilders—first in 1450 and again in 1452—which he used to print 180 Bibles and thousands of indulgences for the Catholic Church.
When Pope Pius II came across Gutenberg’s printing press in 1455, he remarked about the quality of his printed works, noting in a letter to Spanish cardinal Juan Carvajal: “What was written to me about that marvelous man [Gutenberg] seen at Frankfurt [is] entirely true…The script is extremely neat and legible, not at all difficult to follow. [You] would be able to read it without effort, and indeed without glasses.”
The Printing Revolution and the Dawn of the Industrial Revolution
The Gutenberg Bible marked the first instance in human history where a major book was mass-produced using movable metal type.
Following Gutenberg’s success, printing presses began to spread rapidly throughout Europe. According to an estimate by University of Michigan history professor Elizabeth Eisenstein, “by 1500, 1,000 printing presses were in operation throughout Western Europe and had produced 8 million books.”
In contrast, research from the Harry Ransom Center at the University of Texas at Austin notes that there were a mere 30,000 books in the whole of Europe prior to the invention of the printing press.
By the end of the 16th century—roughly 150 years after Gutenberg’s Bibles first rolled off his press—Europe alone had produced in excess of 200 million printed books.
Known today as the Printing Revolution, this explosion in printed materials led to the rapid democratization of knowledge and diffusion of ideas across Europe. Written information, once reserved for the privileged few, suddenly became available to ordinary people.
Authors gained credibility, literacy rates skyrocketed, and new ideas—everything from calculus and ethics to double-entry bookkeeping and even political treatises that set the American Revolution in motion—spread across the world.
The Birth of Automation: Control Devices and Spinning Mills
This collision of scientific progress, political change, and economic productivity soon made Europe and its colonies fertile ground for an even more dramatic sort of revolution—one that would transform the agrarian world into an industrial one.
Primitive control devices began appearing in the early 17th century. First was the temperature regulator, which was invented by Cornelis Drebbel in 1624. Next came Denis Papin’s pressure valve, which he unveiled in 1681.
Then, on July 2nd, 1698, English engineer Thomas Savery patented the first steam engine, a pistonless pump that could raise “water and occasion[] motion to all sorts of mill work by the impellent force of fire”.
Within three-quarters of a century, control devices and engines were being combined into one. In 1769, English inventor Richard Arkwright invented the first fully-automated spinning wheel, calling it the water frame. Essentially a combination of James Hargreaves’ spinning jenny—invented five years prior—and a water wheel, the device was capable of spinning 96 threads at a time, which was then an all-time record.
Arkwright quickly scaled up production of his water frame. In 1771, he built a water-powered mill in the village of Cromford and put the technology to use, employing 200 semi-skilled workers—most of them children and some as young as seven—as loom operators.
The (New and Improved) Steam Engine
Then, in 1788, James Watt pioneered his version of the steam engine. Dramatically more efficient than its predecessors, Watt’s device could also do something earlier steam engines couldn’t do: provide rotary power.
As a result, steam engines soon replaced water wheels as the primary source of power in nearly every industrial establishment imaginable—from spinning mills and sawmills to cotton mills and mines.
Because factories could now be powered without running water, they could be located away from riverbanks and towards more strategic locations. This enabled entrepreneurial industrialists to establish manufacturing facilities closer to sources of raw materials, which were usually located further inland.
Regardless of where a new factory popped up, however, the story remained much the same for its rank-and-file employees. Low wages were common, as was the use of child labor. Highly structured work schedules were the norm, as was the requirement that one perform routinely hazardous and occasionally life-threatening labor.
A 1960 publication by Bureau of Labor Statistics economist Stanley Lebergott estimates, for instance, that workers at American textile mills in the 1830s earned between 30 and 50 cents for a day’s worth of work—a mere inflation-adjusted $9 to $16.50 per day for what was likely a grueling and mind-numbing 12-hour shift.
