Saturday, July 28, 2012

185. The Rational Optimist - How Prosperity Evolves by Matt Ridley


For far too often people have had only apocalyptic forecasts for the world using variables of the time such as food production and energy sources; however, technology and innovation have proved to be our saving grace, shattering any prophecy of doom before it could materialise. Besides, people have shown to be resilience and have bounced back from the Great Depression and the Phytophthora famine. In Matt Ridley's book, The Rational Optimist - How Prosperity Evolves (Harper Perennial 2010; 453), he challenges these popular views that has become the accepted trend since man arrived on this planet to date. Using statistics and science he shows that the world today has lower rates of all vices and higher rates of all virtues.

By providing figures, he argues that trade is the major driver of economic development and prosperity and not government; according to him governments almost always stifle development. He seemingly lean towards the idea of globalisation. He challenges popular views that Africa could never come out of its impoverished state and Climate Change will destroy the world. Through this he pointed at some of conclusions Jim Gockowski and I came to when we studied effects on agrochemical use on the forest in the Western Region of Ghana. According to him going organic is a sure way of keeping a large part of the masses in hunger and this method of cultivation is detrimental to the forest.

Ridley based his arguments on a 200,000 years of history when exchange and specialisation began and when man moved from being a hunter-gatherer to a farmer and livestock holder. He showed how Malthus theory, hammered upon by several individuals, failed due to the Green Revolution and how the present day of an explosion in population is unfounded because population everywhere is declining and new crops are being produced - Genetically Modified Foods. Ridley talks about the collective mind as being the brain behind all innovations and struggle. He argues that if communities do not trade and live isolated lives, they lose the little technological advancement they have achieved and descend into primitive livelihood of subsistence.
Though this book tries to dispel any idea of pessimism by showing, broadly, that humans have escaped from worse predicament in previous times and they do so anytime there is freedom to trade without stifling laws, there are definitely some parts that I disagree with. Note that I am not an expert in anything here: First he writes 'The rapid commercialisation of lives since 1800 has coincided with an extraordinary improvement in human sensibility compared with previous centuries...' Here he attributes improvements in human lives with commercialisation; however, the fact that two or more variables are moving in the same direction or even in the same sinusoidal trend is no justification of causality. The variables themselves could be acted upon by whole different variable(s). In the above what caused what?

He also argued that people become less selfish or even more selfless and philanthropic when they become more rich, citing Bill Gates and Warren Buffet as examples. I have a problem with these. I think robbing Peter a pound to pay Paul a penny is not fair game and being kind to another for one's own selfish ends isn't selflessness. Some people become philanthropic by giving huge sums to charity because it lessens and helps their tax obligations to the state. Thus, billionaires will continue to do this irrespective of the moral standing on the issue. Again some of his arguments that large companies can't control governments is one I found very difficult to believe. It is true that large companies does not necessarily earn the economies of scale they are usually tipped to earn (Nassim Taleb also mentioned this in his book The Black Swan Event) and become frail and fragile and frightened, but they do control governments even if they don't have their way every time because governments have to balance delicately between the power of the people who puts them there and the power of those who maintain and fund them there. For instance, to whom did Obama's TARP help? Why were banks bailed with several trillions of  taxpayers' dollars only to reap all the profit into their own pockets less than a year later? Why is corporate tax almost always less than individual income tax, and why is it that governments are unable to reverse the situation? Who are those who spend billions of dollars to get bills passed and laws enacted that will help them? Why is it that when the Gun Control law in America came to an end and police officers agitated for its extension citing the benefits it has had, the president of the time George Bush, turned the ban and allowed people to wield heavy weaponry? Thus, improvements in life could not necessarily be linked to corporations; doing so would be discounting the natural and gradual organic improvement in the collective mind.

Regardless, Ridley make compelling arguments for his optimism that would put smiles on many a face. He is a strong believer in the world and its peoples ability to rise up to the occasion when they are needed most. If all he is saying are true and if his argument are true, then all the noisemakers, including Al Gore, are only blowing hot air. They need not be considered. But what the fears of the vociferous is the key driver of innovation (assuming that innovation is no longer serendipitous)? What will happen if we all sit on our haunches and fold our arms over our chests and declare that we are optimists and that life is good and that our current living poses no threat to anyone?

This book is a must read. Whether you believe it entirely, partially, or entirely disbelieve it, you will take something out of it after the read.

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