The Rational Optimist: How Prosperity Evolves

by Matt Ridley

Just as the hand that held the hand axe was the same shape as the hand that holds the mouse, so people always have and always will seek food, desire sex, care for offspring, compete for status and avoid pain just like any other animal.

They do not experience agricultural, urban, commercial, industrial and information revolutions, let alone Renaissances, Reformations, Depressions, Demographic Transitions, civil wars, cold wars, culture wars and credit crunches.

‘The human being is the only animal that…’ Language, cognitive reasoning, fire, cooking, tool making, self-awareness, deception, imitation, art, religion, opposable thumbs, throwing weapons, upright stance, grandparental care – the list of features suggested as unique to human beings is long indeed.

‘We may call it social evolution when an invention quietly spreads through imitation.’

The evolutionary biologist Richard Dawkins in 1976 coined the term ‘meme’ for a unit of cultural imitation.

The answer, I believe, is that at some point in human history, ideas began to meet and mate, to have sex with each other.

Northern Rock, one of many banks that ran short of liquidity during the crisis.

The experience has left me mistrustful of markets in capital and assets, yet passionately in favour of markets in goods and services.

can run, ways of communicating farther than you can shout. Even allowing for the hundreds of millions who still live in abject poverty, disease and want, this generation of human beings has access to more calories, watts, lumen-hours, square feet, gigabytes, megahertz, light-years, nanometres, bushels per acre, miles per gallon, food miles, air miles, and of course dollars than any that went before. They have more Velcro, vaccines, vitamins, shoes, singers, soap operas, mango slicers, sexual partners, tennis rackets, guided missiles and anything else they could even imagine needing. By one estimate, the number of different products that you can buy in New York or London tops ten billion. This should not need saying, but it does. There are people today who think life was better in the past.

Oh please! Though this is one of the better-off families in the village, father’s Scripture reading is interrupted by a bronchitic cough that presages the pneumonia that will kill him at 53 – not helped by the wood smoke of the fire. (He is lucky: life expectancy even in England was less than 40 in 1800.) The baby will die of the smallpox that is now causing him to cry; his sister will soon be the chattel of a drunken husband. The water the son is pouring tastes of the cows that drink from the brook. Toothache tortures the mother. The neighbour’s lodger is getting the other girl pregnant in the hayshed even now and her child will be sent to an orphanage. The stew is grey and gristly yet meat is a rare change from gruel; there is no fruit or salad at this season. It is eaten with a wooden spoon from a wooden bowl. Candles cost too much, so firelight is all there is to see by. Nobody in the family has ever seen a play, painted a picture or heard a piano. School is a few years of dull Latin taught by a bigoted martinet at the vicarage. Father visited the city once, but the travel cost him a week’s wages and the others have never travelled more than fifteen miles from home. Each daughter owns two wool dresses, two linen shirts and one pair of shoes. Father’s jacket cost him a month’s wages but is now infested with lice. The children sleep two to a bed on straw mattresses on the floor. As for the bird outside the window, tomorrow it will be trapped and eaten by the boy.

The percentage living in such absolute poverty has dropped by more than half – to less than 18 per cent. That 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 compression of morbidity’ is the technical term. People are not only spending a longer time living, but a shorter time dying.

Oxford concluded that the incidence of stroke would increase by nearly 30 per cent over the next two decades, mainly because stroke incidence increases with age and people were predicted to live longer. They did live longer but the incidence of stroke in fact fell by 30 per cent.

You can, of course, argue that IQ may not be truly representative of intelligence, but you cannot argue that something is getting better – and more equal at the same time.

have been enjoying such abundance that most of the things they need have been getting steadily cheaper. The four most basic human needs – food, clothing, fuel and shelter

The amount has increased from twenty-four lumen-hours in 1750 BC (sesame oil lamp) to 186 in 1800 (tallow candle) to 4,400 in 1880 (kerosene lamp) to 531,000 in 1950 (incandescent light bulb) to 8.4 million lumen-hours today (compact fluorescent bulb).

The true measure of something’s worth is the hours it takes to acquire it. If you have to acquire it for yourself, it usually takes longer than if you get it ready-made by other people. And if you can get it made efficiently by others, then you can afford more of it. As light became cheaper so people used more of it. The average Briton today consumes roughly 40,000 times as much artificial light as he did in 1750. He consumes fifty times as much power and 250 times as much transport (measured in passenger-miles travelled), too. This is what prosperity is: the increase in the amount of goods or services you can earn with the same amount of work. As late as the mid-1800s, a stagecoach journey from Paris to Bordeaux cost the equivalent of a clerk’s monthly wages; today the journey costs a day or so and is fifty times as fast.

Andrew Carnegie, while enormously enriching himself, cut the price of a steel rail by 75 per cent in the same period; John D. Rockefeller cut the price of oil by 80 per cent. During those thirty years, the per capita GDP of Americans rose by 66 per cent.

