The Rational Optimist_ How Prosperity Evolves - Matt Ridley [35]
And, wonderfully, this is true even if Oz is better at hookmaking than Adam. Suppose Adam is a clumsy fool, who breaks half his hooks, but he is an even clumsier fisherman who cannot throw a line to save his life. Oz, meanwhile, is one of those irritating paragons who can whittle a bone hook with little trouble and always catches lots of fish. Yet it still pays Oz to get his hooks made for him by clumsy Adam. Why? Because with practise Adam has at least become better at making hooks than he is at fishing. It takes him three hours to make a hook, but four hours to catch a fish. Oz takes only an hour to catch a fish, but good as he is he still needs two hours to make a hook. So if each is self-sufficient, then Oz works for three hours (two to make the hook and one to catch the fish), while Adam works for seven hours (three to make the hook and four to catch a fish). If Oz catches two fish and swaps one for a hook from Adam, he only has to work two hours. If Adam makes two hooks and uses one to buy a fish from Oz, he only works for six hours. Both are better off than when they were self-sufficient. Both have gained an hour of leisure time.
I have done nothing here but retell, in Stone Age terms, the notion of comparative advantage as defined by the stockbroker David Ricardo in 1817. He used the example of England trading cloth for Portuguese wine, but the argument is the same:
England may be so circumstanced, that to produce the cloth may require the labour of 100 men for one year; and if she attempted to make the wine, it might require the labour of 120 men for the same time. England would therefore find it in her interest to import wine, and to purchase it by the exportation of cloth. To produce the wine in Portugal, might require only the labour of 80 men for one year, and to produce the cloth in the same country, might require the labour of 90 men for the same time. It would therefore be advantageous for her to export wine in exchange for cloth. This exchange might even take place, notwithstanding that the commodity imported by Portugal could be produced there with less labour than in England.
Ricardo’s law has been called the only proposition in the whole of the social sciences that is both true and surprising. It is such an elegant idea that it is hard to believe that Palaeolithic people took so long to stumble upon it (or economists to define it); hard to understand why other species do not make use of it, too. It is rather baffling that we appear to be the only species that routinely exploits it. Of course, that is not quite right. Evolution has discovered Ricardo’s law and applied it to symbioses, such as the collaboration between alga and fungus that is a lichen plant or the collaboration between a cow and a bacterium in a rumen. Within species, too, there are clear gains from trade between cells of a body, polyps of a coral colony, ants of an ant colony, or mole-rats of a mole-rat colony. The great success of ants and termites – between them they may comprise one-third of all the animal biomass of land animals – is undoubtedly down to their division of labour. Insect social life is built not on increases in the complexity of individual behaviour, ‘but instead on specialization among individuals’. In the leafcutter ants of the Amazon rainforest, colonies may number millions, and workers grow into one of four distinct castes: minors, medias, majors and supermajor. In one species a supermajor (or soldier) may weigh the same as 500 minors.
But the big difference is that in every other species than human beings, the colonies consist of close relatives – even a city of a million ants is really just a huge family. Yet reproduction is the one task that people never delegate to a specialist, let alone a queen. What gave people the chance to exploit gains from trade, without waiting for Mother Nature’s tedious evolutionary crawl, was technology. Equipped with the right tool, a human being can become