Capital Ideas: The Improbable Origins of Modern Wall Street
by Peter L. Bernstein · 19 Jun 2005 · 425pp · 122,223 words
getting wealth this is the most unnatural.” Aristotle goes on to tell the story of the philosopher Thales the Milesian, who developed a “financial device which involves a principle of universal application.” People had chided Thales because he was a poor man, taking his poverty as proof that philosophy is of no
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practical use. Thales knew what he was about, however, and set out to demonstrate the foolishness of this reproach
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. Thales had exceptional skill in reading the stars. One winter he foresaw that the autumn olive harvest would be much larger than normal. He took the little money he had saved up and paid quiet visits to all the owners of olive presses in the area, placing small
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he showed the world that philosophers can easily be rich if they like, but that their ambition is of another sort.” Aristotle’s anecdote about Thales and his financial device is the first recorded mention of the instrument that has come to be known as an option. An option is essentially
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do so. If the olive crop had turned out to be disappointing, Thales would have let his options lapse; he would have exercised them only if the crop had turned out to be great enough to overwhelm the olive-pressing capacity of the community. A 1688 treatise on the workings of the Amsterdam
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keeping the set on and accepting his punishment. A direct command to abandon the living room for the bedroom would not have been an option. Thales won out on his options because, as it turned out, he had a better idea than the press owners of how big the
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an almost endless variety of functions. Some people seek a high return; others hope to hedge their risks. Each group accommodates the other. People like Thales, who believe they know what the future holds, use options to speculate on the future; they are willing to run the risk of losing a
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for the insured amount. An option that gives the holder the right to acquire an asset is known as a call option. Thales bought a call option on the olive presses. A homeowner with a prepayment privilege on the family mortgage also has a call option, because the family has the right to
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, volatility matters a lot. The option-holder has a claim on which he can lose relatively little: Thales made only small deposits on the olive presses. But the option-holder can gain a great deal: Thales made a killing when the olive crop turned out to be unexpectedly large. This means that options are
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catastrophic illness. Investors who use options to hedge their risks will also be more eager to hedge big risks than small ones. If the olive harvest is about the same every year, there is little risk that press capacity and olive production will be badly matched. If the
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harvest is unexpectedly large, the olive grower will want to hedge against the possibility that he will have no access to the presses when his crop
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out to raise a mere $ 17 million—“hardly a smashing success,” as Merton admits.34 These disappointments aside, the three scholars at MIT had turned Thales’s financial device into an instrument of great power and overwhelming importance. Options enable investors to control risk and to shape the outcomes they face
A History of Western Philosophy
by Aaron Finkel · 21 Mar 1945 · 1,402pp · 369,528 words
. It is possible, however, to understand the development of Greece in scientific terms, and it is well worth while to do so. Philosophy begins with Thales, who, fortunately, can be dated by the fact that he predicted an eclipse which, according to the astronomers, occurred in the year 585 B.C
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, which enabled lunar eclipses to be predicted with certainty, and solar eclipses with some probability. This Babylonian knowledge, as we shall see, was acquired by Thales. The civilizations of Egypt and Mesopotamia were agricultural, and those of surrounding nations, at first, were pastoral. A new element came with the development of
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a way of life. CHAPTER II The Milesian School IN every history of philosophy for students, the first thing mentioned is that philosophy began with Thales, who said that everything is made of water. This is discouraging to the beginner, who is struggling—perhaps not very hard—to feel that respect
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for philosophy which the curriculum seems to expect. There is, however, ample reason to feel respect for Thales, though perhaps rather as a man of science than as a philosopher in the modern sense of the word
