Computer Revolution part 2

May 16, 2010

Cheer up: life only gets better

Humans’ capacity for solving problems has been improving our lot for 10,000 years. Don’t think it will stop now

Matt Ridley

By the middle of this century the human race will have expanded in 10,000 years from less than 10m people to nearly 10 billion. Some live in misery and dearth even worse than the worst experienced in the Stone Age. But the vast majority are much better fed, much better sheltered, much better entertained, much better protected against disease and much more likely to live to old age than their ancestors have ever been.

The availability of almost everything a person could want or need has been going rapidly upwards for 200 years and erratically upwards for 10,000 years before that: years of lifespan, mouthfuls of clean water, lungfuls of clean air, hours of privacy, means of travelling faster than you can run, ways of communicating farther than you can shout. This generation of human beings has access to more calories, watts, lumen-hours, square feet, gigabytes, megahertz, light years, nanometres, bushels per acre, miles per gallon, food miles, air miles and, of course, cash than any that went before.

It can buy anything from vitamins and mango slicers to tennis rackets and guided missiles. By one estimate, the number of different products on sale just in London now tops 10 billion.

Furthermore it is possible, indeed probable, that by 2110 humanity will be much much better off than it is today and so will the ecology of our planet. This view — which I shall call rational optimism — may not be fashionable but it is compelling.

Rational optimism holds that the world will pull out of its economic and ecological crises because of the way that markets in goods, services and ideas allow human beings to exchange and specialise for the betterment of all. But a constant drumbeat of pessimism usually drowns out this sort of talk. Indeed, if you dare to say the world is going to go on getting better, you are considered embarrassingly mad.

If, on the other hand, you say catastrophe is imminent, you can expect a MacArthur Foundation genius award. In my own adult life I have listened to solemn predictions of growing poverty, coming famines, expanding deserts, imminent plagues, impending water wars, inevitable oil exhaustion, mineral shortages, falling sperm counts, thinning ozone, acidifying rain, nuclear winters, mad cow epidemics, Y2K computer bugs, killer bees, sex-change fish, global warming, ocean acidification and even asteroid impacts that would soon bring our happy interlude to a terrible end. Let me make a square concession at the start: the pessimists are right when they say that if the world continues as it is it will end in disaster. If all transport depends on oil, and the oil runs out, then transport will cease. If agriculture continues to depend on irrigation and water stocks are depleted, then starvation will ensue.

Notice the “if”. The world will not continue as it is. That is the whole point of human progress, the pressing message of cultural evolution.

It is my (rational, optimistic) proposition that the human race has become a collective problem-solving machine which solves problems by changing its ways. It does so through invention driven often by the market: scarcity drives up price and that in turn encourages the development of alternatives and efficiencies.

History confirms this. When whales grew scarce, for example, petroleum was used instead as a source of oil. The pessimists’ mistake is extrapolationism: in other words, assuming that the future is just a bigger version of the past.

So, for example, the environmentalist Lester Brown, writing in 2008, was pessimistic about what would happen if the Chinese were as rich by 2030 as the Americans are now. If, for example, each person in China consumes paper at the current American rate, then China’s 1.46 billion people will need twice as much paper in 2030 as is produced worldwide today. There go the world’s forests.

In fact, Brown is dead right with his extrapolations, but so was the man who (probably apocryphally) predicted that the streets of London would be buried under 10ft of horse manure by 1950. So was IBM’s founder Thomas Watson when he said in 1943 that there was a world market for just five computers and Ken Olsen, the founder of Digital Equipment Corporation, when he said in 1977: “There is no reason anyone would want a computer in their home.” Both remarks were true enough when computers weighed a ton and cost a fortune.

However, these eminently sensible people were right only at that precise moment in time. Even Lester Brown will not always be right. Why? Because now that we know about the looming paper shortage, we will ensure that by 2030 paper is used more frugally or replaced by something else. What is the alternative — halting the Chinese economy?

The question is not “Can we go on as we are?” — because the answer is “No” — but how best can we encourage the changes that will enable the Chinese, Indians and Africans to live as prosperously as Americans and Britons do today?

Many of today’s extreme environmentalists insist the world has reached a “turning point” — quite unaware that their predecessors have been making the same claim for 200 years. They also maintain that the only sustainable solution is to retreat — to halt economic growth and enter progressive economic recession.

This means not just that increasing your company’s sales would be a crime, but that the failure to shrink them would be, too. Not only would inventing a new gadget be illegal, but so would failing to abandon existing technologies. Growing more food per acre would become a felony, as would failing to grow less.

Here’s the rub: this future sounds awfully like the feudal past. The Ming and Maoist emperors of China had rules that restricted the growth of businesses, punished innovation and limited the size of families. That, I fear, is the world the pessimists conjure up when they speak of retreat.

