The serendipitous path of history

The following is the conclusion of a speech delivered by David Eldon, Chairman of the Dubai International Financial Centre, and Senior Advisor, PricewaterhouseCoopers, at FundForum Asia, in Singapore, April 29, 2009. —ed.

At one of our board meetings, we were given a briefing by a historian named James Burke. His presentation was meant to reinforce to us all the difficulty of attempting to precisely predict the future. To illustrate this point, Mr. Burke walked us through a succession of historic developments. Developments which eventually led to a surprisingly conclusion. Let me warn you in advance, you will need to listen closely.

Mr. Burke began his story in the early 1700s. Amongst some small islands at the entrance of the English Channel. It was there that the then commander-in-chief of the British fleet, Sir Cloudesley Shovell, made a fatal mistake—a wrong right turn. A wrong right turn straight into some rocks which resulted in several ships sinking and thousands of men dying, including Sir Cloudesley.

As a result of this maritime disaster, and in keeping with certain colonial ambitions across the Atlantic, the British parliament decided to offer 20,000 pounds sterling to the first person to develop an accurate way of navigating at sea.

As a result of this significant prize, a clockmaker by the name of Benjamin Huntsman set out to find better steel for a clock-spring, since knowing precisely what time it is helps one know where they are in relation to their starting point.

As a result of the cast steel this clockmaker came up with, an English iron-maker named John Wilkinson was able to bore out thinner cannons, which were later sold to the French.

As a result of these light-weight cannons, a fellow by the name of Napoleon was able to develop a mobile artillery, win various battles and start an empire.

As a result of his success, the Emperor Napoleon set up a prize to encourage French inventors.

As a result of this prize, a French chef named Nicolas-Francois Appert came up with a way to preserve food in a bottle.

As a result of this innovative process, an English company was enticed to go to France to buy Mr. Appert’s patent, hoping to improve upon it by preserving food in metal cans instead of glass bottles.

As Mr. Burke’s story goes: during this trip to France, representatives of this English company noticed another French patent for a continuous-process paper-making technique. Another patent which they also decided to buy and try to improve upon.

As a result of their subsequent efforts, the first ever rolls of this [toilet paper] were produced.

The point Mr. Burke was making then is that no one could have ever predicted the toilet roll from even the most frightening of navigational problems. The point I want to leave you with today is that as you consider the various trends which influence your decisions—and try to separate the reality from the rhetoric—it is important to be mindful that the future is extremely difficult to precisely predict.

Indeed, the ultimate reality is that the future is never, ever close to a linear extension of the present. If it was we wouldn’t have any of these rolls at our disposal. Nor, might I add, would the prosperity have ended like it did.

Indeed, after my presentation is long gone and forgotten, I hope that this simple little object can do for you what it has done for me since I first heard the story from Mr. Burke.

Namely, provide you with a simple and easy-to-remember reminder that yes, shift happens.

On that note, I would like to open the floor to questions or comments. About the state of Asia. About the state of the financial industry. Even about so-called “Black Swans.” Or as I prefer to call them: “White Rolls.”