The Rational Optimist Reviewed

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The Rational Optimist is a rare find for those who love markets, love history, and love reading. Few books you will ever read combine the historical depth that this gem of a find from Matt Ridley has, and yet also challenge your thinking in the way he does. I am a lover of markets and one who finds the perpetual pessimism often permeating amongst those of a like mind to be, well, unacceptable. What Ridley does in this 350-page beauty is explain why, and do so in such a manner that not a single stone is left unturned.

My one qualifier before delving into the review is this: There are well over 50 pages that the book could have done without. This book is not an apology for naturalistic evolution and my review is not going to be a critique of it, but the desire to incorporate at least 50 pages of scientific voodoo into the book is unfortunate. I do not believe it enhanced the value proposition of the book and I do not believe it served up a coherent message. With that said, the book’s many, many fine points make it one of the finer reads I have enjoyed in a long time.

Fundamentally, Matt Ridley is arguing that rational people, guided by the lessons of history, science, and culture, are optimistic people. Many others have argued the same thing, but I doubt any have presented their point with such an excessive arsenal of support.

He begins with the best work I have seen on the true delineation of the human species from the animal kingdom. He makes the insightful point that ours has been an evolution by natural selection, but not among genes as much as a selection among ideas. when “ideas began to meet and mate”, the human race began an upward trajectory that it has still not come down from. The essence of the book, for Ridley, is that the “world will pull out of the current crisis because of the way that markets in goods, services, and ideas allow human beings to exchange and specialize honestly for the betterment of all”.

His first chapter enumerating the ways in which the world is currently a better place to live for the average human being than it has ever been is powerful, and irrefutable. It is also humbling. I will not repeat all of the data here because I want readers of this review to read the book for themselves to find out that the average Botswanan today earns more than the average citizen of Finland did in 1955. I want readers to understand the unbelievable progress that has been made for the poor, not only in the quality of life the poor have today, but also in the shrinking base of people who can be described as such (admittedly, there is much work to be done here). You have to read this chapter to appreciate the drama that is a world population doubling in just fifty years, but with more goods and services available to that population than it has ever had. (I do wonder what the climatologists would say that a car emits less pollution today at full speed than a PARKED CAR did in 1970). When we read of the lifestyle benefits that those we all consider poor today have which Cornelius Vanderbilt never enjoyed, it puts the economic challenges we face in perspective. Ridley knows economics enough to not just make vanilla cultural and sociological statements of fact; he applies these things to economic realities and controversies. For Ridley, the income gap is an “inevitable consequence of an expanding economy”. Indeed, he is right. And he is further right that the “forces which at first make inequality self-accentuating thus later tend to diminish it.”

He also posits an intriguing definition of prosperity which warrants consideration: “The increase in the amount of goods and services you can earn with the same amount of work.” This section should be required reading for Economics students across the land, and especially for Economics professors (I confess to being thrilled at his lambasting of those who favor perpetually rising housing prices via bizarre government manipulation – a short but precious anecdote in the early part of the book). The book provides a sort of history of economic progress combined with a normative understanding of what ought to be in the economic realm. Readers are treated to a deep dive into how economic cooperation came to be, and why that cooperation ought to be. The mutually beneficial exchange that takes place between humans is not only further delineation between us and all other animals, but it is the basis for our advancement since the beginning of civilization. Ridley provides extraordinary support for his position on trust (that it is a prerequisite for a happy and flourishing society), and he explains how trust and trade feed off of each other to make for genuine human progress.

There are a plethora of components to this book that will wow readers. Understanding the explosion in population of cities as a by-product of (a) The technology that made agriculture yield so much better, and (b) The innate desire to TRADE with one another, is brilliant. Even the most rural of economic thinkers will appreciate cities better after reading Ridley on the subject.

His obliteration of the biofuel cult is economically devastating and environmentally powerful. The analogy he makes of coal and electricity and other such loathed sources of energy to slavery – basically, that these energy developments automated countless human efforts, liberating people along the way, is a profound one.

What Ridley gets better than any author I have read, is that while certain “things” in an economy may be finite (a commodity’s supply, the lifeline of a patent, etc.), innovation is not. There is no limit to the innovation in the world, and there is no diminishing return associated therewith. Innovation is the great refutation of pessimism.

Ridley is not just right to criticize pathological pessimism ideologically; the historical case is irrefutable too. Ridley knows, as well, that pathological pessimism nearly always carries an agenda:

“In my own adult lifetime, I have listened to implacable predictions of growing poverty, coming famines, expanding deserts, imminent plagues, impending water wars, inevitable oil exhaustion, mineral shortages, falling sperm counts, thinning ozone, acidifying rain, nuclear winters, mad-cow epidemics, Y2K computer bugs, killer bees, sex-change fish, global warming, ocean acidification, and even asteroid impacts that would presently bring this happy interlude to a terrible end. I cannot recall a time when one or other of these scares was not solemnly espoused by sober, distinguished and serious elites and hysterically echoed by the media. I cannot recall a time when I was not being urged by somebody that the world could only survive if it abandoned the foolish goal of economic growth.”

And so it always is – pathological pessimists are not merely wrong because they are always wrong; they are always wrong because they propose solutions to fabricated problems that are far, far worse than the fabricated problems themselves.

Ridley’s book is frankly merciless on the pessimism movement (he is fond of the term, “apocaholism”). The book struck a chord with me because Ridley does not pull punches in diagnosing the immunity that has been given to the pessimism class when it comes to their abysmal track record.

I am a rational optimist, and I hope all readers of this fine book will be as well. “As long as somewhere somebody is incentivized to invent ways of serving others’ needs better, then the rational optimist must conclude that the betterment of human lives will eventually resume.” I am not interested in the biology of this as much as the spirituality, but I digress. Ridley offers an irrefutable case for optimism, and he does so on a moral plane. “It is precisely because there is still far more suffering and scarcity in the world than I or anybody else with a heart would wish that ambitious optimism is morally mandatory.”

Amen.