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. Thales was a native of Miletus, in Asia Minor, a flourishing commercial city, in which there was a large slave population, and a bitter class struggle
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the open spaces of the city with live torches.”* Similar conditions prevailed in most of the Greek cities of Asia Minor at the time of Thales. Miletus, like other commercial cities of Ionia, underwent important economic and political developments during the seventh and sixth centuries. At first, political power belonged to
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the Greeks, the Jews did not, nor can we suppose that Jeremiah felt anything but horror towards the sceptical Ionians. As regards the date of Thales, the best evidence, as we saw, is that he was famous for predicting an eclipse which, according to the astronomers, must have taken place in
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and such a date it was worth while to look out for an eclipse, and this is probably all that Thales knew. Neither he nor they knew why there is this cycle. Thales is said to have travelled in Egypt, and to have thence brought to the Greeks the science of geometry
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. What the Egyptians knew of geometry was mainly rules of thumb, and there is no reason to believe that Thales arrived at deductive proofs, such as later Greeks discovered. He seems to have discovered how to calculate the distance of a ship at sea from
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water. The Greeks were rash in their hypotheses, but the Milesian school, at least, was prepared to test them empirically. Too little is known of Thales to make it possible to reconstruct him at all satisfactorily, but of his successors in Miletus much more is known, and it is reasonable to
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skill in the stars while it was yet winter that there would be a great harvest of olives in the coming year; so, having a little money, he gave deposits for the use of all the olive-presses in Chios and Miletus, which he hired at a low price because no one bid
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rich if they like, but that their ambition is of another sort.” Anaximander, the second philosopher of the Milesian school, is much more interesting than Thales. His dates are uncertain, but he was said to have been sixty-four years old in 546 B.C., and there is reason to suppose
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that this is somewhere near the truth. He held that all things come from a single primal substance, but that it is not water, as Thales held, or any other of the substances that we know. It is infinite, eternal and ageless, and “it encompasses all the worlds”—for he thought
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by the religious movement connected with Bacchus and Orpheus; its religion was Olympic, but seems to have been not taken very seriously. The speculations of Thales, Anaximander, and Anaximenes are to be regarded as scientific hypotheses, and seldom show any undue intrusion of anthropomorphic desires and moral ideas. The questions they
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man who marked him doing this, would deem him mad. Heraclitus believed fire to be the primordial element, out of which everything else had arisen. Thales, the reader will remember, thought everything was made of water; Anaximenes thought air was the primitive element; Heraclitus preferred fire. At last Empedocles suggested a
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those who have preserved purity. * Cyril Bailey, The Greek Atomists and Epicurus, estimates that he flourished about 430 B.C. or a little earlier. * From Thales to Plato, p. 193. † Greek Mathematics, Vol. I, p. 176. ‡ On Generation and Corruption, 326 a. * This interpretation is adopted by Burnet, and also, at
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far from being subversive, were rather dull and commonplace. This defence goes too far, since it leaves the hostility to Socrates unexplained. As Burnet says (Thales to Plato, p. 149): “Xenophon’s defence of Socrates is too successful. He would never have been put to death if he had been like
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politician; Meletus, a tragic poet, “youthful and unknown, with lanky hair, and scanty beard, and a hooked nose”; and Lykon, an obscure rhetorician, (See Burnet, Thales to Plato, p. 180.) They maintained that Socrates was guilty of not worshipping the gods the State worshipped but introducing other new divinities, and further
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stunted in their growth. The right age for marriage is thirty-seven in men, eighteen in women. We learn how Thales, being taunted with his poverty, bought up all the olive-presses on the instalment plan, and was then able to charge monopoly rates for their use. This he did to show that
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, almost wholly, Greek in origin. There are many pleasant stories, probably unhistorical, showing what practical problems stimulated mathematical investigations. The earliest and simplest relates to Thales, who, when in Egypt, was asked by the king to find out the height of a pyramid. He waited for the time of day when