The Later Industrial Revolution: Trains, Telegraphy, and Telephones
Beyond industrial plants (and their woeful working conditions), steam engines also found their way abroad passenger vehicles. Steam-powered wagons replaced horse-drawn carriages, steamboats replaced sailboats, and locomotives sprung into existence.
In 1802, British mining engineer Richard Trevithick patented a “High Pressure Tram-Engine” that could carry “ten tons of iron, five wagons, and 70 men…above 9 miles…in 4 hours and 5 [minutes].”
Britain and the rest of the industrialized world quickly embraced trains. In 1825, the 26-mile-long Stockton and Darlington railroad—the United Kingdom’s first—opened for business. Within a year and a half of its debut, it was ferrying more than 40,000 passengers annually between the industrial town of Darlington and coal mines in Shildon.
By 1850, there were over 3,000 miles of railroad track in Great Britain and more than 9,000 miles of track in the United States.
At around the same time, two inventions that would radically reshape long-distance communication began taking shape.
The first was the telegraph. Pioneered by inventors like Francis Ronalds, Charles Wheatstone, and later Samuel Morse, the device allowed people to relay short messages across long distances (which eventually even spanned the Atlantic Ocean) at the speed of light.
Later, Alexander Graham Bell’s telephone—which he received a patent for on March 7th, 1876—allowed people to communicate synchronously using the spoken word. Suffice to say, this was a notable improvement over the considerably lower-bandwidth Morse code that telegraph operators were accustomed to using.
The Internal Combustion Engine, Electrification, and More
Around this time, another invention was taking shape—one that would overhaul the then-ubiquitous steam engine.
In 1872, American mechanical engineer George Brayton invented the internal combustion engine. Unlike the steam engine—which burned fuel (mainly coal) to heat water into steam, and then converted the steam into mechanical energy—the internal combustion engine created mechanical energy by burning fuel inside a combustion chamber.
Because internal combustion engines bypassed the need for a secondary fluid (i.e. water), they were far more powerful and efficient than their steam engine counterparts, making them suitable for powering automobiles, aircraft, and other heavy-duty craft.
The late 19th and early 20th centuries also marked the beginning of widespread electrification. In its earliest days, electricity was mainly used for lighting.
But by 1925, half of all homes in the United States were electrified—a figure that rose to 85% by 1945 and virtually 100% by 1960. As electrification shifted from being a rare luxury to a universal commodity, its uses ballooned.
Soon, electric appliances like refrigerators, washing machines, vacuum cleaners, televisions, clocks, and radios found themselves in American homes. Though it is easy to downplay and overlook the importance of these now-ubiquitous devices, their impact cannot be understated.
Before electrification, running water, and the washing machine, one load of laundry took a householder around four hours of work to do. Today, the chore takes roughly 41 minutes—and even then, the task’s most manual and strenuous parts have already been automated away by the machine’s pre-programmed wash and dry cycles.
Automation in the Later 20th and Early 21st Centuries
This trend towards ever-increasing automation (and energy use) continued to accelerate throughout the latter half of the 20th century.
The development of computing in the post-war era made it possible to perform complex calculations in an instant, and later developments in graphics-based operating systems and personal computing made computers more affordable and user-friendly than ever before.
In 1984, for instance, 8.4% of American households owned a computer. By 1990, this figure was at 15%. By 2000, 51% of U.S. households had a computer, and more than 40% of the country’s population was online.
Today, tasks once thought to be too complex to be performed by a machine are at the precipice of being automated away. From self-driving cars and “lights-out” factories to robo-advisors and generative artificial intelligence (AI) technologies, there’s evidence to suggest that the rate of technological progress is accelerating.
While it’s difficult to predict what the future will hold, one thing is certain: expect even the near future to be unrecognizable from today.
In today’s fast-paced, constantly changing world, human financial advisors can offer what robo-advisors cannot: first-hand experience delivered with a human touch.
At The Spaventa Group, our veteran financial advisors have decades of experience navigating challenging and shifting markets, and we welcome the opportunity to partner with investors like yourself.
Get in touch with us today to see how we can help you exceed your financial goals.
