‘Rational Optimist’ Matt Ridley Answers Your Questions on Economy, Science
Editor’s Note: Last week, Paul Solman talked to “rational optimist” Matt Ridley about why he believes that life on earth for humans is getting better and better.
Ridley agreed to answer some of your questions — his replies are below.
I like Ridley’s upbeat view of the future. But at the root of all human progress and prosperity of the past 200 years has been the availability of cheap energy. We’re already past the point of extracting cheap petroleum — we’re on the downward limb of production. And the end of cheap coal is only a few decades away at the current rate of increase (an increase of 2.5 percent peryear for the last three or so decades.) By using 2.5 percent as the exponential rate of increased demand, my calculations put the end of cheap coal only 80-ish years away. None of the alternative renewable energy sources are capable of replacing these cheap and easily available energy sources. What happens to the well being and prosperity of society then?
Matt Ridley: I agree with you that cheap energy is crucial to high living standards. I suspect that cheap oil and cheap coal may last longer than you say. Technologies for extracting them keep getting more efficient and effective. But I notice you omit gas. I suspect cheap gas is almost certainly going to last many decades. The discovery of how to exploit shale gas is one of the great revolutions of the past decade. And nuclear looks like it is going to get cheaper and cheaper, too, as it gets more modular and better designed. So I agree with Robert Bryce (`Power Hungry’ is his book) that this century will be characterized by N2N: natural gas-to-nuclear. Perhaps fusion will eventually contribute.
Long an admirer of Mr. Ridley’s science writing, I picked up the “Rational Optimist” tome. While well composed as writing, the arguments were not entirely persuasive. It would be enlightening to hear his thoughts on any or all of the following issues:
The Gini index showing increasing inequality, and is it a proxy for the degradation of social and political life.
The fact that neither the U.S. nor U.K. made it in the top 10 countries rankings of human development (UN Development) nor the WHO rankings pertaining to health. Why not? Seems like we’re moving retrograde.
The fact that, say, the Economist Intelligence unit has put quality of life rankings in the U.S. and U.K. below the top 10. Why so if we’re evolving toward prosperity?
If the Flynn effect pertaining to average intelligence increases is to be believed (it widely is), then why principally in the ‘anglosphere’ nations aren’t people happier today than, say, in the 1950s? In other words if we’re collectively smarter on average, more rational, if you will, then why aren’t we on average happier?
Could one not also have been a fully credible ‘rational optimist’ in, say, spring and summer of 1914? How can one be optimistic without robustified institutions?
If there is one thing we have learned or should have learned from the 20th century, what is your best suggestions? Some rational and clear-eyed academics, e.g., the late Mr. Judt, asserted that it’s as if the 20th century never happened in terms of our neo-Edwardian, rosy view toward globalisation.
Final thought: Isn’t the hedonic treadmill of consumption a misleading proxy for well being, a veritable red queen phenomenon in itself–akways running, but only to stand still?
Regrets for the verbosity. Thanks for your time.
This is not true globally. In the world as a whole, the Gini coefficient is falling. You can see the graph from Pinkovskiy and Sala-i-Martin in Figure 3 on this page.
Only relatively. In absolute terms, human development indicators are still improving in the U.S. and U.K.
Again this is a relative measure. The falling of the U.S. and the U.K. tells you that poorer countries are catching up, which is good news for them.
Short answer: We are! The latest research shows that happiness does improve with income both within and between countries and within individual lifespans. I discuss this in my book. The decline in happiness with wealth is a myth. Here’s a link to the work of one researcher. Mind you, the very, very rich do seem to generally be unhappy, but this then makes the rest of us happy! (joke)
Sure, and I say in my book that all sorts of things will still go wrong. But remember by 1940 the average citizen of the world was much richer than in 1914, health outcomes were better, technology was more advanced etc etc. It had been a very bad three decades for many people, but nonetheless a steadily improving one for the average person.
Institutions matter, yes, and I discuss this in my book especially with respect to Africa – why Botswana is richer than Tanzania, for example.
The one thing I would learn from the twentieth century? Never give any government too much power. Democracy may be messy and imperfect and even inefficient at times. But it’s better than Hitler, Stalin, Franco, Mao, Pol Pot, Kim-il-Sung, Duvalier, Amin and Mugabe. Yes, we may find we are walking towards war as the Edwardians were. I hope not. Who knows if Edwardian globalization had had another ten years, it might have got to the point where war became less likely?
Yes! I do agree with this (I’d have to having written a whole book about the Red Queen effect!). To some extent. Just as today we moan about poor cell phone signals, so in 2100 we will moan about how useless the intergalactic internet is at dispatching dematerialized humans beyond 5,000 light years without delays, or something. We will take things for granted and forget how lucky we are. But, as I said above, despite this we DO get happier — a bit. Can you imagine facing the inevitable loss of some of your children and returning to happiness? Many fewer people now face that fate. Child mortality is down by two-thirds in my lifetime.
I like Gregg Easterbrook’s line:
Researching this book, and thinking about the alternatives, has caused me to begin whispering a regular prayer of thanks. Thank you that I and five hundred million others are well-housed, well-supplied, over-fed, free and not content; because we might be starving, wretched, locked under tyranny, and equally not content.
Are there any limits to the potential of humankind? Even if this path of techno-economic progress has seemingly worked so far (as measured by human-centered material statistics, not necessarily human emotional/spiritual health or beyond-human ecosystem vitality) is it wise to assume that our innovation will save us even if it appears we are approaching a cliff (global warming, human life devalued to some $50 a head in the trafficking market, etc.)? Do you see any limits to growth?
Matt Ridley: No I do not. Growth is not the consumption of resources. It is the combination of atoms, electrons and thoughts in ways that help supply us with what we need and I see no theoretical limit to the number of ways we can do this (I owe this idea to Paul Romer).
Suppose, for example we had reached a state of ultimate prosperity. And somebody said, if we alter the design of our cars in such and such a way, we could get one more inch (or light-year) per gallon. That would be growth: more distance at less cost.
I believe it should be mentioned that Mr Ridley was the former chairman of Northern Rocks: the bank that went bust and required nationalization by the UK Government at a cost of 20-30 BILLION pounds. Now to my question to Mr Ridley: What about trade imbalances? Trades are increasingly being performed with an ‘IOU’ instead of money, and Mr Ridley should know first hand the disaster that happens when the ‘IOU’ is not repaid. How would Mr Ridley propose to deal with the fraudulent transactions where one party doesn’t pay up?
Matt Ridley: There are some factual misunderstandings here. The word `bust’ is wrong, Northern Rock was illiquid not insolvent. The nationalization cost the government virtually nothing (the money referred to is a loan at a premium rate of interest since partly repaid and still repaying). I have never failed to repay an IOU and nor did Northern Rock.
As for trade imbalances, America buys goods from China with dollars and China uses those dollars to buy American goods or assets. If the U.S. cannot export enough goods to cover the gap then it sells assets instead: eg Treasury bonds. Trade imbalances will always exist and will sometimes lead countries into trouble, but will not impoverish the world. As for what happens when a fraud leads to a loan going bad, well in that case the lender loses money, and with luck the law catches the fraudster. That happened in the past and will happen in the future.