The Rational Optimist: How Prosperity Evolves

by Matt Ridley

Yet surveys consistently reveal individuals to be personally optimistic yet socially pessimistic.

As the average age of a country’s population rises, so people get more and more neophobic and gloomy. There is immense vested interest in pessimism, too. No charity ever raised money for its cause by saying things are getting better. No journalist ever got the front page by telling his editor that he wanted to write a story about how disaster was now less likely. Good news is no news, so the media megaphone is at the disposal of any politician, journalist or activist who can plausibly warn of a coming disaster. As a result, pressure groups and their customers in the media

But pessimism is not without its cost. If you teach children that things can only get worse, they will do less to make it untrue. I was a teenager in Britain in the 1970s, when every newspaper I read told me not just that oil was running out, a chemical cancer epidemic was on the way, food was growing scarce and an ice age was coming, but that my own country’s relative economic decline was inevitable and its absolute decline probable. The sudden burst of prosperity and accelerating growth that Britain experienced in the 1980s and 1990s, not to mention the improvements in health, lifespan and the environment, came as quite a shock to me.

This is no surprise. As the evolutionary biologist Paul Ewald has long argued, viruses undergo natural selection as well as mutation once established in a new species of host and casually transmitted viruses like flu replicate more successfully if they cause mild disease, so that the host keeps moving about and meeting new people.

If this is so, why then did H1N1 flu kill perhaps fifty million people in 1918? Ewald and others think the explanation lies in the trenches of the First World War. So many wounded soldiers, in such crowded conditions, provided a habitat ideally suited to more virulent behaviour by the virus: people could pass on the virus while dying.

This is much the same explanation for why England had a good eighteenth century while China did not.

In Cairo it would take seventy-seven bureaucratic procedures involving thirty-one agencies and up to fourteen years to acquire and register a plot of state-owned land on which to build a house. No wonder nearly five million Egyptians have decided to build illegal dwellings instead.

Typically, a Cairo house owner will build up to three illegal storeys on top of his house and rent them out to relatives.

Property rights are not a silver bullet. In some countries, their formalisation simply creates a rentier class. And China experienced an explosion of enterprise after 1978 without ever giving its people truly secure property rights. But it did allow people to start businesses with relatively little bureaucratic fuss, so another of De Soto’s recommendations is to free up the rules governing business. Whereas it takes a handful of steps to set up a company in America or Europe, De Soto’s assistants found that to do the same in Tanzania would take 379 days and cost $5,506. Worse, to have a normal business career in Tanzania for fifty years, you would have to spend more than a thousand days in government offices petitioning for permits of one kind or another and spending $180,000 on them.

That does not mean they are governed by no rules: far from it. De Soto’s study found thousands of examples of documents being used by people on the ground to attest ownership, record loans, embody contracts and settle disputes. Handwritten papers, sometimes signed with thumbprints, are being drafted, witnessed, stamped, revised, filed and adjudicated all over the country. Just as Europeans did before the formal law gradually ‘nationalised’ their indigenous customs, Tanzanians are evolving a system of self-organised

Once two individuals find ways to divide labour between them, both are better off. The future for Africa lies in trade – in selling tea, coffee, sugar, rice, beef, cashews, cotton, oil, bauxite, chrome, gold, diamonds, cut flowers, green beans, mangoes and more – but it is almost impossible for poor Africans in the informal economy to be entrepreneurs in such international trade.

The point I am making is not that one prediction proved wrong, but that the glass was half empty in both cases. Cooling and warming were both predicted to be disastrous, which implies that only the existing temperature is perfect. Yet climate has always varied; it is a special sort of narcissism to believe that only the recent climate is perfect. (The answer by the way is that the first one was a recent warning about warming; the second an old warning about cooling – both are from Newsweek.)

slow average temperature changes are more compatible with a low-sensitivity than a high-sensitivity model of greenhouse warming; that clouds may slow the warming as much as water vapour may amplify it; that the increase in methane has been (erratically) decelerating for twenty years; that there were warmer periods in earth’s history in medieval times and about 6,000 years ago yet no accelerations or ‘tipping points’ were reached; and that humanity and nature survived much faster warming lurches in climate during the ice ages than anything predicted for this century.

The global food supply will probably increase if temperature rises by up to 3°C. Not only will the warmth improve yields from cold lands and the rainfall improve yields from some dry lands, but the increased carbon dioxide will itself enhance yields, especially in dry areas. Wheat, for example, grows 15–40 per cent faster in 600 parts per million of carbon dioxide than it does in 295 ppm. (Glasshouses often use air enriched in carbon dioxide to 1,000 ppm to enhance plant growth rates.)

The four horsemen of the human apocalypse, which cause the most premature and avoidable death in poor countries, are and will be for many years the same: hunger, dirty water, indoor smoke and malaria, which kill respectively about seven, three, three and two people per minute

Economists estimate that a dollar spent on mitigating climate change brings

ninety cents of benefits compared with $20 benefits per dollar spent on healthcare and $16 per dollar spent on hunger. Keeping climate at 1990 levels, assuming it could be done, would leave more than 90 per cent of human mortality causes untouched.