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scenery for the plays of Aeschylus. The problem of finding the distance of a ship at sea, which was said to have been studied by Thales, was correctly solved at an early stage. One of the great problems that occupied Greek geometers, that of the duplication of the cube, originated, we
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of their pioneers to travels in Egypt, but what had really been achieved before the Greeks was very little. The prediction of an eclipse by Thales was, however, an example of foreign influence; there is no reason to suppose that he added anything to what he learnt from Egyptian or Babylonian
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religion. There is a very sympathetic account of Plato, whom he places above all other philosophers. All others are to give place to him: “Let Thales depart with his water, Anaximenes with the air, the Stoics with their fire, Epicurus with his atoms.”* All these were materialists; Plato was not. Plato
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of man, 776 and Rousseau, 700 friendship, 179–180, 184, 241, 245, 256, 370 Frisia, 394 From Religion to Philosophy (Cornford), 22, 32, 41* From Thales to Plato (Burnet), 65*, 83, 85 Fulbert, Canon, of Paris (?–0128?), 437 Fulda, 394 future life, 330, 710 Galatians, 224, 226 Epistle to the, 341
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, 723–724, 726, 773, 776, 780–782 philosophy, -ies: and Arabs, 283 and Aristotle, 159, 200, 202 in Athens, 59–60, 61, 80 begins with Thales, 3, 24 classification of, 701–792 consists of two parts, 787, 834 contemplative ideal in, 34 cosmopolitan point of view in, 220 and dark ages
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, 473–474 Tertullian (Quintus Septimius Florens Tertullianus), Latin Father of the Church (160?–230?), 256, 318 “Testaments of the Twelve Patriarchs,” 319–323 Teutamus, 41 Thales of Miletus, Greek philosopher and scientist (640?–546 B.C.), 3, 6, 2426, 28, 43, 185, 208, 212, 358
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Thales to Plato (Burnet), 83, 85 Theaetetus, Greek mathematician (contemporary of Plato), 147, 149, 150, 209, 211 Theaetetus (Plato), 44, 77, 149–159, 474, 567, 610,
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water, 27, 28, 40, 117, 254 and Aristode, 206, 207 and Empedocles, 43, 555 and Heraclitus, 42, 44 and Plato, 144, 145, 146, 147 and Thales, 24, 26, 43 Waterloo, 750 Waverley (Scott), 831 wealth, 9, 278, 422 Wedgwoods, English pottery manufacturers, 679 Weierstrass, Karl Theodor, German mathematician (1815–1897), 211
Finance and the Good Society
by Robert J. Shiller · 1 Jan 2012 · 288pp · 16,556 words
way. One of the earliest mentions of derivatives, by Aristotle (384–322 BCE) in his Politics, describes the successful trading of the noted Greek philosopher Thales (mid-620s to mid-540s BCE), the man who is sometimes described as the world’s rst real mathematician for having conceived of mathematics as
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stated assumptions with rigorous proofs. Apparently mathematicians were interested in finance from the very beginning! Aristotle describes Thales as giving earnest money, arrabon , for the use of olive presses at an agreed rental rate for a later harvest. Earnest money and option premium are really the same thing. The word arrabon has taken on
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, before the decision is finalized—something that one must consider before making the choice.1 The exact nature of the contract between Thales and the farmers who owned the olive presses is not known. Perhaps the contract gave the presser the right to a fraction of the oil produced in compensation for the
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costs he incurred in pressing the olives. Thales was buying what we now call options on olives because he could later choose not to
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story, the value of olives in fact went up as Thales had predicted. Hence “he gave deposits for the use of all the olive-presses in Chios and Miletus, which he hired at a low price because no one bid against him. When the harvest-time came, he let them out at any rate
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thing. Indeed it sounds rather like a story of a smart operator taking advantage of the broader public. But we learn from this story that olive press owners were open to the sale of options. Presumably they had made such trades before. Why were they willing to do this? Clearly the pressers
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got the worse of the deal in this instance. Were they deceived by Thales? In fact it is easy to imagine why olive pressers were willing to sell options on use of their presses when
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Thales came to them with an o er. Here was an o er of money on the table for the chance—which the pressers must have