Henry Ford got rich by making cars cheap. His first Model T sold for $825, unprecedentedly cheap at the time, and four years later he had cut the price to $575.

If you choose to spend that spare time consuming somebody else’s production then you can enrich him in turn; if you choose to spend it producing for his consumption then you have also further enriched yourself.

Housing, too, is itching to get cheaper, but for confused reasons governments go to great lengths to prevent it. Where it took sixteen weeks to earn the price of 100 square feet of housing in 1956, now it takes fourteen weeks and the housing is of better quality. But given the ease with which modern machinery can assemble a house, the price should have come down much faster than that. Governments prevent this by, first, using planning or zoning laws to restrict supply (especially in Britain); second, using the tax system to encourage mortgage borrowing (in the United States at least – no longer in Britain); and third, doing all they can to stop property prices falling after a bubble. The effect of these measures is to make life harder for those who do not yet have a house and massively reward those who do. To remedy this, governments then have to enforce the building of more affordable housing, or subsidise mortgage lending to the poor.

Of course, it is possible to get rich and find that you are unhappy not to be richer still, if only because the neighbour – or the people on television – are richer than you are. Economists call this the ‘hedonic treadmill’; the rest of us call it ‘keeping up with the Joneses’.

a million years of natural selection shaped human nature to be ambitious to rear successful children, not to settle for contentment: people are programmed to desire, not to appreciate.

Until he was rumbled in 2008, Bernard Madoff offered his investors high and steady returns of more than 1 per cent a month on their money for thirty years. He did so by paying new investors’ capital out to old investors as revenue, a chain-letter con trick that could not last. When the music stopped, $65 billion of investors’ funds had been looted. It was roughly what John Law did in Paris with the Mississippi Company in 1719, what John Blunt did in London with the South Sea company in 1720, what Charles Ponzi did in Boston in 1920 with reply coupons for postage stamps, what Ken Lay did with Enron’s stock in 2001.

By the same age, human hunter-gatherers have consumed about 20 per cent of their lifetime calories, but produced just 4 per cent.

Every day you must get up in the morning and supply yourself entirely from your own resources. How would you spend your day? The top four priorities would be food, fuel, clothing and shelter. Dig the garden, feed the pig, fetch water from the brook, gather wood from the forest, wash some potatoes, light a fire (no matches), cook lunch, repair the roof, fetch fresh bracken for clean bedding, whittle a needle, spin some thread, sew leather for shoes, wash in the stream, fashion a pot out of clay, catch and cook a chicken for dinner. No candle or book for reading. No time for smelting metal, drilling oil, or travel.

So one way to raise your standard of living would be to lower somebody else’s: buy a slave. That was indeed how people got rich for thousands of years.

In 1900, the average American spent $76 of every $100 on food, clothing and shelter. Today he spends $37.

Thomas Thwaites set out to make his own toaster, of the sort that he could buy from a shop for about £4. He needed only a few raw materials: iron, copper, nickel, plastic and mica (an insulating mineral around which the heating elements are wrapped). But even to get these he found almost impossible. Iron is made from iron ore, which he could probably mine, but how was he to build a sufficiently hot furnace without electric bellows? (He cheated and used a microwave oven.) Plastic is made from oil, which he could not easily drill for himself, let alone refine. And so on. More to the point, the project took months, cost a lot of money and resulted in an inferior product. Yet to buy a £4 toaster would cost him less than an hour’s work at the minimum wage.

In the two hours since I got out of bed I have showered in water heated by North Sea gas, shaved using an American razor running on electricity made from British coal, eaten a slice of bread made from French wheat, spread with New Zealand butter and Spanish marmalade, then brewed a cup of tea using leaves grown in Sri Lanka, dressed myself in clothes of Indian cotton and Australian wool, with shoes of Chinese leather and Malaysian rubber, and read a newspaper made from Finnish wood pulp and Chinese ink. I am now sitting at a desk typing on a Thai plastic keyboard (which perhaps began life in an Arab oil well) in order to move electrons through a Korean silicon chip and some wires of Chilean copper to display text on a computer designed and manufactured by an American firm. I have consumed goods and services from dozens of countries already this morning.

They gave me what I wanted just when I wanted it – as if I were the Roi Soleil, Louis XIV, at Versailles in 1700.

The Sun King had dinner each night alone. He chose from forty dishes, served on gold and silver plate. It took a staggering 498 people to prepare each meal. He was rich because he consumed the work of other people,

You may have no chefs, but you can decide on a whim to choose between scores of nearby bistros, or Italian, Chinese, Japanese or Indian restaurants, in each of which a team of skilled chefs is waiting to serve your family at less than an hour’s notice. Think of this: never before this generation has the average person been able to afford to have somebody else prepare his meals.

My point is that you have far, far more than 498 servants at your immediate beck and call.

