William Jevons was born in 1835, the son of a Liverpudlian iron merchant. Growing up in the thick of the Industrial Revolution Jevons noticed something peculiar. The more energy efficient the engineers made the steam engine, the more coal Britain consumed. The reason was simple but surprising. As power became cheaper and more efficient, the more people used it – in trains, factories, ships. Improvements that were meant to conserve coal, actually multiplied demand. At the time this was a shocking concept, yet it has echoed through economics ever since. It became known as Jevons Paradox, and it still has plenty to say today.

At MVAM, we like to pretend we are original. But in truth, we just use ideas from others and dress them up to look like ours. Enter the ‘Dishwasher Paradox’. Before dishwashers, most households required only a small number of cups. Once used, a cup was given a wash and placed back on the shelf. Or, in our household, simply refilled with more tea. Each cup worked hard, doing service multiple times a day. Then along came the dishwasher. Suddenly, our routines changed. Instead of rinse and reuse, the dirty cup goes into the machine. Another cup is taken from the cupboard. And of course, dishwashers take time to run, so to keep the household supplied we needed more cups.

Cupboards swell. Mugs for every occasion. Giant mugs. Dainty espresso cups. Novelty goblets proclaiming, “World’s Best Financial Adviser.” Cup productivity, the number of uses per cup, per day, falls dramatically. Imagine if we measured ‘Cup GDP.’ While overall use, total GDP, probably rises (as we consume a lot of coffee these days), if measured as GDP per cup, the ceramic world is in a lasting recession. Sorry, back to the story. Bottom line is, we don’t end up with fewer cups to wash, but with more. Jevons was certainly onto something.

Another point to note about MVAM, is that our ideas have a limited shelf life (yes, pun intended). So, the Dishwasher Paradox, so recently invented, is already being superseded by the Artificial Intelligence (AI) Paradox. As we all ponder how AI will impact our jobs, wealth and even our brains, looking at AI through the lens of the Dishwasher Paradox may help us predict what might happen. If dishwashers mean more cups because there’s a place to store them, then AI could mean more drafts, reports and scenarios, as there’s now a place to keep them, too.

So, the paradox lives on. Technology that promises simplicity may instead bring complexity. Jevons observed this with coal. Dishwashers exhibited this with cups. AI will undoubtedly open a cupboard full of options, but every new “cup” of information will demand a decision. That may not dull our intelligence, but it could exacerbate our stress. The real impact on human brains may be the anxiety of deciding, and then second-guessing those decisions, in a world of endless options.

Decisive leadership, then, will become more appealing – somewhat interesting, but perhaps concerning, when looking at today’s political world. A leader with poor judgment will arrive at the point of destruction more rapidly than in the past. For investors, picking management teams has always mattered, but it will become increasingly important. And what about industries? Those that thrive could be the ones that save us from the burden of decision-making. One of our remaining British institutions, still standing, comes to mind. The pub. A quiet corner to muse over life with no requirements for a conclusion, has perhaps never been more appealing. A pint of Young’s, anyone? Its share price is about the same as the pint of beer it sells!