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"Rational Optimist: How Prosperity Evolves"

 
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I recently reread this book, and found it just as interesting as the first time. I don't agree with everything in it, and some of the examples are a bit dated, but the core message is really important.

Key Ideas:
Early chapters explore the importance of trade in human history, and proposes that the cultural invention of barter - that is two unrelated individuals trading dissimilar items - is unique to humans. There are no other species that do this, and this tendency towards change drove early human evolution. Trade depends on strong relationships and trust, and the oxytocin systems in human brains appear uniquely adapted to support this trust. Trade is critically important because in a culture where barter takes places specialisation can occur (eg a tribe may have an expert hunter and an expert spearmaker), and specialisation drives innovation.  Once trade started to take place a virtuous cycle takes forms where trade begets greater specialisation, leading to more innovation and more trade. Where trade flourishes - including trade in ideas - innovation occurs. Where trade is restricted innovation slows or regresses.

Having set the scene the author proposes that humans ability to innovate rapidly to solve problems means we have good reason to be optimistic about the future. Quality of life for all people is vastly improved now compared to 100 years ago, and continues to improve, and this prosperity is driven by trade and innovation.

He explores the long history of pessimistic forecasting, "tipping points" and scare stories, which all seem to begin

"If we carry on as we are...
... London will be buried in 10ft of horse manure"
... acid rain will destroy the forests"
... population growth will outstrip food production."

London was saved from being buried in horse manure by the invention of the car. Not created to stop the manure problem, but as a side effect eliminated it completely.
Food production was limited by the availability of mined guano from sea birds. Chemists worked out how to fix nitrogen from air to make fertiliser. Population growth globally has been drastically decreased by rising standards of living, better education for poor women, and better healthcare for children.

The point is that the "If we carry on as we are..." framework is fundamentally flawed. Humanity never stands still while innovation takes place, and through human history the people forecasting doom and destruction have been wrong because they see human activity as static, and not changing.

In the final section he looks ahead at the current issues of the day - global warming, ocean acidification etc... Some of his comments in this section are a bit dated now. He misses, for example, the significance of the improvements of battery technology and the falling price of renewable energy. But at the same time, these oversights go some way to proving his point! In just 10 years innovation in these technologies has progressed faster, and in more varied directions, than could have been predicted back then.  He makes some comments about how space flight seems to be limited to being the preserve of government agencies like NASA, and makes an offhand comment about how some philanthropic billionaire might one day send men into space with his private fortune. 10 years later we have SpaceX, a private company, sending men and commercial satellites into space for a fraction of the cost he could have dreamed of at the time of writing.

I can't do this book justice in a short comment, but I do recommend it highly - especially if you are finding the world a dark and gloomy place at present!
 
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