In the year 2005, if you were the average consumer you would have spent your after-tax income in roughly the following way: 20 per cent on a roof over your head 18 per cent on cars, planes, fuel and all other forms of transport 16 per cent on household stuff: chairs, refrigerators, telephones, electricity, water 14 per cent on food, drink, restaurants etc 6 per cent on health care 5 per cent on movies, music and all entertainment 4 per cent on clothing of all kinds 2 per cent on education 1 per cent on soap, lipstick, haircuts, and such like 11 per cent on life insurance and pensions (i.e., saved to secure future spending) and, alas from my point of view, only 0.3 per cent on reading An English farm labourer in the 1790s spent his wages roughly as follows: 75 per cent on food 10 per cent on clothing and bedding 6 per cent on housing 5 per cent on heating 4 per cent on light and soap A rural peasant woman in modern Malawi spends her time roughly as follows: 35 per cent farming food 33 per cent cooking, doing laundry and cleaning 17 per cent fetching water 5 per cent collecting firewood 9 per cent other kinds of work, including paid employment

Imagine next time you turn on the tap, what it must be like to walk a mile or more to the Shire River in Machinga province, hope you are not grabbed by a crocodile when filling your bucket (the UN estimates three crocodile deaths a month in the Machinga province, many of them of women fetching water), hope you have not picked up a cholera dose in your bucket, then walk back carrying the 20 litres that will have to last your family all day. I am not trying to make you feel guilty: I am trying to tease out what it is that makes you well off.

Or suppose your local wheat farmer tells you that last year’s rains means he will have to cut his flour delivery in half this year. You will have to go hungry. Instead, you benefit from a global laptop and wheat market in which somebody somewhere has something to sell you so there are rarely shortages, only modest price fluctuations.

It was allegedly a young Chinese imperial concubine in 2600 bc who thought up the following recipe for rearranging beta pleated sheets of glycine-rich polypeptides into fine fabrics: take a moth caterpillar, feed it mulberry leaves for a month, let it spin a cocoon, heat it to kill it, put the cocoon in water to unstick the silk threads, carefully draw out the single kilometre-long thread from which the cocoon is made by reeling it on to a wheel, spin the thread and weave a fabric. Then dye, cut and sew, advertise and sell for cash. Rough guide on quantities: it takes about ten pounds of mulberry leaves to make 100 silkworm cocoons to make one necktie.

Some anthropologists argue that in east Africa and Ethiopia the toolkit was showing signs of change as early as 285,000 years ago. Certainly, by at least 160,000 years ago a new, small-faced ‘sapiens’ skull was being worn on the top of the spine in Ethiopia. Around the same time at Pinnacle Point in South Africa, people – yes, I shall call them people for the first time – were cooking mussels and other shellfish in a cave close to the sea as well as making primitive ‘bladelets’, small flakes of sharp stone, probably for hafting on to spears. They were also using red ochre, perhaps for decoration, implying thoroughly modern symbolic minds.

living in large social groups on a plentiful diet both encourages and allows brain growth.

it even looked as if two candidate mutations of the right age had appeared – in the gene called FOXP2, which is essential to speech and language in both people and songbirds. Adding these two mutations to mice does indeed seem to change the flexibility of wiring in their brain in a way that may be necessary for the rapid flicker of tongue and lung that is called speech,

The appeal to a genetic change driving evolution gets gene-culture co-evolution backwards: it is a top-down explanation for a bottom-up process.

Human beings had started to do something to and with each other that in effect began to build a collective intelligence. They had started, for the very first time, to exchange things between unrelated, unmarried individuals; to share, swap, barter and trade.

In most hunter-gatherers, women spend long hours gathering, preparing and cooking staple foods while men are out hunting for delicacies. There is, incidentally, no hunter-gatherer society that dispenses with cooking. Cooking is the most female-biased of all activities, the only exceptions being when men prepare some ritual feasts or grill a few snacks while out on the hunt. (Does this ring any modern bells? Fancy chefs and barbecuing are the two most masculine forms of cooking today.)

cooking encourages specialisation by sex. The first and deepest division of labour is the sexual one. It is an iron rule documented in virtually all foraging people that ‘men hunt, women and children gather’.

otherwise they leave their husbands, marry elsewhere or make love to other men.’

Just to be clear, this argument has nothing to do with the notion that ‘a woman’s place is in the home’ while men go out to work. Women work hard in hunter-gatherer societies, often harder than men. Neither gathering nor hunting is especially good evolutionary preparation for sitting at a desk answering the telephone.

collecting different foods and sharing them is something no other species does. It is a habit that put an end to self-sufficiency long ago and that got our ancestors into the habit of exchange.

shells, fossil coral, steatite, jet, lignite, hematite, and pyrite were used to make ornaments and objects. A flute made from the bone of a vulture

At Mezherich, in what is now Ukraine, 18,000 years ago, jewellery made of shells from the Black Sea and amber from the Baltic implied trade over hundreds of miles.