Review – The Rational Optimist

The Rational Optimist: How Prosperity Evolves

by Matt Ridley, published 2011

Why, for the last 300 years, has “everything” been getting better and better in terms of just about any human outcome you can come up with? Human beings are getting better at exchanging ideas and thus generating new and better ideas. In addition, the total stock of life improving ideas humanity can build from is compounding at an increasing rate. The benefits of free exchange extend beyond the economic realm and into the philosophic, and then back again.

The author charts a surprising course through humanity’s shared hunter-gatherer history. He argues that it was economic trade which allowed the division of labor to develop, and the division of labor which allowed for the transition from hunter-gatherer subsistence living to agricultural subsistence, and from there to a compounding of capital and an increasing division of labor and economic specialization that allowed for mankind to finally break free of the Malthusian trap in many parts of the globe (and more every year).

In addition, he says we are never going back. The genie is out of the bottle and rather than the division of labor being fragile, it is far more robust than any social structure yet experienced and gets stronger the more specialized it becomes.

Because of this, and because when surveying history up to this point in the broadest terms possible there is evidence of things getting better and better for more and more people, not the opposite, the author concludes that the rational thing is to be an optimist and expect this trend to continue.

There are several convenient leaps of logic built off flimsy premises that would startle and upset an opponent of markets and industrialized societies, but there is such a preponderance of hard logic and even harder evidence that there isn’t enough here to tip over the apple cart. But the value of this book is less in its rhetorical force for free markets and industrial development and more in its sweeping survey of a number of seemingly unrelated historical data and economic phenomena into a coherent picture of hopefulness about humanity’s future. I found myself joyfully surprised by the idea that in the chicken-egg quandry of agriculture and trade, the author contends that trade came first and produced all the surplus we moderns have enjoyed since then.

Going “back to the land” or seeking out de-urbanized, atomized communities seem to be doomed to bring their proponents a lower standard of living overall, idealizing a past reality that never actually existed or rejecting the very thing (the division of labor) which is necessary to enjoying a desirable standard of living with modern securities and comforts.

A Future Full of Urban Gulches

Zach Caceres over at Let A Thousand Nations Bloom has penned a rebuttal to a critic, called “In Defense of Urban Life“:

Urban life brings people together for mutual aid, and it opens wealth-generating possibilities for specialization and trade. It can integrate otherwise contentious groups, and it melds culture together to bring about beautiful new hybrids of music and art. We shouldn’t write off cities because of a romanticized ideal of the pastoral.

Indeed. There’s more and it’s a good, brief apologia for the urban environment versus the un-urban (suburbia, rural, pastoral, wilderness) in terms of satisfying human needs and lifestyle preferences. He touched on it briefly but I believe it bears further emphasizing, much of the problems his critic and those like him cite about urban environments are caused by central planning and non-market regulation.

Pollution, economic exploitation, environmental degradation and destruction (a poorly defined term for an ill-premised concept, but even accepted at its face in this situation it makes some sense), resource “overuse”, all of these problems are caused by undefined or poorly defined property rights and arbitrary interference and dictates from governments and other political, non-market institutions.

The solution to society’s economic ills are free markets. And the solution to society’s habitat ills are free cities. More of the current paradigm of Ponzi city construction based upon uneconomic, unproductive government infrastructure, city service and land-use planning will surely doom us all. But free cities, organized voluntarily by the participants and outcomes of local and international free markets, are just as surely the salvation, offering nearly limitless density, technological innovation, economic opportunity and variety in lifestyle.

Imagine the high rise urban wonderland of New York City meeting the honesty, productivity and heroic excellence of Galt’s Gulch.

That’s the way forward.