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Thursday, July 1, 2010

Seeing the Big Picture Is Child’s Play

Matt Ridley's The Rational Optimist

When I was younger I thought airplanes were the coolest thing ever.  In that way only kids (especially boys) can, I learned everything about the major commercial jets in the early 80s and was particularly fascinated by airline schedules and the hub-and-spoke system developing around that time.  Most of that fascination was vicarious, since I think I flew maybe four or five times before I was 18.

Of course, back then flying was more romantic and less stressful than it is in the post-9/11 era.  No one likes the security process, and taking off our shoes and having our toothpaste X-rayed is just plain silly. Airplanes also feel a lot more like buses (at least in coach) with their small seats and food for sale.  Even so, I still love flying for lots reasons, not the least of which is that it remains one of the best places to read.  I flew the other day with Matt Ridley’s new book, The Rational Optimist.

What Ridley does in this book is weave together ideas from a bunch of important authors, mostly economic historians such as Greg Clark, Deirdre McCloskey, and Joel Mokyr, but also the likes of Hayek, Darwin, and Julian Simon, as well as writers in evolutionary psychology and experimental economics.  The result is a history of humanity that focuses on the absolutely amazing economic progress we have made over the millions of years that we, or something like us, have wandered the earth.

I’m about halfway through, but so far it’s a terrific read. Ridley gets it all pretty much right in explaining how bottom-up, spontaneously ordering processes have enabled us to take advantage of “collective knowledge” via exchange.  For Ridley exchange is the key to understanding the history of humanity. It’s the engine of progress.  I will have more to say about his book next week.

The Longer View

For now, I just want to point out the importance, when it comes to economics, of taking a step back seeing the larger, longer view.  Books like Ridley’s are so wonderful because they invite us to think about how where we are now compares to where humanity was for most of its long existence.  Stuck as we are in a nasty recession and bombarded with constant media reminders of the doom and gloom in everything from the environment to childhood to the latest medical scare, it’s easy to forget how much better we live than our ancestors did in (insert the year of your choice).  And it’s also easy to overlook how much they would have wished they had our worries.  When your teeth are rotting out, half your kids die before age five, and you’re never quite sure where your next meal is coming from, it would be pretty nice if instead your biggest worry was the remote possibility of getting cancer in your 80s due to a wonderful device in your pocket that puts much of humanity and its knowledge at your fingertips.

As Ridley points out, it’s not just that we have had amazing technological innovations, but also that those innovations have been made accessible to more and more of humanity.  It’s one thing when the very richest people have expanding opportunities;  it’s quite another when technology like the cell phone is available to people across the poorest parts of Africa.  And it’s even more notable when that increasingly available wealth extends literacy and life spans, as it has done.  Innovation matters most when it becomes widely available, and that requires not just new “inventions” but market institutions to make them cheaper.

The beautiful part was that while reading Ridley I was experiencing the very phenomenon he was discussing.  Air travel does feel more like taking a bus than it used to, but that’s because rising wealth and increased market competition have made it more affordable to more people.  Humanity has been transformed by the democratization of many things that used to be the nearly exclusive province of the rich.  Nothing made this clearer than the couple in front of me on my flight.  They had an infant with them who I would guess was 8 or 9 months old.  The mom mentioned that this was the baby’s 13th flight!  I immediately asked if I could have his frequent flier miles.

More seriously, consider the bigger picture: In 200 years the human condition has gone from that infant’s having only a 50-50 chance of living to age 5 to his thriving and doing something our ancestors didn’t think was even possible – for the 13th time. What a world we live in, indeed.

That’s what that books like Ridley’s remind us of.  In the face of the daily doom-and-gloom report we call the news, such authors perform an important service by showing us the big picture.

  • Steven Horwitz was the Distinguished Professor of Free Enterprise in the Department of Economics at Ball State University, where he was also Director of the Institute for the Study of Political Economy. He is the author of Austrian Economics: An Introduction.