The Rational Optimist: How Prosperity Evolves
by Matt Ridley
According to Wikipedia, Matthew White Ridley is the fifth Viscount Ridley. Born in 1958, he studied at Eton and earned a Doctorate in history at Oxford. A British journalist and businessman, he is best known for his writings on science, the environment, and economics. Apart from the book I am reviewing today, his science books include The Red Queen: Sex and the Evolution of Human Nature (1994), Genome (1999), and The Evolution of Everything: How Ideas Emerge (2015).
I must have found my hardbound copy of The Rational Optimist in a used bookstore. Although only a decade old, it is in rough shape, and sat unread on my bookshelves until the club put the topic of economics onto our program. That’s when I scanned through the book, read the prologue (titled “When ideas have sex,”) and started to read. Once I began, I had a lot of trouble putting this book down – partly because it involves such a splendid combination of economics and history, which are both among my keen interests.
A good place to start in this review would be to cite part of a paragraph from that prologue. To “say that life is the same as it was 32,000 years ago would be absurd. In that time my species has multiplied by 100,000 percent, from perhaps three million to nearly seven billion people. It has given itself comforts and luxuries to a level that no other species can even imagine. It has colonised every habitable corner of the planet and explored almost every uninhabitable one. it has altered the appearance, the genetics and the chemistry of the world and pinched perhaps 23% of the productivity of all land plants for its own purposes. It has surrounded itself with peculiar, non-random arrangements of atoms called technologies, which it invents, reinvents, and discards almost continuously. This is not true for other creatures, not even brainy ones like chimpanzees, bottlenose dolphins, parrots and octopi. They may occasionally use tools, they may occasionally shift their ecological niche, but they do not raise their standard of living, or experience economic growth. They do not encounter poverty either. They do not progress from one mode of living to another and ash nor do they dip Lord doing so. They do not experience agricultural, urban, commercial, industrial and information revolutions, let alone Renaissance is, Reformations, Depressions, Demographic Transitions, Civil Wars, Cold Wars, Culture Wars and Credit Crunches….”
Our ancestors, Homo erectus ape-men, were avid tool users. We know this because archaeologists and others have found their stone axes in digs throughout Africa and Eurasia. But they were not innovators. Once they started making axes, they stuck to the same design for more than a million years. If you've seen one, you've seen them all. It never seemed to occur to these folks that you could make a better hand axe. In Ridley’s words, “their descendants would continue to make it for hundreds of thousands more years. That’s the same technology for more than a thousand millennia, ten thousand centuries, three thousand generations – an almost unimaginable length of time.”
Then we modern humans (homo sapiens) arrived. During the last 100,000 years we have not only devised fishhooks and farming, but steam engines, cellophane and one-click buying. What made us so different? Why did we come so far so quickly when our hominid predecessors were stuck in a rut for thousands of generations? Ridley’s answer is trade. As he sees it, we owe the forward march of humankind to the benefits of barter. Homo erectus had a large brain and probably a rudimentary language, but never saw the point of making things they could swap. Once we cottoned on to this trick, there was no stopping us. If a person good at making fishhooks knows people who are good at fishing, he should make the fishhooks while the others do the fishing. Each party to such a transaction suddenly has free time for further innovation. And the beat goes on.
Ridley makes a strong case for this thesis. He takes us from the hunter-gatherers who first ventured out of Africa to the moguls of Silicon Valley, and shows how humanity has built innovation on innovation in its never-ending search for new gizmos that people will want to buy. From this perspective, specialisation is the essence of humanity, and self-sufficiency a misguided objective. If you really had to make everything yourself, you would be back in the stone age, scrabbling around with hand axes. As Ridley details ad nauseum, it’s far better to work at one thing and let the market supply the rest.
As the book winds down, Ridley takes aim at the gloom-mongers who have always been with us, and have always been wrong. I, for one, have read many books focused on the notion that our civilization was on its way to hell in a handbasket. I’ve read numerous books predicting increasing poverty, pollution, and pestilence. Yet here we are with worldwide life expectancy up by more than a third in the past 50 years, cleaner air and rivers than we have enjoyed for centuries, and birth rates falling dramatically everywhere. In the 1950s, Ridley says, an amazed post-war world proclaimed that “we have never had it so good.” Today, those standards of living would count below the poverty line. And so it goes throughout this charming, optimistic romp through economic history.