The Rational Optimist_ How Prosperity Evolves - Matt Ridley [3]
By exchanging, human beings discovered ‘the division of labour’, the specialisation of efforts and talents for mutual gain. It would at first have seemed an insignificant thing, missed by passing primatologists had they driven their time machines to the moment when it was just starting. It would have seemed much less interesting than the ecology, hierarchy and superstitions of the species. But some ape-men had begun exchanging food or tools with others in such a way that both partners to the exchange were better off, and both were becoming more specialised.
Specialisation encouraged innovation, because it encouraged the investment of time in a tool-making tool. That saved time, and prosperity is simply time saved, which is proportional to the division of labour. The more human beings diversified as consumers and specialised as producers, and the more they then exchanged, the better off they have been, are and will be. And the good news is that there is no inevitable end to this process. The more people are drawn into the global division of labour, the more people can specialise and exchange, the wealthier we will all be. Moreover, along the way there is no reason we cannot solve the problems that beset us, of economic crashes, population explosions, climate change and terrorism, of poverty, AIDS, depression and obesity. It will not be easy, but it is perfectly possible, indeed probable, that in the year 2110, a century after this book is published, humanity will be much, much better off than it is today, and so will the ecology of the planet it inhabits. This book dares the human race to embrace change, to be rationally optimistic and thereby to strive for the betterment of humankind and the world it inhabits.
Some will say that I am merely restating what Adam Smith said in 1776. But much has happened since Adam Smith to change, challenge, adjust and amplify his insight. He did not realise, for instance, that he was living through the early stages of an industrial revolution. I cannot hope to match Smith’s genius as an individual, but I have one great advantage over him – I can read his book. Smith’s own insight has mated with others since his day.
Moreover, I find myself continually surprised by how few people think about the problem of tumultuous cultural change. I find the world is full of people who think that their dependence on others is decreasing, or that they would be better off if they were more self-sufficient, or that technological progress has brought no improvement in the standard of living, or that the world is steadily deteriorating, or that the exchange of things and ideas is a superfluous irrelevance. And I find a deep incuriosity among trained economists – of which I am not one – about defining what prosperity is and why it happened to their species. So I thought I would satisfy my own curiosity by writing this book.
I am writing in times of unprecedented economic pessimism. The world banking system has lurched to the brink of collapse; an enormous bubble of debt has burst; world trade has contracted; unemployment is rising sharply all around the world as output falls. The immediate future looks bleak indeed, and some governments are planning further enormous public debt expansions that could hurt the next generation’s ability to prosper. To my intense regret I played a part in one phase of this disaster as non-executive chairman of Northern Rock, one of many banks that ran short of liquidity during the crisis. This is not a book about that experience (under