March 20, 2012

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What is a Rational Optimist? I’m Not Sure, But I Think I Just Became One.

the rational optimist

Lately, the books I’ve read have had a very negative bent. They lament the downward spiral of American culture. They point out economic chaos and systemic problems in our government. I turn on the news and I hear the same kind of thing. Our rights are disappearing. Our currency is devalued. Our relevance is waning. But it’s never quite turned me into a pessimist. I’ve never been able to reconcile all the positive things I see and experience with all I’m told I should fear and regret.

Recently I came across a book that has made the case that not only are things not as bad as we think they are, but that we are living in the most prosperous time in human history. It’s called the Rational Optimist, written by Matt Ridley.

Ridley pulls from the works of Adam Smith and Charles Darwin and illustrates how human society has had a long history of evolution and exchange of ideas. This exchange has had a cumulative effect to move civilization forward. And we aren’t slowing down anytime soon. It is a very broad book and covers everything from evolution and farming to population and climate change.

I’ve highlighted 5 points(among many) of the book that I think are worth sharing. My hope is that you will check it out for yourself and make your own conclusions.

1. We ARE better off than we were 50 years ago. And by “we” I mean the vast majority of people on this planet.

… the vast majority of people are much better fed, much better sheltered, much better entertained, much better protected against disease and much more likely to live to old age than their ancestors have ever been.

The percentage living in such absolute poverty has dropped by more than half – to less than 18 per cent. The number is, of course, still all too horribly high, but the trend is hardly a cause for despair: at the current rate of decline, it would hit zero around 2035 – though it probably won’t. The United Nations estimates that poverty was reduced more in the last fifty years than in the previous 500.

2. Specialization and exchange have done more to spur on our development than anything else in history. At some point, our primitive ancestors figured out that by one guy making spears really well and another guy hunting really well, they both could focus on what they were exceedingly good at and trade spears for meat for the benefit of both. In the end, they were both enriched by it.

Even those who have several paying jobs – say, freelance short story writer/neuroscientist, or computer executive/photographer – have only two or three different occupations at most. But they each consume hundreds, thousands of things. This is the diagnostic feature of modern life, the very definition of a high standard of living: diverse consumption, simplified production. Make one thing, use lots.

3. Government is integral to our progress but not the source of our progress. People often mistake the two.

Companies have a far shorter half-life than government agencies. Half of the biggest American companies of 1980 have now disappeared by take-over or bankruptcy; half of today’s biggest companies did not even exist in 1980. The same is not true of government monopolies: the Internal Revenue Service and the National Health Service will not die, however much incompetence they might display. yet most anti-corporate activists have faith in the good will of the leviathans that can force you to do business with them, but are suspicious of the behemoths that have to beg for your business. I find that odd.

Empires, indeed governments generally, tend to be good things at first and bad things the longer they last … they kill the goose that lays the golden eggs.

4. Despite this belief that markets and services are good, the motivations and structures around innovation are changing towards individuals and their inventions. Their motivations will not always be primarily about profit.

… we may soon be living in a post-capitalist, post-corporate world, where individuals are free to come together in temporary aggregations to share, collaborate and innovate, where websites enable people to find employers, employees, customers and clients anywhere in the world. The world is turning bottom-up again; the top-down years are coming to an end.

5. Pessimism simply serves no purpose. So why do we humor it?

The pessimists’ mistake is extrapolationism: assuming that the future is just a bigger version of the past.

It is a common trick to forecast the future on the assumption of no technological change, and find it dire. This is not wrong. The future would indeed be dire if invention and discovery ceased. As Paul Romer puts it: ‘Every generation has perceived the limits to growth that finite resources and undesirable side effects would pose if no new recipes or ideas were discovered. And every generation has underestimated the potential for finding new recipes and ideas. We consistently fail to grasp how many ideas remain to be discovered.’

I think that is the point. Not only do the numbers in the book make a very good case that our fears are often unrealized. Our fears are always based on what we think we know. That’s not to say we don’t have problems that we should strive to solve. There are two billion people alive today who have never turned on a light switch. There is still poverty. There are still dangers to our health and environment that will be amplified if we don’t make smart decisions.

It’s all about perspective. Something that’s in short supply these days. This book has changed my perspective. Will it change yours?

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