Written by Tad Cooke
Compounding comes from Latin componere, “to put together”. This simple word has come to mean many things: to join together to create a whole, to intensify, and to earn interest on previous income. In this last form, compound interest has been called the eighth wonder of the world – by Albert Einstein, no less.
As we deepen our team’s work in Vermont and the Northeast – through research and new leadership with a NRCS Conservation Innovation Grant – we’re also welcoming new projects in Colorado and the West. I have thought often about compound interest through this process: not the mathematical concept, but how our experience and relationships compound to develop more potent knowledge. What does it mean to earn interest on previous lessons? Where can we look to acknowledge and build on others’ compounded experience, and what does it take to preserve that knowledge for future benefit?
Parables of compound interest at work are prolific. In the Legend of Paal Paysam, Hindu god Krishna challenges a local king to a game of chess. If he wins, the king will pay him one grain of rice on the first square of the chessboard, and double the grains of rice for each of the remaining 64 squares. When Krishna wins his chess match, the king pays him one grain on the first square, two on the second square, four on the third, eight on the forth, and so on, until by the 64th square, he owes more rice than the entire world. The local king did not understand the power of compounding, but when we look, compound interest is everywhere.
A more modern legend, Warren Buffet is often called the greatest investor of his time. Buffet began investing in grade school, and by age 50 he was quite a wealthy man. At age 59, his net worth was $3.8 billion, a genuine fortune – but far from the wealthiest in the world. Yet the simple math of compounding interest – adding a percentage return each year on last year’s wealth – made Warren Buffet seventy-eight billion of his $81 billion after his 60th birthday.
The power of compounding extends beyond money and rice. Unlike Warren Buffet, André Voisin was a French biochemist. Voisin is famous in a much smaller circle, where he is known for developing a system of ‘rational grazing’ based on steady observation of cows grazing on pasture. His observations and 1957 book Grass Productivity are the basis for much of Allan Savory’s holistic management approach, and grazing practices we call regenerative farming today.
In his thorough and formative observations on pasture management, Voisin reported on earthworms: specifically, the weight of worm casts in a given acre of land. Worm casts are mostly soil and plants that have passed through the worm’s stomach leaving cylinders of digested plants, soil, and other biomass – worm poop. Measured in weight, the number of worm castings per acre is a direct function of how many worms live in that acre of soil. These castings offer prime nutrients for plant and soil organisms, so much so that they are sold as high-end organic fertilizer.
André Voisin – Grass Productivity, pg. 46.
Voisin and his researchers compared the weight of worm casts per acre in different age pastures. In pasture that had been tilled the year before he found 1.5 tons of worm casts per acre. Compare that to seven year old pasture containing 2.5 tons per acre, a 66% increase in the intervening years. 70 year old pasture, however – that contained 11 tons of worm casts per acre. And “permanent” 300+ year old pasture contained a remarkable 25 tons of worm casts per acre. The weight of these fertile worm castings compounds for every year an acre is left in perennial pasture.
“The first rule of compounding is to never interrupt it unnecessarily.”
As Voisin’s worm researcher concludes: “There is still a great deal to learn about the ways in which earthworms affect the soil by which we live. It would, however, appear that their value is much greater under conditions where man does not disturb the soil than where he does.” Or – to quote Warren Buffet’s business partner Charlie Munger: “The first rule of compounding is to never interrupt it unnecessarily.”
When we look at the world, many things compound over time. Money compounds, worm castings compound, the global population compounds. Under the right conditions, even our individual human experience compounds, leading to intuition.
Psychologist and Nobel laureate Daniel Khaneman describes a now well-known theory of how and when we develop intuitive judgement. He starts by defining a hard truth – our intuition is often wrong. We are too confident in “low validity environments” where we are basing decisions on too little experience, or past experiences where feedback was not sufficiently regular or controlled. In senior firefighters, however – that pattern is reversed. Years of experience are compounded to give these leaders remarkable powers of intuition.
