The New Matt Ridley Book
I picked up a copy at the airport yesterday, and I am about half-way through. It is called The Rational Optimist, and John Tierney has a brief summary.
My guess is that a lot of people will want to talk about the book without reading it. It is a dense book, although followers of this blog should have little difficulty picking up on the ideas. There is a lot of overlap with From Poverty to Prosperity. Ridley is more overtly libertarian than we are, which tells you something. It would be interesting to see the two books reviewed together.
Some excerpts and comments below.p. 63:
men seem to strive to catch big game to feed the whole band–in exchange for both status and the occasional seduction–while women feed the family. This can lead to men being economically less productive than they might be. Hadza men spend weeks trying to catch a huge eland antelope when they could be snaring a spring-hare each day instead…
The other day, my wife and I bumped into Jerry Muller (The Mind and the Market, Capitalism and the Jews) and his wife while walking in our neighborhood. Muller is, er, mulling the issue of the economics of the family. We talked about the phenomenon of women earning an increasing share of income, and afterward my wife and I were reminded of a young relationship we know where the woman works and the man does nothing during the day but walk the dog. Maybe the man is genetically programmed to think that if he cannot catch a large antelope, he might as well just sit and play video games. This could be a trend to watch…
Oetzi [a fossil man dated 5300 years ago], the mummified ‘iceman’ found high in the Alps in 1991, was carrying as much equipment on him as the hikers who found him…If he had had to invent from scratch all his equipment he would have had to be a genius. But even knowing what to make and how to make it, if Oetzi had spent his days collecting all the raw materials…he would have been stretched to the breaking point, let alone if he then had to smelt, tan, weave, sew, shape and sharpen everything. He was undoubtedly consuming the labour of many other people, and giving his own in exchange.
This is one of many persuasive arguments against my own wrong view, which is that trade was not that common. To defend my view (and I am not saying that I should), I could propose that perhaps Oetzi lived in a slave economy rather than in a trading economy. One of Ridley’s points (p. 130-131) is that copper smelting is an unlikely process to get into without a reliable market. (An Austrian would say it is a classic case of roundabout production.) Again, the only conceivable alternative would seem to be a slave economy.
All these societies [in which animals cooperate] are just large families. Collaboration between unrelated strangers seems to be a uniquely human achievement. In no other species can two individuals that have never before met exchange goods or services to the benefit of each other…[among] ants or chimpanzees, the interactions between members of different groups are almost always violent…
how inconceivable it would be for an orderly queue of stranger chimpanzees to board an aeroplane, or sit down in a restaurant, without turning violently on each other. And generally speaking the more cooperative a species is within groups, the more hostility there is between groups…it is an extraordinary thing that people can overcome their instincts enough to have social commerce with strangers.
Here, it seems to me, Ridley short-changes the importance of institutions. He argues for positive feedback between trade and trust, and he mentions the “trust hormone,” oxytocin. But folks like Hayek, or like Douglass North and other economists that Nick and I interviewed for our book, would look at the rules and social norms that develop around things like restaurants (the example Nick and I use is a food court, where people know that napkins are free for the taking but soda is not, where people know they are expected to dump their trash, and so on).
One of the reasons that I cannot picture ancient people engaging in trade in the modern manner is that I have a hard time picturing them developing the thick layer of institutions, including property rights and codes of conduct, that would be needed in order for you to voluntarily choose to become a full-time copper smelter and feel confident that you will be able to obtain food. I can see becoming a smelter because one is part of the smelting caste more easily than I can picture it in terms of a modern capitalist economy. Even now, there may be a large residue of caste-based thinking in that for some of us it us unthinkable to become a plumber or electrician, while people with other backgrounds might find it unthinkable to become humanities majors.