The Rational Optimist: How Prosperity Evolves

A History of Progress

Matt Ridley’s The Rational Optimist is a history of progress based on a simple but unpopular idea: that specialization and markets are the prime movers of progress. In fact, Ridley suggests in his introduction that the answer to the perennial “What makes humans unique?” question is our unique ability to specialize and trade. Instead of catching our own food, making our own shelter, etc (as other animals do), we humans have created a system where everyone can specialize and trade with others who specialize in other things. This means that those best at making houses make houses, those best at making food make food, and by trading, we can each benefit from that which others do and vice versa. Self-reliance equals subsistence: interdependence through trade equals ingenuity and a boom in living standards.

“What?!” you say. What about Rousseau, Marx, Ehrlich, Marcuse, and all of those other critics of society! What about all the stuff we hear about how capitalism exploits the poor, reduces living standards, rapes the environment, etc, etc. The first few chapters of Ridley’s book are devoted to showing that, on all fronts, markets have actually produced higher living standards FOR ALL (and especially the poor, as also shown in Sowell’s Economic Facts and Fallacies), MORE leisure time for all, and – here’s the most surprising – better environmental conditions.

The next several chapters are a history of how this progress happened. To be honest, these chapters may be the most dry as they are very detail-laden and repetitive in that they stress the same theme across time – that specialization leads to ingenuity and progress. In the vein of Robert Wright’s Nonzero: The Logic of Human Destiny, Ridley demonstrates – and explains the principle behind – this equation. In brief, when humans invented the idea of specialization and trade, I could make x and you could make y, things we each excel at. Each of us, then, can trade what we excel at for what others excel at rather than having to do all of it ourselves.

Finally, when I realize that I can trade my x’s for your y’s and her z’s, it pushes me to be as productive at making my x’s as possible (and innovating new ways to make better and faster x’s) so that I can make the most of my time. Thus, we stumble upon a brilliant non-zero sum way to ensure that we all benefit from each other’s ingenuity, creativity, and labor. Most of these chapters (starting in the stone-age and ending in the present) stress the idea that as transportation allowed us to trade with increasingly larger groups, and as technology allowed us to create more efficiently, the “collective brain” became bigger and everyone could benefit from everyone else’s progress.

The last three chapters may be the most controversial as they deal with current naysayers – particularly environmentalists. To be clear, Ridley is not advocating that we continue current environmental practices. Yes, depending on non-renewable fuel, by definition, means that at some point, the fuel will run out. Ridley only points out that naysayers rely on a hidden but faulty premise: that the future will resemble the past. Yes, we will run out of fossil fuels if we keep using it, but whose to say that we will keep using them?

Just like Ehrlich’s remarkably failed prediction that over-population will lead to food shortages, these folks’ error lies in assuming that future ways of production will resemble past ways, and time and time and time again, this assumption has proved erroneous! Ridley’s point is that while we can never say that the future will solve all pressing problems, so far we have. And we can assume we will in the future because our method of exchange has globalized the “collective brain,” assuring that innovation will keep occurring and the best minds will all be working on the pressing problems of the day. (Again, Ridley is not attempting Pollyanna-ism here, but only suggesting that the burden of proof should now lie on the naysayers because the past gives us every reason to think that we will, rather than will not, solve the problems that confront us.)

Now, for two minor criticisms of the book. First, I do question whether Ridley has the knowledge base to go into as much history as he does. When looking through the large endnote section, many of his citations are from non-peer-reviewed trade books, magazines, etc. I simply have a feeling that Ridley’s book may not be as academically rigorous as some might want.

I also question Ridley’s omission of the crucial function language plays in his theory, for he doesn’t spend much time on it. When he asks, as he does repeatedly, what it is about humans over other animals that have been able to create trade networks and specialization, it seems that ONE of the obvious answers is “language.” We have the ability to create language that is not only self-expressive but also can be used to inform others of our intent, etc. It seems difficult to create a trade network without the kind of language that can let others know your intent, establish trust, etc. If this is correct, Ridley’s shouldn’t omit the topic. If it is wrong, he might have explained why.

Be that as it may, this is still a great read. In a world where pessimism simply sells (and makes one sound intellectual) more than optimism, books like these need to be written… and read.

Get your own copy of The Rational Optimist.

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