“What we consider ‘expertise’ usually takes a long time to develop,” Khaneman writes in Thinking, Fast & Slow, “The acquisition of expertise in complex tasks such as high-level chess, professional basketball, or firefighting is intricate and slow because expertise in a domain is not a single skill but rather a large collection of miniskills...The fireman who had the ‘sixth sense’ of danger had certainly had many occasions to think about types of fires he was not involved in, and to rehearse in his mind what the cues might be and how he should react”.
From Khaneman’s groundbreaking work, when our environment is sufficiently regular and there is an opportunity to learn these regularities through prolonged practice, we develop a skilled intuition. Under those conditions, experience compounds to deliver invaluable knowledge – the abilities that bring us the joy of chess, the dance of professional sports, and the life-saving sixth-sense of a firefighter.
This phenomena begs a question: does experience and intuition transfer beyond individuals? Does knowledge compound as a society? The answer is familiar to many who work in complex systems: it depends. Knowledge can certainly compound as a society, yet unlike individual intuition, knowledge between people and generations is fleeting.
Between 1910 and 1940 the narrow gauge rail line from Moffat, Colorado shipped more livestock than any rail station in the United States. From the lowlands of Saguache County, up to the crest of the continental divide and back down, hundreds of thousands of sheep would follow the annual green up of alpine grasses under the watchful eye of hard working, knowledgeable herders. And by 1970, it was all gone.
“Once the knowledge is gone, you can’t get it back just like that.”
Fourth generation rancher George Whitten describes this unwinding in The Last Ranch: “We had to give up after 1969 because there weren’t any more herders willing to do the work...the operation did not end because [the herders] became too proud to hire out...but because the whole community simply disintegrated.”
The relationship between people and place, the deep knowledge of the land, a series of cultural connections that passed that knowledge between generations – all were a finely built system that enabled an industry to thrive on the sustainable management of animals and grass.
In George Whitten’s words: “Once the knowledge is gone, you can’t get it back just like that.”
And yet – for all the ways in which compounded knowledge can be lost, it can also be retained. As our planet grapples with climate change, we are increasingly looking to the compounded knowledge of Indigenous people – with far reaching and remarkable effect. We are increasingly recognizing these impacts in the Amazon, where collective Indigenous land rights reduce deforestation, and traditional Indigenous land use provides an ‘exemplary’ foundation for the development of more sustainable approaches to rain forest use and management.
And today, California is increasingly looking to Indigenous traditions of cultural burning to prevent more devastating wildfires.
“People have become disconnected with the land and fire,” says Margo Robbins in an interview with the Nature Conservancy in 2020. Robbins is a member of the Yurok Tribe of Northern California, and executive director of the Cultural Fire Management Council, where she facilitates cultural burning on ancestral land. “And they’ve forgotten, or perhaps because there has been a generational assault on who we are, perhaps they never knew who we [were] and who we’re meant to be.” Yet the knowledge and accumulated wisdom are still there, enduring in Robbins’ Yurok tribal traditions: “Fire has the ability to reestablish that connection.”
Compounding interest has the power to surprise, as it did the local king of Paysam. It confounds us, in the unfathomable accumulation of Warren Buffet’s wealth. Beneath our feet, compounding works quietly to build fertile soil and productive pasture. It astounds us on the chessboard and the basketball court, and saves the life of a seasoned firefighter.
Our rural communities are also built on compounded knowledge and relationships, these intricate connections that unwind all too quickly. Our ability to work and live in rural communities, to tread lightly and improve, rather than extract from our wild place – this knowledge is long to compound, and short to lose. Yet the compounding power of culture and tradition can also endure. When we deepen our connections in the communities we live, when we watch closely in places we love, when we help carry knowledge and know-how to a next generation – we add to the steady compounding of knowledge. Perhaps not in our lifetime, but over generations, that knowledge offers a way to work and live on this planet. Offering proof despite unimaginable pressure, Indigenous knowledge compounded over thousands of years offers effective solutions to the planetary challenges created by the societies that repressed it – if we are wise enough to listen.
"We don't put fire on the ground and not know how it's going to turn out," says Ron Goode, tribal chairman of the North Fork Mono, "That's what makes it cultural burning, because we cultivate."