Sunday, June 26, 2011

The Rational Optimist, Matt Ridley

Matt Ridley's The Rational Optimist is a very well written ode to the value of trade and how it contributes to a rational confidence that things will continue to improve for humanity as they have since we first appeared in the world.

Ridley's previous books have mostly been on evolution (though that includes the evolution of cooperation and virtue). Here he's focusing on how trade enriches us all, and how far back trading goes. He uncovers new evidence for the richness of trading in antiquity. One example is Oetzi, the mummified ice age hunter revealed by a receding glacier in the alps in 1991:

[He] was carrying as much equipment on him as the hikers who found him. He had tools made of copper, flint, bone and six kinds of wood: ash, viburnum, lime, dogwood, yew and birch. He wore clothes made of woven grass, tree bark, sinew and four kinds of leather: bearskin, deer hide, goat hide and calf skin. He carried two species of fungus, one as medicine, and other as part of a tinder kit that included a dozen plants and pyrite for making sparks.

Ridley's point is that Oetzi couldn't have collected, sewn, tanned, woven, smelted and sharpened everything he carried himself. The only way he could have accumulated so much useful equipment was through trade. I'm used to arguments for the early emergence of trade that show that quantities of obsidian or sea shells was found hundreds or thousands of miles from where it would have been regularly collected, but Ridley goes to great lengths to display evidence that trade was pervasive and that early people everywhere relied on it extensively for many items in their daily repertoire. It wasn't just an occasional trade for a high-value item, it was a part of routine life, and part of what people ate, wore, and used for healing, hunting, and food storage.

Ridley also carefully lays out the case for Ricardo's point that trade makes us all richer. Expanding the extent of trade increases the size of the market; with more people in your trading community, you can draw on the efforts of specialists who multiply the overall productivity you can take advantage of. Ridley argues that the increasing returns from trade taught our ancestors the value of trust and led to to more virtuous interactions, and better ethical instincts among our ancestors.

The underlying point of much of this is that increasing communication, increasing interaction leads to more and better ideas as we recombine the ideas in new ways, and this leads to the production of more wealth. Around the time of Malthus, it was still possible to argue that increasing production of wealth just made it possible for populations to increase, and didn't really make anyone better off. But sometime in the last two hundred years that started to change, and the recent demographic transition has made that position completely untenable. But pessimism is still more widely respected, and Ridley wants us to understand that a reasonable understanding of the sweep of history and of our evolutionary origins makes optimism a much better fit with our circumstances. Things have been getting better for hundreds of years, and while we can imaging things that might change that, none of them seems particularly likely.

More people are moving to cities where they are more productive and have fewer children. They live wealthier lives than before, and insist on and can afford a cleaner environment and healthier lifestyle. Government restrictions could prevent progress, or trap people outside the cities, or make it harder for them to buy the lifestyle and environmental values they will want, but the smart money goes with the trends. Ridley thinks that the pressure for progress will be sufficient to move governments out of the way, and that spontaneous order will enable people to get what they want. Technology will enhance our healthspan, and our ability to travel and communicate will continue to grow. We'll spend less time working and more on other things. China and Brazil will lead the way if politics in the West grows too stifling.

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