A Thanksgiving Feast Of Rational Optimism

Breughel-The-KermessMy Thoughts: My favorite all time writer in the world of finance, Nick Murray, brings another fine thought to the table. Being optimistic seems so much more reasonable than getting bogged down, week after week, month after month, in woe and gloom. Being positive seems so much more productive. And it reinforces the notion I’ve always had that while good times come to an end, so do the bad.

November 6, 2013 • Nick Murray

Optimism is the only realism. It’s the only world-view that squares with the facts, and with the historical record. Pessimism on the other hand is deeply — almost weirdly — counterintuitive, and yet just as deeply human. “On what principle is it,” wondered Lord Macaulay in 1830, “that when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?”

In his classic 2010 book The Rational Optimist: How Prosperity Evolves, Matt Ridley seeks to discover why “a rare predatory ape” — whose characteristics included tool making, big brains, culture, mastery of fire and even capacity for language, had been in place for some hundreds of thousands of years — suddenly burst out of Africa 45,000 years ago, to dominate the planet with rapidly evolving technologies.

Ridley’s answer is the twin engines of specialization and exchange — in his words, “ideas having sex.” It isn’t anything to do with how man is built; it’s how he interacts.

All innovation, in this view, is “a collective enterprise that requires exchange,” inasmuch as virtually all technologies are combinations of other technologies. Ridley quotes the molecular biologist Francois Jacob to the effect that “to create is to recombine,” and cites his favorite example, the camera pill, invented after a conversation between a gastroenterologist and a designer of guided missiles.

The breadth of Ridley’s learning is both great and lightly worn, and The Rational Optimist teems with wonderfully written historical and scientific vignettes. To choose just one of dozens (and one which encapsulates his whole anti-Malthusian stance), he talks about the ways in which the earth’s capacity to produce food has in fact run far ahead of population growth, largely because of advances in fossil fuel fertilizers:
“Since 1900 the world has increased its population 400 percent; its cropland area by 30 percent; its average yields by 400 percent and its total crop harvest by 600 percent. So per capita food production has risen 50 percent. Great news — thanks to fossil fuels.”

This is just the kind of gem with which The Rational Optimist sparkles. It’s a book to read, to savor and to love – a luxurious ocean-going yacht, cruising serenely upon a sea of catastrophism.

© 2013 Nick Murray. All rights reserved. Reproduced by permission. Nick highlights new books, articles, research findings and academic papers in the “Resources” section of his monthly newsletter, Nick Murray Interactive. To download a sample issue, visit www.nickmurray.com, and click on “Newsletter.”