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regarded as small—that olive values would increase to a high level. They must have assumed that Thales did not know that olive prices would be higher, so they were trading the “upper tail” of possible performance for a sure thing today. The
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might have preferred insurance against massive falls in olive prices, if the terms were right—but Thales was apparently not offering that. Were speculators like Thales, who wished to buy olive options, irrational? Not if they, like Thales, had some way to predict olive values. But we have seen that pressers wouldn’t
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the absence of information about future olive oil prices. The options market must be working much better today than it did in the time of Thales. Then there was perhaps only one mathematician / option trader in the entire world; with no competition, he could make a fantastic pro t. But now
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portfolios of simple options.”5 But in fact only a small fraction of our risks are traded in any derivatives markets. The ancient example of Thales notwithstanding, it is a curious fact that in modern times, until just a few years ago, no olive oil derivatives were traded on any organized
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psychological weaknesses of their customers. They argue that the most significant source of interest in options trading is not on the part of people like Thales who think they can predict the market, but from those on the other side of the market who may misunderstand options and see more value
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than really exists. As evidence, Shefrin and Statman quote a manual for options brokers who are seeking out customers willing to take the side of Thales’ olive pressers. The manual offers a script for these would-be brokers: JOE SALESMAN: You have told me that you have not been too pleased
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money on average if the prices they pay for the options are low. Although Aristotle did not suggest it, it seems in fact conceivable that Thales was doing just that, even if he never developed any formal theory of options pricing. He may have had enough intuitive quantitative insight to sense
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–16, 117, 133; gift, 204–5; progressive, 116, 192, 193–94, 217–18, 235; sumptuary, 191, 192. See also income taxes technology. See information technology Thales of Miletus, 76–77, 79 Thatcher, Margaret, 92, 212 Thoreau, Henry David, Walden, 137 “too big to fail” institutions, 23, 53, 217 Total Compensation Solutions
Antifragile: Things That Gain From Disorder
by Nassim Nicholas Taleb · 27 Nov 2012 · 651pp · 180,162 words
IV: OPTIONALITY, TECHNOLOGY, AND THE INTELLIGENCE OF ANTIFRAGILITY Do You Really Know Where You Are Going? The Teleological Fallacy America’s Principal Asset Chapter 12. Thales’ Sweet Grapes Option and Asymmetry The Options of Sweet Grapes Saturday Evening in London Your Rent Asymmetry Things That Like Dispersion The Thalesian and the
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to antifragile. BOOK IV: OPTIONALITY, TECHNOLOGY, AND THE INTELLIGENCE OF ANTIFRAGILITY (The tension between education, which loves order, and innovation, which loves disorder.) CHAPTER 12. Thales versus Aristotle, and the notion of optionality, which allows you not to know what’s going on—why it has been misunderstood owing to the
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aim—after some work—to connect in the reader’s mind, with a single thread, elements seemingly far apart, such as Cato the Elder, Nietzsche, Thales of Miletus, the potency of the system of city-states, the sustainability of artisans, the process of discovery, the onesidedness of opacity, financial derivatives, antibiotic
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may be just all talk. Since most were poor, they might have fit a narrative to the circumstances (we will see with the story of Thales of Miletus the notion of sour grapes—cognitive games to make yourself believe that the grapes that you can’t reach taste sour). Seneca was
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, and innovation) that, perhaps, our greatest asset is the one we distrust the most: the built-in antifragility of certain risk-taking systems. CHAPTER 12 Thales’ Sweet Grapes Where we discuss the idea of doing instead of walking the Great Walk—The idea of a free option—Can a philosopher be
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called nouveau riche? An anecdote appears in Aristotle’s Politics concerning the pre-Socratic philosopher and mathematician Thales of Miletus. This story, barely covering half a page, expresses both antifragility and its denigration and introduces us to optionality. The remarkable aspect of this
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. I am not saying this to denigrate the great Aristotle, but to show that intelligence makes you discount antifragility and ignore the power of optionality. Thales was a philosopher, a Greek-speaking Ionian of Phoenician stock from the coastal town of Miletus in Asia Minor, and like some philosophers, he enjoyed
