Monday, July 05, 2010
Dare to be an optimist!
Ridley's book The Rational Optimist: How Prosperity Evolves is quite a bit more serious than that first paragraph makes it sound, but it does describe a key point. He says, "Without trade, innovation just does not happen. Exchange is to technology as sex is to evolution. It stimulates novelty." Another key thing that exchange and trade allow is specialization. Self-sufficiency sounds good in theory (and in practice if you are in a basic survival situation), but when it comes to growth, prosperity, and happiness (all closely linked), specialization means more of everything for everybody. If multiple people in a community have different skills and products, and if exchange is allowed, everyone has the potential to benefit from the knowledge and output of everyone else. Ideas are especially valuable in part because sharing an idea is like lighting a candle for someone else - now you both have a lighted candle (or an idea of how to do something better). When knowledge is shared in a community, it becomes something like a "collective brain." And when the community expands to include the entire world, interconnected by vast transportation networks and with the Internet as its central nervous system, you can have the wild orgy of exchange of ideas, goods, and services that we call the modern world.
Ridley spends most of the book in a chronological journey through the development of civilization, from the first inklings of exchange and specialization some 200,000 years ago (when we really diverged from other species including our close cousins the apes), through expanded barter systems, to the development of agriculture some 10,000 years ago. Of course climate stability had a lot to do with that as well, but an interesting point is that trade is what really made agriculture interesting and worthwhile. There was also the development of energy sources, from human power (including slavery, unfortunately), to animal power, to various forms of "current solar" energy (water power, wind power, burning wood, etc.), to various forms of "stored solar" (coal, oil, natural gas). There are more steps, but it's clear that the modern world is based to a great extent on exchange and specialization, including free trade and the free exchange of ideas. These have in turn produced a wide range of innovations in social systems and technology and led to the astounding prosperity that most (but of course not all) people in the world enjoy today. Ridley points out that while Louis XIV used some 498 servants to prepare his meals, a modern person of average means has many more people working for him or her (mostly indirectly and on a shared basis) to make easily available food, clothing, medicines, transportation, entertainment, and everything else that we take for granted in modern life. In this sense the average person today is richer than a king in the seventeenth century.
But if things are so great and getting better all the time, why are so many people so pessimistic about the present and the future? Ridley doesn't have a good explanation for this, though he knows he's fighting from a minority position (optimists must be naive!), and he shows that it has always been so. People were fretting over "peak coal" in 1830, and convinced that things had improved so much in the previous half century that there could be no place to go but down. But of course the rest of the nineteenth century was in fact a golden age of technological and social development. Things like slavery and child labor declined not so much because people became nicer, but because energy sources and manufacturing methods made them less necessary (or you could say affordable to give up).
The Rational Optimist is not really an ideological work. While there is a strong sense that Ridley believes that markets generally work better than governments (especially corrupt governments like many in Africa), he's not saying that governments are not necessary. He's certainly a strong proponent for free trade and individual rights, which are strongly correlated with a sense of well-being or "happiness." He also believes that things will continue to get better, even for Africa, as long as we keep moving forward in terms of trade and openness. Although anything can happen including terrorism, crazy governments, natural disasters, etc., his optimism is based on considerations of history and of how things really work (and especially on how resourceful people are), not on wishful thinking or on some belief that prosperity is humanity's right or destiny. It's more or less what we do.
I personally tend toward optimism myself, and this book has given me a lot to think about including many reasons for optimism that I hadn't thought about before. I highly recommend this book.