People are reasonably good at estimating how things add up, but for compounding, which involved repeated multiplication, we fail to appreciate how quickly things grow.
Interpretation
Compounding can lead to significant growth over time, yet people often underestimate this concept.
The quote by Paul Romer highlights the human tendency to grasp basic arithmetic but struggle with the exponential nature of compounding. While we can understand addition and the incremental changes it brings, compounding, which multiplies values over time, has a much more dramatic effect that is often overlooked in our calculations and future projections.
In practice
In a financial literacy workshop to explain the benefits of investing early.
When somebody discovers something like the quadratic formula or the Pythagorean theorem, the convention in science is that he can't control that idea. He has to give it away. He publishes it. What's rewarded in science is dissemination of ideas.
An economy can survive with 10% of the population insolation. It can't survive when 50% of the population is in isolation.
One of the most powerful insights in economics is this idea of a division of labor. You do the thing you're good at. Other people do something else that they're good at. The net effect is better for everybody.
Human material existence is limited by ideas, not stuff, people don't need copper wires they need ways to communicate, oil was a contaminant, then it became a fuel
It is the job of government to prevent a tragedy of the commons. That includes the commons of shared values and norms on which democracy depends.
In the developing world, most people don't yet live in big well-run cities. Given the chance to move to one, hundreds of millions of people would go there to get a job, get an education for their children, and live in a place that is clean, safe, and healthy.
Those who gave thee a body, furnished it with weakness; but He who gave thee Soul, armed thee with resolution. Employ it, and thou art wise; be wise and thou art happy.
Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.
We have to choose between what is right, and what is easy.
It is more difficult to rule yourself than to rule a city.
Intelligence must follow faith, never precede it, and never destroy it.
It's easy to pretend expertise when there's no data to contradict you.
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