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Phoenician settlements. But Thales, as a philosopher, was characteristically impecunious. He got tired of his buddies with more transactional lives hinting at him that “those who can, do, and others philosophize.” He performed the following prowess: he put a down payment on the seasonal use of every olive press in the vicinity of
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Miletus and Chios, which he got at low rent. The harvest turned out to be extremely bountiful and there was demand for olive presses, so he released the owners of olive presses on his own terms, building a substantial fortune in
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a certain level of opulence and independence, gents tend to be less and less personable and their conversation less and less interesting. The story of Thales has many morals, all of them linked to asymmetry (and the construction of an antifragile payoff). The central one is related to the following account
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it was still winter that there was going to be a large crop of olives …” So for Aristotle, clearly, the stated reason was Thales’ superior knowledge. Superior knowledge? Thales put himself in a position to take advantage of his lack of knowledge—and the secret property of the asymmetry. The key to
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not the obligation” for the buyer and, of course, “the obligation but not the right” for the other party, called the seller. Thales had the right—but not the obligation—to use the olive presses in case there would be a surge in demand; the other party had the obligation, not the right
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. Thales paid a small price for that privilege, with a limited loss and large possible outcome. That was the very first option on record
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. The option is an agent of antifragility. OPTION AND ASYMMETRY The olive press episode took place about six hundred years before
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the long run, from volatility (and the reverse). You are only harmed if you repeatedly pay too much for the option. But in this case Thales patently got a good deal—and we will see in the rest of Book IV that we don’t pay for the options given to
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fail. So you need less information, that is, less knowledge, about the resort with broader options. There are other hidden options in our story of Thales. Financial independence, when used intelligently, can make you robust; it gives you options and allows you to make the right choices. Freedom is the ultimate
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—as in Aesop’s fable—is when someone convinces himself that the grapes he cannot reach are sour. The essayist Michel de Montaigne sees the Thales episode as a story of immunity to sour grapes: you need to know whether you do not like the pursuit of money and wealth because
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good thing because it is bad for one’s digestive system or disturbing for one’s sleep or other such arguments. So the episode enlightened Thales about his own choices in life—how genuine his pursuit of philosophy was. He had other options. And, it is worth repeating, options, any options
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, by allowing you more upside than downside, are vectors of antifragility.1 Thales, by funding his own philosophy, became his own Maecenas, perhaps the highest rank one can attain: being both independent and intellectually productive. He now had
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option. Again, this is an embedded option, hidden as there is no cost to the privilege. Asymmetry Let us examine once again the asymmetry of Thales—along with that of any option. In Figure 5, the horizontal axis represents the rent, the vertical axis the corresponding profits in thekels. Figure 5
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payoff is larger one way (if you are right, you “earn big time”) than the other (if you are wrong, you “lose small”). FIGURE 5. Thales’ antifragility. He pays little to get a huge potential. We can see the asymmetry between upside and downside. The vertical axis in Figure 5 represents
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. So I make the bold speculation that many things we think are derived by skill come largely from options, but well-used options, much like Thales’ situation—and much like nature—rather than from what we claim to be understanding. The implication is nontrivial. For if you think that education causes
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, rarely for the wheel on the suitcase. Simplicity, I realized, does not lead to laurels. Mind the Gaps As we saw with the stories of Thales and the wheel, antifragility (thanks to the asymmetry effects of trial and error) supersedes intelligence. But some intelligence is needed. From our discussion on rationality
