250 Years Like No Other
- Jul 18
- 5 min read
The Royal Swedish Academy of Sciences press release naming the laureates for the 2025 Nobel Prize in Economic Sciences1 hit on several notions that we have written about over the years. (Bold and underlined font below is our emphasis.)
“Over the last two centuries, for the first time in history, the world has seen sustained economic growth. This has lifted vast numbers of people out of poverty and laid the foundation of our prosperity.”
“Technology advances rapidly and affects us all, with new products and production methods replacing old ones in a never-ending cycle. This is the basis for sustained economic growth, which results in a better standard of living, health and quality of life for people around the globe.”
“However, this was not always the case. Quite the opposite – stagnation was the norm throughout most of human history. Despite important discoveries now and again, which sometimes led to improved living conditions and higher incomes, growth always eventually levelled off.”1
The central thesis of 2025 laureates Philippe Aghion and Peter Howitt states that more new jobs have been created by technological advancements than were lost. The laureates’ work describes “sustained growth through creative destruction.” Each major technological advancement comes with doomsday forecasts, which often correctly predict some elements of ensuing disruption to existing industries.2 To paraphrase what we heard Warren Buffett say, “It was no fun being a plow horse when the tractor came along,” while failing to anticipate the generative aspects of the new ways.
Arguably, how governments and societies adopt technological advancement has been instrumental in the creation of global superpowers. The four major industrial revolutions, starting in the latter 1700s, help us see what we have been experiencing with the advent of the internet and the future concerns about AI obviating jobs and businesses are par for the course. With the first industrial revolution, European societies shifted from a handcraft and agrarian orientation to one dominated by mechanical processes and industrialization. During this time England became a global superpower while France did not. The 2025 laureate Joel Mokyr noted the skyrocketing number of new scientific publications that were started during this phase of the French Enlightenment; however, we understand that the French government decided on a deliberate and controlled transformation to smooth the disruption to jobs of its citizens.
As shown in the juxtaposition of the following two charts, while the number of new scientific publications was skyrocketing in Europe, the number of instrument makers was skyrocketing in England but not in France.2
The English government embraced the changes in a fashion that was far more capitalistic than France and had much more internal strife for a period because of the rapid transformation.2 The Luddite riots in England were emblematic of the strife and turmoil, for those who would like to delve deeper.
Indeed, it is important to remember that the Founding Fathers thought of the United States as an experiment in self-governing constitutional democracy, so innovation is central to our DNA. The United States is the most fertile ground for the most influential people in the world, and a perhaps surprising number of them are first generation or second generation legal immigrants, such as Nvidia’s Jensen Huang. We believe that, worldwide, the largest influence on the last century of unprecedented global growth that has lifted billions of people out of poverty and reduced food insecurity through transportation, electrification, refrigeration, etc. was the American Spirit, which inspired and fostered levels of innovation in the United States which were applied around the globe and far exceeded contributions from the rest of the world.
AI sits at the cusp of the next major global technological transformation, and as before, while it is easy to imagine the destructive aspects of AI, we believe it will ultimately be a positive that helps sustain growth and wellbeing, often in unpredictable ways. We were recently surprised to see a chart created by Deutsche Bank of steadily increasing numbers of job listings for software engineers over the last year while total job listings steadily decreased, which runs counter to common notions about AI. We believe the United States sits at the center of global AI development and, true to form, has invested far more into AI development than the rest of the world combined.3
As investors, our job is to formulate investment theses in the midst of a period of creative destruction. As Ben Graham wrote, “In the short run, the stock market is a voting machine. But in the long run, it is a weighing machine.”4 Recently, the market has been voting heavily in favor of AI-related stocks, and it seems to us the market has not given much credence to the long-term weight of value that will be created. The internet boom led to the market voting heavily in favor of the tech heavy NASDAQ at the start of the internet boom, yet from the peak in early 2000 it took nearly 15 years for the NASDAQ to return to those levels after the actual value created by the internet boom was weighed. Our investment analysis focuses much more on anticipating the long-term weight of value created than on anticipating voting patterns within the market. More concentrated market voting often requires more patience with long-term investment theses.
As we look back on the last 250 years and look forward as far as our eyes can see, there is a very important message that we believe all should keep in mind. The last two centuries were the exception. Continued economic and quality of life improvements will only be possible if the American Spirit is kept alive.
3https://www.dbresearch.com/PROD/IE-PROD/PDFVIEWER.calias?pdfViewerPdfUrl=PROD0000000000631547&rwnode=REPORT
Redmond Asset Management, LLC July 2026
The opinions contained in the preceding commentary reflect those of Redmond Asset Management, LLC (RAM). The stated opinions are for general information only and are not meant to be predictions or an offer of individual or personalized investment advice. They also are not intended as an offer or solicitation with respect to the purchase or sale of any security. This information and these opinions are subject to change without notice. Any type of investing involves risk and there are no guarantees. Redmond Asset Management, LLC does not assume liability for any loss which may result from the reliance by any person upon any such information or opinions.
Redmond Asset Management, LLC (RAM) is an independent, SEC registered investment management firm located in Richmond, VA and is not affiliated with any parent organization. RAM was founded in 2005 and registered with the SEC on December 22, 2005. The company offers investment management services for equity, balanced and fixed income portfolios to corporate, institutional, and individual investors.
