Ten Laws of the Modern World

Source: Ten Laws of the Modern World – Forbes.com

• Moore’s Law. In 1965 Moore (he cofounded Intel three years later) noted that components on silicon chips were doubling every year. In 1975 he amended that to every two years. Today Moore’s Law has transcended silicon chips. It has become a way of saying that all digital stuff, from PCs to cell phones to music players, get twice as good every 18 to 24 months–at the same price point.

• The Back Side of Moore’s Law. This one says that digital stuff gets 30% to 40% cheaper every year–at the same performance point.

• Andy and Bill’s Law. Moore’s Law constantly enables new software. Often the new software is just an incremental improvement. But every few years the world gets a wild breakthrough–graphic computing in the 1980s, Web browsers in the 1990s, fast search engines today. Next? Surely something amazing.

• Metcalfe’s Law. This one’s named after Robert Metcalfe, the inventor of the computer networking protocol Ethernet. Metcalfe said the usefulness of a network improves by the square of the number of nodes on the network. Translation: The Internet, like telephones, grows more valuable as more join in. This is how Ebay grew so profitable so fast.

• Gilder’s Law: Winner’s Waste. The best business models, he said, waste the era’s cheapest resources in order to conserve the era’s most expensive resources.

• Ricardo’s Law. The more transparent an economy becomes, the more David Ricardo’s 19th-century law of comparative advantage rules the day. Then came the commercial Internet, the greatest window into comparative advantage ever invented. Which means if your firm’s price-value proposition is lousy, too bad. The world knows.

• Wriston’s Law. Wriston predicted the rise of electronic networks and their chief effect. He said capital (meaning both money and ideas) when freed to travel at the speed of light "will go where it is wanted, stay where it is well-treated.…" By applying Wriston’s Law of capital and talent flow, you can predict the fortunes of countries and companies.

• The Laffer Curve. Cut taxes at the margin, on income and capital, and you’ll get more tax revenue, not less. Laffer reasoned that lower taxes would beckon risk capital out of hiding. Businesses and people would become more productive. The pie would grow. Application of the Laffer Curve is why the U.S. boomed in the 1980s and 1990s, why India is rocking now and why eastern Europe will outperform western Europe.

• Drucker’s Law. Odd as it seems, you will achieve the greatest results in business and career if you drop the word "achievement" from your vocabulary. Replace it with "contribution," says the great management guru Peter Drucker. Contribution puts the focus where it should be–on your customers, employees and shareholders.

• Ogilvy’s Law. Ogilvy knew in the 1950s that people make or break businesses. It was true then; it’s truer today.