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of Lloyd underwriters, losing income made over generations. One single episode. We will return to these two distinct payoffs, with “bounded left” (limited losses, like Thales’ bet) and “bounded right” (limited gains, like insurance or banking). The distinction is crucial, as most payoffs in life fall in either one or the
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. We’ve been falling for the green lumber problem since the beginning of the golden age of philosophy—we saw Aristotle mistaking the source of Thales’ success; now we turn to Socrates, the greatest of the great masters. EUTHYPHRO Plato expressed himself chiefly through his use of the person who no
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rather sucker or nonsucker. Things are always simpler with him. In real life, as we saw with the ideas of Seneca and the bets of Thales, exposure is more important than knowledge; decision effects supersede logic. Textbook “knowledge” misses a dimension, the hidden asymmetry of benefits—just like the notion of
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can sprint before running out of breath. A pound, from libra, is what you can imagine holding in your hands. Recall from the story of Thales in Chapter 12 that we used thekel or shekel: these mean “weight” in Canaanite-Semitic languages, something with a physical connotation, similar to the pound
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, winning big, so vastly more successful than the other way (actually the other way would be bust). So you would have made the Thekels like Thales because betting against the fragile is antifragile. But someone who had merely “predicted” the event with just words would have been called by the journalists
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companies composing the stock market, thanks to the asymmetry of the stock option, are richer by close to four hundred billion dollars. They pulled a Thales on these poor savers. Even more outrageous is the fate of the banking industry: banks have lost more than they ever made in their history
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not identify you so much as other attributes, here your birth (but it could be something else). This is the f*** you money that allowed Thales of Miletus to gauge his own sincerity. For the Spartans, it was all about courage. For Fat Tony, humanity started at the level of “self
The Wisdom of Finance: Discovering Humanity in the World of Risk and Return
by Mihir Desai · 22 May 2017 · 239pp · 69,496 words
and diversification—that correspond to strategies for dealing with uncertainty. In this chapter, authors Jane Austen and Anthony Trollope as well as the Greek philosopher Thales do most of the work. With the foundations of risk and insurance well laid, the next chapter addresses how risk corresponds to return and how
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excellent guides to understanding that question. Violet’s appreciation of self-knowledge as a prerequisite to the thoughtful use of options has deep historical resonance. Thales of Miletus, acknowledged as the father of Greek philosophy by no one less than Aristotle himself, is often credited both with the phrase “know thyself
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” and with originating the first options transaction. Thales earned his position as the only philosopher in the Seven Sages of Greece by pioneering the use of natural, instead of supernatural, explanations for phenomena
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crudest of instruments. Despite these remarkable accomplishments, Thales still had something left to prove. According to Aristotle, Thales’s poverty led him to be “taunted with the uselessness of philosophy.” Seeking to redress this impression, Thales decided to capitalize on his ability to forecast a good olive harvest. “He raised a small sum of
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money and paid round deposits for the whole of the olive-presses in Miletus and Chios, which he hired at a low rent as
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terms he liked he realized a large sum of money.” Aristotle’s lesson from this story reflects the smug sentiments of philosophers and academics everywhere—Thales demonstrated that “it is easy for philosophers to be rich if they choose, but this is not what they care about.” How does
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Thales’s transaction reflect the nature of options? The “deposit” that Thales first paid secured the right, but not the obligation, to rent the presses. This transaction is the essence of an
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power of leverage. The transaction proceeds with Pakhom paying a deposit to secure the right to purchase the land while he secures financing, just as Thales did more than two millennia ago when he pioneered the use of options to create choices and enable risk-taking. Pakhom borrows more to buy
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world’s workings can be explained by a few laws. And to whom did Wilson attribute that idea? The original source is none other than Thales of Miletus, our innovator of option securities and derivatives. Perhaps everything is connected. Wilson went on to explain his efforts to rectify the problem identified