The polar bear, still thriving today (eleven of thirteen populations are growing or steady) but threatened by the loss of Arctic sea ice in high summer, may contract its range further north, but it already adapts to ice-free summer months in Hudson’s Bay by fasting on land till the sea re-freezes; and there is good evidence from northern Greenland of a briefly almost ice-free summer sea in the Arctic about 5,500 years ago, during a period that was markedly warmer than today. Arguably, the orang-utan, being devastated by the loss of forest to palm oil bio-fuel plantations in Borneo, is under greater threat from renewable energy than the polar bear is from global warming.

habitat loss, pollution, invasive competitors and hunting being the same four horsemen of the ecological apocalypse as always. Suddenly many of the big environmental organisations have lost interest in these threats as they chase the illusion of stabilising a climate that was never stable in the past. It is as if the recent emphasis on climate change has sucked the oxygen from the conservation movement. Conservationists, who have done tremendous good over the past half-century protecting and restoring a few wild ecosystems, and encouraging local people to support and value them, risk being betrayed by the new politicised climate campaigners, whose passion for renewable energy is eating into those very ecosystems and drawing funds away from their efforts.

In short, a warmer and richer world will be more likely to improve the well-being of both human beings and ecosystems than a cooler but poorer one. As Indur Goklany puts it, ‘neither on grounds of public health nor on ecological factors is climate change likely to be the most important problem facing the globe this century.’

Remember I am not here attempting to resolve the climate debate, nor saying that catastrophe is impossible. I am testing my optimism against the facts, and what I find is that the probability of rapid and severe climate change is small; the probability of net harm from the most likely climate change is small; the probability that no adaptation will occur is small; and the probability of no new low-carbon energy technologies emerging in the long run is small. Multiply those small probabilities together and the probability of a prosperous twenty-first century is therefore by definition large. You can argue about just how large, and therefore about how much needs to be spent on precaution; but you cannot on the IPCC’s figures make it anything other than very probable that the world will be abetter place in 2100 than it is today.

Somewhere in Africa more than 100,000 years ago, a phenomenon new to the planet was born. A Species began to add to its habits, generation by generation, without (much) changing its genes. What made this possible was exchange, the swapping of things and services between individuals. This gave the Species an external, collective intelligence far greater than anything it could hold in its admittedly capacious brain. Two individuals could each have two tools or two ideas while each knowing how to make only one. Ten individuals could know between them ten things, while each understanding one. In this way exchange encouraged specialisation, which further increased the number of different habits the Species could have, while shrinking the number of things that each individual knew how to make. Consumption could grow more diversified, while production grew more specialised. At first, the progressive expansion of the Species’ culture was slow, because it was limited by the size of each connected population. Isolation on an island or devastation by a famine could reduce the population and so diminish its collective intelligence. Bit by bit, however, the Species expanded both in numbers and in prosperity. The more habits it acquired, the more niches it could occupy and the more individuals it could support. The more individuals it could support, the more habits it could acquire. The more habits it acquired, the more niches it could create. The cultural progress of the Species encoun...

Around 10,000 years ago, the pace of the Species’ progress leapt suddenly ahead thanks to the suddenly greater stability of the climate, which allowed the Species to co-opt other species and enable them to evolve into exchange-and-specialise partners, generating services for the Species in exchange for their needs. Now, thanks to farming, each individual had not only other members of the Species working for her (and vice versa), but members of other species as well, such as cows and corn. Around 200 years ago, the pace of change quickened again thanks to the Species’ new ability to recruit extinct species to its service as well, through the mining of fossil fuels and the releasing of their energy in ways that generated still more services. By now the Species was the dominant large animal on its planet and was suddenly experiencing rapidly rising living standards because of falling birth rates. Parasites plagued it still – starting wars, demanding obedience, building bureaucracies, committing frauds, preaching schisms – but the exchange and specialisation continued, and the collective intelligence of the Species reached unprecedented levels. By now almost the entire world was connected by a web so that ideas from everywhere could meet and mate. The pace of progress picked up once more. The future of the Species was bright, though it did not know it.

nationalism bought power at the expense of a parasitic military; socialism bought equality at the price of a parasitic bureaucracy; capitalism bought efficiency at the price of parasitic financiers. The online world will attract parasites too: from regulators and cyber-criminals to hackers and plagiarists. Some of them may temporarily throttle their generous hosts.

Take the twelfth century as an example of how close the world once came to turning its back on the catallaxy. In one fifty-year period, between 1100 and 1150, three great nations shut down innovation, enterprise and freedom all at once. In Baghdad, the religious teacher Al-Ghazali almost single-handedly destroyed the tradition of rational enquiry in the Arab world and led a return to mysticism intolerant of new thinking. In Peking, Su-Sung’s astronomical clock, the ‘cosmic engine’, probably the most sophisticated mechanical device ever built at that date, was destroyed by a politician suspicious of novelty and (t)reason,