The Rational Optimist (P.S.)

by Matt Ridley

Yet as soon as Greece was unified into an empire by a thug – Philip of Macedon in 338 BC – it lost its edge. Had his son Alexander’s empire lasted, it would undoubtedly have become as commercially and intellectually inert as its Persian predecessor. But because the empire fragmented on Alexander’s death, parts of it were reborn as independent city states that lived off trade, most notably Alexandria in Egypt, which reached a third of a million people living in a state of famous wealth under the comparatively benign rule of the book-collecting Ptolemy III. That wealth was based on new roads to bring cash crops of cotton, wine, grain and papyrus within reach of the river Nile for export. This is not to say that democratic city states are the only places where economic progress can occur, but it is to discern a pattern. Plainly, there is something beneficial to the growth of the division of labour when governments are limited (though not so weak that there is widespread piracy), republican or fragmented. The chief reason is surely that strong governments are, by definition, monopolies and monopolies always grow complacent, stagnant and self-serving. Monarchs love monopolies because where they cannot keep them to themselves, they can sell them, grant them to favourites and tax them. They also fall for the perpetual fallacy that they can make business work more efficiently if they plan it rather than allow and encourage it to evolve. The scientist and historian Terence Kealey p...