The Rational Optimist: How Prosperity Evolves, by Matt Ridley

Matt Ridley is a popular science writer who has written several of my favorite books. The Rational Optimist was written to counter the negativity trend that currently pervades our culture.

There are so many excellent, counter-intuitive ideas in this book that the only way to do them justice is to recommend that you read the book. Although there is considerable room for improvement in this country and around the world, we need to be a "rational optimist" if we are to view the world in an objective light.

Here are some ideas from the book to whet your appetite and to encourage you to read it. My apologies to Ridley for not having room to include the details he provides to backup these claims.

• "Life is getting better -- at an accelerating rate."
• "Since 1800, the population of the world has multiplied six times, yet average life expectancy has more than doubled and real income has risen more than nine times. Taking a shorter perspective, in 2005, compared with 1955, the average human being on Planet Earth earned nearly three times as much money (corrected for inflation), ate one-third more calories of food, buried one-third as many of her children and could expect to live one-third longer."
• "Over that half-century, real income per head ended a little lower in only six countries (Afghanistan, Haiti, Congo, Liveria, Sierra Leone, and Somalia), life expectancy in three (Russia, Swaziland and Zimbabwe), and infant survival in none. In the rest they have rocketed upward."
• Time is the key to prosperity: how long do you have to work to earn a particular good or service. "A three-minute phone call from New York to Los Angeles cost ninety hours of work at the average wage in 1910; today it costs less than two minutes."
• "Ask how much artificial light you can earn with an hour of work at the average wage. The amount has increased from twenty-four lumen hours in 1750 BC (sesame oil lamp) to 186 in 1800 (tallow candle) to 4,400 in 1880 (kerosene lamp) to 531,000 in 1950 (incandescent light bulb) to 8.4 million lumen-hours today (compact fluorescent bulb)."
• Henry Ford got rich by building cheaper cars, reducing the price of the Model-T from $825 to $575 in four years. It took 4,700 hours to afford a Model-T in 1908 and 1,000 hours today to afford a much better vehicle. The "robber baron" Cornelius Vanderbuilt reduced rail fares as he bought out his competition, never raising rates to their former level.
• The key to the abolition of slavery in the developed world was coal, which eliminated the economic incentive. Capitalism eliminated slavery.
• Women's liberation was a direct result of innovations in the home (refrigeration, vacuum cleaners, etc.) in the '50's and '60's that freed women from household drudgery, giving them time to do other things.
• What makes mankind unique in the animal kingdom: opposable thumb, social species, big brains, language, use of tools? Species like octopi, parrots, and other great apes share many of these capabilities. Except for language, none of these are unique and none truly explains mankinds' world dominance. The key is commerce and the interchange of ideas that it promotes.
• Ideas are like genes, and when ideas began to have sex, mankind began to fluorish.

I can't do justice to Ridley's treatment of the importance of energy and technology to life on this planet. Here are just a few ideas.

• Energy anxiety. In 1914, the U.S. Bureau of Mines predicted oil reserves would last 10 years. Jimmy Carter announce in the '70's that we could use up all proven oil reserves in the world by 1990. In 1970 there were 550 billion barrels of oil reserves and between 1970 and 1990, we used 600 billion barrels at which point the known reserves were 900 billion barrels. Sounds like the loaves and fishes.
• "Bad" fossil fuels. When wood was used for energy, we cut down our forests. The Amazon rainforest was being destroyed to support agriculture. Corn has been used to create biofuels. If America converted to biofuels (primarily ethanol), it would need 30 percent more farmland than it currently uses to grow food. If the U.S. converted exclusively to one of these alternative fuels , it would need solar panels the size of Spain or windfarms the size of Kazakhstan or woodland the size of India and Pakistan or hayfields the size of Russa and Canada combined or hydroelectric dams with catchments one-third larger than ALL of the continents combined. Fossil fuels and improvements in technology have allowed us to return land to nature (including stemming the destruction of the Amazon) at significant levels. "If you want to reduce CO2 in the atmosphere, replant a forest on former farmland" (which is what is happening today to the tune of 2 billion acres reclaimed). The simple fact is that fossil fuels are an efficient means of storing energy and do not claim significant land mass.
• Famine and Doom. Required reading for me as a Hopkins undergrad was Limits to Growth, predicting the depletion of oil, tin, copper, and aluminum in our lifetime. Paddock in Famine predicted in 1975 that Haiti, Egypt, and India were beyond saving and should be left to starve. Paul Ehrlich earned a MacArthur genius award for arguing in The Population Bomb (1976) that the 70's and 80's would see hundreds of millions die of starvation and that world population would fall below two billion.
• Feeding 9 billion. Predictions that man would overwhelm the planet are no longer accepted. Current trends indicate that the population will reach 9 billion and begin to recede as it has already begun to do in the developed nations and China. The advent of intensive farming made possible by Borlaug dwarf wheat, nitrogen fertilisers, and fossil fuel farming made it possible to feed the world. Today we farm 38% of the earth's land area rather than the 82% that would have been needed to support current population levels. Without Borlaug and prior innovations in agriculture, we would have run out of land mass to support the current population.
• Pessimism. It's probably human nature to be pessimistic. Our ancestors stayed alive by fearing adversity in order to avoid it. But we must be rational and balance this natural inclination. In today's world, people profit from these fears -- some knowingly. Charities don't raise money by telling us how good the world is. Authors and academics sell books and make their reputation by gloomy predictions. Some politicians enhance their careers by "cleverly" exploiting human nature: "Never waste a good crisis."

These are not just a series of unjustified assertions: in a 400 page book, Ridley provides 60 pages of references for you to reach your own conclusions on his research.

Here are some of my key take-aways.

• Commerce promoted specialization. If I was good at fishing and you were good at making spear heads, I could save labor by using your spear heads in exchange for my fish. This freed up time for me to invent tools, and tool-making tools. No single person on earth today knows how to make a simple wooden pencil.
• Farming was not created to support cities -- just the opposite. Farming was responsible for the creation of capital, which made cities possible. Capital is essentially a means of storing labor.
• Mankind evolved to where it is today through a process similar to the one promoted in "The Cathedral and the Bazaar" -- a largely random process where things that made sense won out over things that weren't successful. For things sufficiently complex, natural selection is smarter than we are. The role of government should be examined, not in a 100 year perspective, but in a 100,000 year perspective.