Upton Sinclair Lives!

 

Upton Sinclair was a well-known writer in the first half of the 20th century. He was a bit on the angry side but did famous exposes such as THE JUNGLE which frightened America as he wrote of unsanitary conditions in the meat processing business.

 

He lived to be 90 passing on in 1968. While largely forgotten today, he is often quoted but not credited with a very profound statement. Sinclair ran for governor of California with a left leaning platform at the bottom of the Great Depression. He got clobbered at the ballot box and wrote a book about his experience as a candidate the following year.

 

The insightful comment that I referred to above came from that book and is: “It is difficult to get a man to understand something, when his salary depends on not understanding it.”

 

Let it sink in a little bit. Over the last 50 years, I have seen it come to life dozens of times.

 

Here are some examples:

 

1)  Way back in the late 1970’s, I was invited to speak at a TV station on the future of cable TV advertising. I burned the midnight oils putting a deck of acetates together (these were the pre-power-point days) and gave what I believed to be an even-handed discussion of where TV advertising both local and national was heading. The first five minutes went well, then the audience became restless and finally they were openly hostile when the Question and Answer period began. The General Manager walked out and a few of the sales team told me that I wanted them to lose their jobs. I stuck to my narrative but, being young, I was a bit shaken.

2)  Fast forward to the late 90’s and I had similar experiences with audiences across conventional media types when the Internet took center stage. “This is just a passing fad; it will never get traction” were among the responses I received. Once, in the year 2000, I had to speak to a newspaper industry group and was candid about what I thought was an inevitable decline in readership and advertising revenue. An old man (far younger than I am now ) yelled out, “My great-father started our paper in 1886 and my grand-daughter will be running it forty years from now.” I had the same type of experiences with radio station salespeople and magazine sales managers and publishers.

3)  Social Media the last 15 years—Sinclair’s quote held true as people dismissed it as a flash in the pan.

4)  Streaming video—Netflix, Amazon Prime, Disney Plus, Hulu Plus and others were getting traction but some dinosaurs told me that once the conventional networks put out some better programs people would flock back to them. I countered gently, I thought, that once people get used to not seeing commercials it will be difficult for them to return full bore to advertiser supported television. Also, it will be difficult to introduce new products due to heavy advertiser avoidance. Existing brands could do line extensions and have great credibility and a huge advantage over new brands that did not have very deep pockets. Advertising, as we know it, will slowly die and something else would take its place. Few were buying although most would admit that streaming services were their go-to viewing option.

 

Is this phenomenon limited simply to media? Of course not!

 

A few examples:

 

1)  I just finished reading TRILLIONS by Robin Wigglesworth (Penguin Random House, 2021).  The author is a long-time correspondent for The Financial Times. It took a seemingly dry topic, the growth of Index Funds, and talked of the huge resistance the financial establishment put up against them. How could a passive investing approach beat the performance of a fund that is professionally managed? Well, Jack Bogle of Vanguard who did not invent but certainly popularized the Index Fund concept showed again and again that, over time, excessive costs from standard mutual funds or financial advisors would eat up a fair portion of one’s profits. An Index Fund charges very little so the overwhelming majority of your gains are yours to keep. Bogle told people not to try and pick the next Apple or Amazon. Do not look for the needle in the haystack, buy the whole haystack and, over the long term, you will almost always outperform a money manager. Yes, there are people such as Warren Buffett, Stan Drukenmiller, and Bill Miller who defied the odds but they are in a tiny minority. Today, most of the big investment houses have embraced Index Funds despite their initial hostile welcome.

2)  Autonomous vehicles—mention self-drive trucks or Ubers to people and some get furious. It can never happen is their response. Well, I am betting that it will as businesses have one cardinal rule—cut costs! Over the next couple of decades when the artificial intelligence gets better and better it will be safer to have autonomous vehicles on the road. Insurance costs will drop and employers will not have to pay their truck health care costs, unemployment insurance, social security taxes, etc. Now, I realize that consumers always lag technology so it will be a while for driver free trucks to dominate things. At the same time, a 25 year old today cannot expect a 35 year career as a truck driver. Also, robotics will be even bigger players in manufacturing and even service industries.

 

A lot has changed since the mid-1930’s when Sinclair penned his famous line. One thing has not changed—human nature! So people, even intelligent and rational ones, do not want to accept anything that can threaten their livelihoods.

 

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com or leave a comment on the blog.