Arnold Kling  

The New Matt Ridley Book

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Murphy's Law... Impressions of Tea Partiers...

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...

p. 122:


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.

p. 86:


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.


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COMMENTS (8 to date)
Mike Hammock writes:

I don't think a slave economy is inconsistent with a thick layer of institutions and trade. Reading about the Roman legal code and legal system will provide ample evidence that a society can have sophisticated institutions and have both slavery and trade. In fact, huge portions of the code were devoted to slaves--what happens if your slave hits mine, or if they're involved in an accident, for example. Slaves were simply one aspect of the trade economy. I don't think the division between slave economy and trade economy is so clear (particularly if slaves are given shares in ownership and operation of an enterprise, with the possibility of manumission).

None of which is to suggest that slavery is just or efficient or desirable, of course.

m.edwards writes:

"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." Possible that this "caste-based thinking" is a byproduct of economic development, not an inhibitor. When survival is on the line, who cares what your job is as long as you have one that pays. Today, we can afford to be snobs about it.

Mr Econotarian writes:

I wonder if stranger interactions among humans are more possible because of our smaller genetic diversity, having passes through a near extinction of the species recently (in geologic time).

Certainly some types of unrelated fish (that don't eat fish themselves) appear to have non-violent interactions though.

Unrelated dogs can interact well together, but they must feel that they are in the same pack.

Philo writes:

I think 'slave economy' is too narrow a term for the alternative to an economy based on free exchange: master-slave is one sort of rigid, involuntary economic relationship, but there are many others. The involuntary relationships on which non-commercial society is based are often themselves based on inheritance. As labor becomes specialized, each man is assigned to the economic role that had been taken by his father. He is responsible for a certain sort of production, and has certain claims on the produce of the other members of the group. This is "trade," but only in a broad sense; it is not "commerce." (But there undoubedly was *some* commerce between groups even in paleolithic times.)

Robert Johnson writes:

Mr Econotarian,

I think you make a good point about non-human animals who cooperate with strangers or those not of the same group. However, I wonder whether your guess about small genetic diversity among humans being an important factor is correct. I'm no expert, but I recently listened to lectures about chimp behavior that suggested that even between individual chimp groups that had recently split from a larger single group there can be extreme violence. If this is right then it would seem that genetic closeness may matter less to primates than does group identity.

Sean OBrien writes:
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

Interesting juxtaposition with Dave's earlier post on the cargo costs in some Mexican cultures having evolved over thousands of years. Seems to follow that we have always developed social norms that dictate the levels of cooperation - some proactive in effect, some unproductive.

An extended question, and perhaps more interesting, is why (not whether) some cultures develop cooperative social norms and others don't.

Those interested in the Ridley book might wish to know that my own prior 2009 book, THE CASE FOR RATIONAL OPTIMISM (Transaction Books, Rutgers University) thoroughly addresses very similar points and arguments. There is a very strong case to be made for rational optimism across a broad front of issues. More information at http://www.fsrcoin.com/k.htm

MernaMoose writes:

An extended question, and perhaps more interesting, is why (not whether) some cultures develop cooperative social norms and others don't.

I agree, that's a more useful and interesting question.

It would also be interesting to better understand how social norms scale (or don't) with group size. Example: I like ancient history and have read much from both East and West. Very early on in China, they faced the problem of developing social forms that could be implemented across vast regions and vast numbers of people. I'd argue that they succeeded admirably well, on net balance.

I have always thought this is somehow one of the key differences between Eastern and Western thought. Consider the differences in scale between a Greek city-state and a Chinese dynasty and you'll get the idea.

But this is way beyond my specialization and I know I don't understand it.

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