As I write, it is nine in the morning. In the two hours since getting up, I have showered in water heated by North Sea gas, shaved using an American razor running on electricity made from British coal, eaten bread made from French wheat and spread with New Zealand butter, brewed tea using leaves grown in Sri Lanka, dressed in clothes of Indian cotton and Australian wool and read a newspaper made from Finnish wood pulp. I have consumed goods and services from dozens of countries.

More to the point, I have also consumed minuscule fractions of the productive labour of many dozens of people. They were all, unknowingly, working for me. In exchange for some fraction of my spending, each supplied me with some fraction of their work. They gave me what I wanted when I wanted it — as if I were the Roi Soleil, Louis XIV, at Versailles in 1700.

Each day I am not just consuming the labour and resources of others: I am consuming their inventions, too. A thousand entrepreneurs and scientists devised the dance of photons and electrons by which my television works. Unlike Louis XIV, who required 498 people to produce just one of his dinners, I number among my servants John Logie Baird, Alexander Graham Bell, Sir Tim Berners-Lee, Thomas Crapper, Jonas Salk and myriad other inventors.

Indeed, we all have far, far more than 498 servants at our beck and call. That is the magic that exchange and specialisation have wrought for the human species: not the work of any specific individual but the creation of something I shall call “the collective human brain”. It is here that rational optimism — and human progress — begin.

Cast an eye over the development of human society and ask yourself this: what makes us radically different from other animals? Killer whales may teach each other how to snatch sea lions off beaches, but only human beings have the cumulative culture that goes into the design of a loaf of bread or a concerto.

Yes, but why? Why us and not killer whales? The answer, I believe, is that at some point in the past 100,000 years, ideas began to meet and mate. There was a time in human prehistory when big-brained people for the first time began to exchange things with each other, to become better off as a result and to specialise. And once they started doing so, culture suddenly became cumulative and the great headlong experiment of human economic “progress” began.

Making and using tools saved time — and prosperity is, after all, simply time saved. Forget dollars, cowrie shells or gold. The true measure of something’s worth is the hours it takes to acquire it.

The more human beings diversified as consumers and specialised as producers, and the more they exchanged goods and services, the better off they became. And the good news is there is no inevitable end to this process.

As more people are drawn into the global division of labour and more people specialise and exchange, we will all become wealthier. Along the way, moreover, there is no reason why we cannot solve the problems that beset us — economic crashes, population explosions, climate change, terrorism, poverty, Aids, depression, obesity.

I am aware that an enormous bubble of debt has burst and unemployment is rising sharply all around the world as output falls. The immediate future looks bleak 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.) Is this the end of growth? Hardly. So long as somebody allocates sufficient capital to innovation, then the credit crunch will not, in the long run, prevent the relentless upward march of human living standards.

Even the Great Depression of the 1930s, although an appalling hardship for many, was just a dip in the slope of economic progress. By 1939 the worst-affected countries, America and Germany, were richer than they had been in 1930. All sorts of new products and industries were born during the depression: by 1937, 40% of DuPont’s sales came from products that had barely existed before 1929, such as enamels and cellulose film.

So growth will resume — unless it is stifled by the wrong policies. Somebody, somewhere, is still tweaking a piece of software, testing a new material, or transferring a gene that will make your life and mine easier in the future.

I don’t know who or where that person is now, but let me give you a possible candidate. In the week that I wrote this paragraph, a small company called Arcadia Biosciences in northern California signed an agreement with a charity working in Africa to license, royalty-free to smallholders, new varieties of rice that can be grown with less nitrogen fertiliser for the same yield.

Assuming the rice grows in Africa as well as it does in California, some Africans will soon be growing and selling more food — and creating less pollution. This means they will have more money to spend.

Some of them may then perhaps buy mobile phones from a western company. And as a consequence of higher sales, an employee of that western company may get a pay rise, which she will spend on a new pair of jeans, made from cotton woven in an African factory. And so on.

The cumulative accretion of knowledge by specialists that allows us each to consume more and more different things is the central story of humanity. Forget wars, religions, famines and poems. This is history’s greatest theme: the metastasis of exchange and specialisation.

As the rational optimist, I invite you to stand back and look at your species differently, to see the grand enterprise of humanity that has continued to progress — with frequent setbacks — for 100,000 years. And then to consider whether that enterprise is indeed finished or if it still has centuries — and millenniums — to run.

© Matt Ridley 2010 Extracted from The Rational Optimist: How Prosperity Evolves, to be published by Fourth Estate on May 27 at £20. Copies can be ordered for £18, including postage, from The Sunday Times Bookshop on 0845 271 2135