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–34, 170 disorder and chaos, 33–34 insurance executive, 32–33 T talent, etymology of, 58–59, 74 “Tale of Beryn” (Chaucer), 74 Talmud, 52 Thales of Miletus, 7, 42–43, 162, 177 Tiger Moms, 95 Tolstoy, Leo, 9, 162–64 tontines, 28–30 Tontine Coffee House, 28 Tootsie Roll Industries
The Little Book of Hedge Funds
by Anthony Scaramucci · 30 Apr 2012 · 162pp · 50,108 words
, Thales struck up a deal with all of the local olive refiners in the region. In exchange for a large sum of money, he asked these unknowing farmers “for the right but not the obligation” to rent the entire olive pressing facility for a set fee for the duration of the year’s harvest
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.1 As luck would have it, Thales’ prediction proved to be true as the olive crop experienced a record-breaking
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harvest. But, alas, luck can take you only so far. Having strategically negotiated a deal with the farmer for the right to rent the olive press at a set fee
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levels in sports, suddenly they were warranted in corporate America and the world of hedge fund investing. The Secret Is in the Sauce While the Thales tale is quite enjoyable to read (and was somewhat retold here for some humorous relief), it is generally agreed that the first hedge fund was
Radical Uncertainty: Decision-Making for an Unknowable Future
by Mervyn King and John Kay · 5 Mar 2020 · 807pp · 154,435 words
the solar eclipse in 585 BC was described by Isaac Asimov as ‘the birth of science’. 2 Thales also used his scientific knowledge to anticipate an especially plentiful olive harvest. He bought options on all the olive presses in Miletus, and when demand soared he rented them out at a substantial profit. According to
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Aristotle, Thales’ motive was not primarily pecuniary; he aimed to provide an answer to the question so often thrown
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of ‘if you’re so smart why aren’t you rich?’ It is evident from Soros’s writings that he has much in common with Thales of Miletus, and would prefer to be remembered for his ideas than his wealth. Buffett’s letters – and all-day stage performances at the Berkshire
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-based or narrative, are specific to context and to the skills and judgement of the investor. We can indeed benefit from the insights of both Thales of Miletus and Harry Markowitz, and learn from both of the contradictory narratives of the world of finance propagated by Gene Fama and Bob Shiller
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-fragility’ – positioning oneself to benefit from radical uncertainty and the unknowable future. The value of an option is increased by volatility. The details of Thales of Miletus’s transaction with the olive presses remain obscure – if indeed any such transaction actually occurred. Perhaps he made a futures contract with the owners of the
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olive presses, perhaps he bought what we would now describe as a call option: the right, but not the obligation, to rent the presses at a price agreed in advance – a price which would seem low if the harvest was as good as Thales anticipated. In either case, he
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trumping theory, 389 ; search for unified theory of everything, 219 ; and stationarity, 18–19 , 35 , 236 , 373–4 , 388 , 392 , 429–31 ; string theory, 357 ; Thales of Miletus, 303–4 ; validity of research findings, 242–7 Scott, James, 167 Scott, Rick, 189 Scottish Enlightenment, 163 , 187 Scottish Widows Fund, 325 , 328
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Tehran embassy siege (1979), 8 terrorism, 7 , 74–6 , 202 , 220 , 230 , 296 Tetlock, Philip, 21–2 , 221–2 , 294–5 Thaler, Richard, 118 , 148 Thales of Miletus, 303–4 , 319 , 320 , 422 Thames embankments, London, 424–5 Thatcher, Margaret, 290–2 , 412 Theranos, 228–9 Thiel, Peter, 361–2 , 427
Cosmos
by Carl Sagan · 1 Jan 1980 · 404pp · 131,034 words
Greek names, largely unfamiliar to us today, but the truest pioneers in the development of our civilization and our humanity. The first Ionian scientist was Thales of Miletus, a city in Asia across a narrow channel of water from the island of Samos. He had traveled in Egypt and was conversant
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—for example, the proposition that the angles at the base of an isosceles triangle are equal. There is a clear continuity of intellectual effort from Thales to Euclid to Isaac Newton’s purchase of the Elements of Geometry at Stourbridge Fair in 1663 (p. 68), the event that precipitated modern science
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and technology. Thales attempted to understand the world without invoking the intervention of the gods. Like the Babylonians, he believed the world to have once been water. To
