Matt Ridley

The Rational Optimist: How Prosperity Evolves

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The Rational Optimist: How Prosperity Evolves Summary

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In his popular science non-fiction book The Rational Optimist: How Prosperity Evolves (2010), British businessperson Matt Ridley posits that the exchange of goods and services in a capitalist system is a natural result of human biology and the foundation on which society is built. While a number of academics and business titans, including Bill Gates and Ricardo Salinas Pliego, have showered praise on the book, others have called into question some of Ridley’s assumptions, particularly as they relate to wealth inequality and climate change.

In large part, Ridley frames his argument as a historical tract, beginning with some of the earliest groups of traders and tracking the evolution of markets all the way up to the Information Age. Ridley posits that as long as 18,000 years ago, early Ukrainians traded Black Sea shells and Baltic amber that would be used for beads, buttons, pendants, rings, and figurines. He also writes at length about the Phoenician civilization, which around 1500 B.C., became known as a major clothing export economy, famous for its Tyrian purple dye made from mucus secreted by the murex mollusk.

His argument that trade is a natural consequence of human behavior is further bolstered by the observation that Homo erectus, one of humanity’s predecessors, lacked an appetite for trade and was, therefore, stuck making the same stone axes with precisely the same design for roughly one million years. Conversely, it only took the trade-happy Homo sapiens species 100,000 years to build massive civilizations and tiny handheld computers that communicate with one another through signals beamed from space.

Ridley also explores the opening up of trade routes between Asia and Europe in the wake of the Roman conquest of Egypt in 30 B.C. Later known as the Silk Road, these trade routes which stretched from Eastern China to Southern Europe are framed here as an early form of globalization. The flow of goods between East and West was stymied at times over the next 1,200 years due to shifting political alliances and toppled empires. However, they were greatly expanded and stabilized during the thirteenth century thanks to Genghis Khan and the Mongol Empire. As a nomadic and pastoral civilization that cultivated little aside from its livestock herds, the Mongols relied heavily on trade, therefore offering protection to traveling merchants. This stability allowed the Venetian explorer and merchant Marco Polo to become one of the earliest Europeans to travel the Silk Road all the way to China.

The Mongols are a particularly useful example for Ridley because they support one of the author’s key arguments: specialization leads to economic expansion and technological innovation. While the Mongols neither farmed nor built glittering cities, they were exceptionally accomplished warriors. They utilized their warrior spirit to help other specialists, such as cloth-spinners and other artisans, to trade their goods with one another, transactions facilitated by yet another group of specialists, the merchant class. Spreading the global reach of their wares also facilitated a spread of ideas between East and West, resulting in a greater potential for innovation.

Ridley uses the metaphor of fornication to describe the innovation that results from specialization. “Ideas have sex,” he writes, citing the Internet as an example of the bastard son of the telephone and the computer. Ridley goes on to cite other examples of how trade and specialization are the key drivers of human progress. “It is a reasonable guess,” Ridley writes, “that one of the pressures to invent agriculture was to feed and profit from wealthy traders.”

As Ridley’s historical narrative moves closer to the contemporary era, his arguments are more targeted, taking aim at environmentalist doomsayers and free-market skeptics who doubt whether humanity’s continued observance of the capitalist faith is a good thing for America and the world. He asserts that despite the outlook of pessimists, human life expectancy is up one-third globally over the past fifty years. Meanwhile, plummeting birth rates and continued economic growth have caused the standard of living to rise all over the planet, even if the ever-worsening wealth gap remains high. And while the excesses of certain industries, such as banking in the years before the Great Recession, are troubling, to Ridley they are acceptable trade-offs for a world where the opportunity for prosperity has never been higher.

His antipathy toward state regulations on trade extends to the topic of climate change. While Ridley neither dismisses nor disputes the evidence that climate change is the direct result of human industry, he professes an unwavering faith that global innovation is up to the challenge, but only if it is allowed to progress on its own as it has throughout human history without undue government intervention. This argument ignores the fact that the government already intervenes on behalf of some of the most environmentally-harmful companies on the planet through various forms of corporate welfare. With that in mind, perhaps a correction is needed, even if it offends Ridley’s free-market sensitivities.

While many critics have found fault in Ridley’s arguments pertaining to the modern era and the future, his exploration of the history of trade is undeniably fascinating.