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The Rational Optimist: How Prosperity Evolves (Book Review)

Pick your favorite scenario for what you think 2100 will look like:

A) Massive natural disasters will have annihilated most major cities. Pollution and toxic waste will have made much of the planet unlivable. Those humans who survived the Earth’s massive calamities will be living in small, sustainable communities, armed to protect themselves against outlaws.

B) We’ll be living miserable, overpopulated, filthy lives under global governmental tyranny. We’ll have to steal or eat squirrels to supplement our meager government rations. We’ll constantly be under surveillance, even in our private lives. We won’t be able to do anything with government permission. Global elites will have built cities apart from the world’s commoners.

C) The world will be more prosperous than ever before. We’ll have avoided massive global warming by uncovering new, sustainable energy sources. Most of us will live in megacities, but will still be able to visit forests, lakes, and other natural resources. We’ll be well-fed, clothed, and safe.

D) Zombies!

In his new book, The Rational Optimist: How Prosperity Evolves, Matt Ridley proves that we’re headed not for calamity or misery. Instead, we’re going to see something like option C. We’ll probably have more food, less disease, more income, a longer lifespan, and better lives in general.

What makes Ridley think that things are getting better? 100,000 years of human history, which he covers in his book. He uses patterns from that span of human existence to illustrate that our capacity to change and adapt will bring us successfully through whatever problems we face. These problems even include collective boogeymen like global warming, economic crashes, and deadly diseases.

Ridley’s Reality

Throughout the course of his 359-page book, Ridley tracks human evolution, from cavemen to the modern Homo Computus, to prove that the world has steadily improved over time for humans. There are two main reasons for this.

1) Trade is good.
Trade, which Ridley defines as the “market process of exchange and specialization,” is ancient. It’s inherently fair, in that it creates changes that benefit everyone.

Over the years, an increase in trade has led to an increase in innovation, improving the quality of life for everyone. Free trade inevitably creates mutual prosperity (protectionism does the opposite).

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2) More specialization and exchange lead to prosperity.
Prosperity is “the increase in the amount of goods or services you can earn with the same amount of work.” Increasing specialization and more exchange are the root cause of innovation.

When exchange, invention, and specialization proliferate, a society “creates” time. As a result of this proliferation, modern people have specialized occupations, but consume hundreds of diverse things. This is the definition of a higher standard of living.

Much of The Rational Optimist comes back to these two main points. Ridley makes a slew of other, smaller points in the process, always using research and historical examples as proof. The following caught me eye:

• Commerce has helped make the “is as good a place for the average human being to live as it ever has been.” Capitalist success, in other words, leads to social improvements. Moreover, Ridley finds that “people get happier as they get richer.” Money does buy “general well-being.”

• Self-sufficiency leads to poverty. This is because bigger, more connected populations innovate more, while smaller, less connected populations tend to regress. Human beings depend on numbers, connections, and trade to succeed. So our nostalgia for farming and sustainability is just that–nostalgia. It doesn’t represent progress.

• City dwellers are better for the ecosystem. Cities house half the world’s people while using less than 3% of global land area. Country dwellers take up more space, use more energy, and impact the environment less.

• Fossil fuels like gas and coal, as well as the machines you use every day, have replaced human labor (slaves) over time. So, in a sense, they are your slaves.

• When the world started relying on fossil fuels for energy, economic growth became sustainable for the first time in history.

The Rational Optimist’s 10 rich chapters include innumerable examples from diverse fields, including anthropology, history, biology, economics, and even Hollywood movies. These examples, as well as Ridley’s own skill as a writer—and occasional cheekiness—make for an entertaining, if highly detailed, read.

Thoughts

The Rational Optimist has all of the elements of my favorite kind of book:

• The author uses studies, research, surveys, and solid evidence to make his claims.

• It covers business and the economy, but with emphasis on human behavior.

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• It takes the long view of humanity, covering around 100,000 years, rather than elaborating on a fad or short period of time.

• It’s entertaining.

Perhaps most importantly, The Rational Optimist challenged me to see things in a new way. For example, Ridley makes the case that although global warming is happening, it’s completely hyped. The net harm from expected global warming will not be as big as the harm being done today by hunger, dirty water, indoor smoke, and malaria, according to Ridley. If the globe indeed warms as much as we expect it will, “it will be because more people are rich enough to afford to do something about it.”

Indeed, Ridley makes a number of points that would be considered biased towards economic conservatism, from an American viewpoint. He supports free trade and thinks all governments (he calls them monopolies) eventually mess up innovation. Yet innovation and open trade are necessary for a country to prosper, so it’s odd that smart people put too much faith in government for no good reason. He is pro-fossil fuel, pro-city, pro-genetically modified foods, and optimistic about humanity in general.

Yet instead of using rhetoric, he employs evidence and centuries of human history to make his points. This is precisely what makes The Rational Optimist so valuable.

Recommended for Some

I welcome new, intelligent perspectives on human life, so I happily devoured The Rational Optimist. Yet I could see Ridley, who isn’t shy about bashing leading thinkers (and especially environmentalist Paul Ehrlich) irking other readers. If you happen to be an extreme environmentalist/liberal/fan of organics, this book might tee you off, depending on how staunch your views are. Ditto if you want something quick and to-the-point, rather than long and detailed.

If you like seeing things debunked, however, pay attention to The Rational Optimist–you might like it. Same if you like reading about human history for hours, if you like having your viewpoints challenged, and if you enjoy laughing out loud on occasion while reading. This has been one of the best economics-related books I’ve read this year, so I do recommend it overall.

Disclosure: We received a free promotion copy of this book.

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