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explain the dry land, the Babylonians added that Marduk had placed a mat on the face of the waters and piled dirt upon it.* Thales held a similar view, but, as Benjamin Farrington said, “left Marduk out.” Yes, everything was once water, but the Earth formed out of the oceans
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was a common principle underlying all of matter, just as today we might say the same of electrons, protons and neutrons, or of quarks. Whether Thales’ conclusion was correct is not as important as his approach: The world was not made by the gods, but instead was the work of material
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forces interacting in Nature. Thales brought back from Babylon and Egypt the seeds of the new sciences of astronomy and geometry, sciences that would sprout and grow in the fertile
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soil of Ionia. Very little is known about the personal life of Thales, but one revealing anecdote is told by Aristotle in his Politics: [Thales] was reproached for his poverty, which was supposed to show that philosophy is of no use. According to the
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year; so, having a little money, he gave deposits for the use of all the olive-presses in Chios and Miletus, which he hired at a low price because no one bid
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, and unsuccessfully urging a federation of all the island states of Ionia to oppose the Lydians. Anaximander of Miletus was a friend and colleague of Thales, one of the first people we know of to do an experiment. By examining the moving shadow cast by a vertical stick he determined accurately
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number of worlds, all inhabited, and all subject to cycles of dissolution and regeneration. “Nor,” as Saint Augustine ruefully complained, “did he, any more than Thales, attribute the cause of all this ceaseless activity to a divine mind.” In the year 540 B.C. or thereabouts, on the island of Samos
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was too late. In Greece the tide was turning, although the Ionian tradition continued in Alexandrian Egypt two hundred years later. The great scientists from Thales to Democritus and Anaxagoras have usually been described in history or philosophy books as “Presocratics,” as if their main function was to hold the philosophical
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Archimedes. *The sixth century B.C. was a time of remarkable intellectual and spiritual ferment across the planet. Not only was it the time of Thales, Anaximander, Pythagoras and others in Ionia, but also the time of the Egyptian Pharaoh Necho who caused Africa to be circumnavigated, of Zoroaster in Persia
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and some extremely different. We will know which stars to visit. Our machines and our descendants will then skim the light years, the children of Thales and Aristarchus, Leonardo and Einstein. We are not yet certain how many planetary systems there are, but there seem to be a great abundance. In
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ancient example, from around 600 BC, has come down to us. The ancient Greek philosopher Thales is said to have cornered the market on olive presses on the island of Chios in anticipation of a large olive harvest. When his prediction came true, he made a large profit selling the use of the oil
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Tech Bubble, 40 telegraphy, 356 Tennyson, Alfred, Baron, 144 testosterone, 108, 337–338 Texas hold ’em, 59–60 Texas Instruments, 357, 384 Thackray, John, 234 Thales, 16 Théorie de la Spéculation (Bachelier), 19 theory of mind, 109–111 thermal homeostasis, 367–368, 370 This Time Is Different (Reinhart and Rogoff), 310
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to have purchased at low cost in the off-season the option to use oil press machinery capacity for the fall harvest. His strategy was to exercise his options when the olive presses were in great demand in the spring, once the high-demand period arrived. He could then exercise his option and
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rent out the machines for a handsome profit. Aristotle referenced: There is, for example, the story which is told of Thales of Miletus. It is a
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story about a scheme for making money, which is fathered on Thales owing to his reputation for wisdom; but it involves a principle of general application. He was reproached
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[next summer], and having a small sum at his command, he paid down earnest-money, early in the year, for the hire of all the olive-presses in Miletus and Chios; and he managed, in the absence of any higher offer, to secure them at a low rate. When the season came
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that it is easy for philosophers to become rich if they so desire, though it is not the business which they are really about.2 Thales’ anecdote is interesting. Even millennia ago, there was the same lament we hear today over the separation of production from those that would make money
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