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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political,... More
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  • SILK STOCKINGS TO FLYING CARS - By Charles Payne 0 comments
    Mar 26, 2014 11:31 AM

    Hosting Varney & Co 11:00 AM- 1:00 PM

    Born in 1563, William Lee grew up as most young men of that era, but his curiosity led him down a path that not many inventors braved before or during his time.

    As a young man, Lee watched how popular knitted wool caps and wool stockings were for young children, and how it became all the 'rage' after Queen Elizabeth issued an edict that "her people should always wear a knitted cap."

    This fashion dictated and sparked a massive demand, and eventually 200,000 hand-knitters produced 20 million pairs of wool stockings and other clothing items. Soon demand surged throughout Europe, which created a huge export market to Germany, France, Holland, and Spain.

    By this time, Lee began to wonder why this laborious task could not be improved. His invention dominated his thinking much to the disgust of his father. According to Lee, his father was annoyed and thought it was a "waste of time" and energies on a "woman's work." He wanted Lee to focus and become involved in the church.

    Young William explained to his father the Protestant system of moral principles, which allowed him to work for a trading purpose, as well as serving God at the same time. This was a difficult time, where Lee later explained of his tortured agony of having had an amazing idea, and how he had taken the slow process and made it more efficient. His dream had to become a reality. To this end, he spent time with everyone that could possibly help:
     

    • Village blacksmiths
    • Carpenters
    • Thinkers and fellow dreamers at Cambridge
    • Lee's sister taught him how to use knitting pins


    Lee's device was born and he was ready to go into business. However, only one obstacle remained and that was the approval and blessing from the Queen. William Lee made his way to London, finally befriended, and impressed the right people, and an introduction was wrangled. Lee could not have prepared himself for the reaction and the words spoken from Her Highness:

    "Thou aimest high, Master Lee. Consider thou what the invention could do to my poor subjects. It would assuredly bring to them ruin but depriving them of employment, thus making them beggars."

    Looking at Lee's benefactor, Lord Hundson, the Queen continued:

    "Had Mr. Lee made a machine which could have given me silk stockings, I would have been justified in granting him a patent."

    Returning her gaze to Lee, the Queen concluded:

    "To enjoy the privilege of making stockings for everyone is too important to grant to any individual."

    Lee was devastated and spent the next few years perfecting his "loom to knit" device, and he learned how would-be capitalism had come with a fair amount of roadblocks. One such roadblock was actually becoming a knitter, while forced to pay £3.00 for the privilege to join the Weavers Guild and to obtain the Freedom of the City. Despite this fact, England was then a happening place, flourishing in the arts. The other roadblock was the Queens interest in the science of astrology, which commanded more of her attention at that time.

    A decade later, his machines were ready for 'prime time,' but Lee found a more receptive audience in France.

    William's stocking framework and knitting machine received a patent in 1589, from Huguenot's, Henry IV of France. He moved to the town of Rouen and by 1785, France had 45,000 machines, more than twice that in England, who had lost its dominance and economic benefits.

    The More Things Change

    There are many morals to this story, and none of them have been learned just yet. President Obama has found a way to make people buy a product he wants them to own, although unlike Queen Elizabeth, ObamaCare and high insurance premiums are not all the 'rage.' In the meantime, that Protestant system no longer competes with the notion of working for the church, but instead with the notion of not working at all. Moreover, there are the lessons of how politicians can actually strangle, or hold the free market hostage.

    There are three states, all headed by Republican governors that prohibit Tesla Motors from selling their cars via the Internet. There is the curious case of Uber the car service, with the disruptive business model, that would have been rejected by Queen Elizabeth, as it is now in city after city.

    Lawsuits by taxi drivers in San Francisco, the birthplace of Uber, cease and desist orders continue to mount in the state of Massachusetts. Even Uber drivers are after the company for a larger slice of tips. In Dallas, 31 Uber drivers was charged with crimes, which were eventually dropped, the city council has put into place rules that effectively wipe out the competitive advantages of the service, where the nearest car can be summoned via the smart phone and GPS technology.

    Today, there are amazing things happening with technology and other disruptive ways of doing business. I often wonder how much further along we would be, if Queen Elizabeth had allowed that knitting machine to be developed sooner. Perhaps the Industrial Revolution would have started earlier, and possibly things on the drawing board would be more of a reality. Maybe we could be zipping around in flying cars...but then again, I bet regulations would clip those wings.

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