Ideas Having Sex–Redux

Originally published in Flourishing September/October 2012 

Some time ago (April 2011), in an article entitled Ideas Having Sex, I shared with you one of my favorite books, The Rational Optimist1, by Matt Ridley.  In contrast to the financial media, who have a vested interest in promoting crises and conflicts, Ridley’s fundamental message is that optimism is the rational approach to life.

According to Ridley, who is a Scottish geneticist, human beings long ago learned the benefits of voluntary and mutually beneficial exchange.  (You may have noticed that those who have not learned the art of such exchange are most often found to be criminals or demagogues.)  The art of voluntary and mutually beneficial exchange, especially here in America, has become part of our cultural DNA.  We call it “win-win”, and it explains why our unique experiment in economic freedom created a cultural and economic expansion that snowballed into an empire of benevolence and wealth.

Tom Gardner, co-founder of the Motley Fool newsletter companies, recently endorsed2 Matt Ridley’s theme, “Exchange is to cultural evolution as sex is to biological evolution.”  And the extension, “Most powerful of all is the exchange of ideas.”  Paraphrasing Gardner:  …while the exchange of hard goods is at any given moment a zero sum enterprise, an idea can be shared to an infinite degree – hundreds or even billions of people can benefit from a single idea.   Moreover, ideas may combine with a virtually infinite number of other ideas, thus creating exponentially expanding human benefits; as, indeed, they already have.

Gardner points out that in today’s networked world, the benefits of voluntary exchange of ideas include greater literacy, greater transparency, more shared best practices, and deeper empathy and mutual awareness than ever before in human history.  Our lives are richer because of the Internet and wireless communication technology. 

I recently thought to download from Amazon’s Cloud Player to my iPod a song I’ve always enjoyed and taken inspiration from, Lacy J. Dalton’s hit single, The Boys of 16th Avenue3.  It was written by Thom Schuyler in 1983, and recorded by Dalton in the same year.  It celebrates the “million dollar spirit” of aspiring young musicians, who give up everything else to follow their dreams to Nashville.  I hadn’t heard it for a long while, but when I played the song a few days ago, I was struck by this line:

There’s cowboys, drunks, and Christians,
Mostly white and black and blue.
They’ve all dialed the phone collect to home
From 16th Avenue.

Forget for a moment the remarkable fact that my iPod (for which I paid less than a hundred dollars) has more computing power than all the Apple computers on the planet in 1983; what struck me about those lyrics was—though I’ve placed more than a few collect calls in my time—that I can’t remember the last time I saw a telephone booth.  And, who among us does not now carry a smart phone they can’t live without? 

I have no opinion on the future of smart phones; the iPod, or of Apple, the company that makes and sells it; or of Amazon, the ubiquitous, world-wide Internet shopping mall.  But I’m very sure that the future of the world economy is not in the hands of criminals or demagogues.  These people do exist—indeed, they swarm—and they are an impediment to progress.  But, the future is, as it has always been, in the hands of the creators—people who today may have, like the boys of 16th Avenue in 1983 or the cofounder4 of Apple in 1976—little else than a million dollar spirit, one good idea, and a burning desire to manifest their talents in the marketplace of voluntary exchange.  Today, ideas are dispersed, democratized, and mated with other ideas at light speed; and many are then concretized in the lives of millions of people through investors like you and me, and the managers and marketers and laborers of the world’s great companies.  The iPod is just one example. 

The proliferation and mating of ideas has been expanding human horizons for nearly one hundred thousand years; and that omnipresent, long-term trend is not seriously threatened by today’s faux-populist politicians or by the vainglorious sideshow we call “network news”.  Still, I can appreciate that despite decades, centuries, and millennia of accelerating improvement in the human condition, our contemporary politicians and pundits have the volume and circuitry to influence our thinking in ways we may not fully realize.  For example, during every market setback, I hear people echoing CNBC and its ilk with questions like,  “But, what if the economy/market doesn’t recover?”  I know that some advisors, in response to such queries, are telling people to turn off the television, and that’s probably fine advice, as far as it goes.  But, I still think it wouldn’t do any harm, and it might do much good, for investors to read—for calming, historical perspective—books like The Rational Optimist, by Matt Ridley.  For another setback is surely coming, though we cannot know when or from what level. mh

1.  http://www.amazon.com/The-Rational-Optimist-Prosperity-Evolves/dp/006145205X

2.  http://newsletters.fool.com/   (subscription required)

3.  http://en.wikipedia.org/wiki/Thom_Schuyler

4.  Steve Jobs, by Walter Isaacson, Simon and Shuster, October 24, 2011.

Optimism is Realism

Originally Published in eFlourishing Issue 18, June 9, 2010

That three-word epigram has informed Nick Murray’s written and spoken work for at least twenty years, forty is more likely. Now, Mr. Murray recommends The Rational Optimist, Harper Collins, 2010. The author, Matt Ridley, earned a PhD. in Zoology from Oxford and, for several years, was the science editor at The Economist. In 1999, he authored, and I read, the best-seller, Genome: The Autobiography of a Species in 23 Chapters. He is also the author of The Red Queen: Sex and the Evolution of Human Nature, The Origins of Virtue, The Agile Gene, and Francis Crick: Discoverer of the Genetic Code. Qualified, he definitely is.

According to Ridley, the story of optimism begins roughly 200,000 years ago, when early humans discovered the catallaxy: the ever-expanding possibilities generated in a society based on specialization and the division of labor. (Ridley attributes the term catallaxy to Nobel Prize winning economist F.A. von Hayek, but justice requires me to add that Catallactics was first the life’s work and term of Hayek’s teacher, the immortal Ludwig von Mises.) Anyway, Ridley is a master teacher and storyteller. He calls upon a cosmic range of material from historical, anthropological, genetic, and economic research to construct an inductive proof of his thesis that – in Nick Murray’s words – optimism is realism.  

…did you know that 14,000 years ago, obsidian from Anatolia was being transported along the Euphrates through the Damascus Basin and the Jordan Valley? Seashells were going in the opposite direction.

…have you ever thought of farming as the extension of specialization and exchange to include other species than humans? Horses, oxen, and the genetic modification of wheat?

One of my favorite stories in the book is that of Borlaug’s genes. After WWII, utilizing the research of scientists like Cecil Salmon (on MacArthur’s staff in Japan) and Orville Vogel (Oregon State University), Norman Borlaug pioneered and promoted a genetically altered (the Rht1 gene), short-stemmed wheat in Mexico. By 1963, Borlaug’s varieties were 95% of Mexico’s wheat crop, and had increased Mexico’s wheat production six-fold in twelve years. Borlaug then lobbied for his new wheat varieties in Pakistan and India, two countries desperately in need of increased food supplies. By 1968, the wheat harvest in both of those countries exceeded storage and processing capacity. Grain was even stored in schools, and India issued a postage stamp to celebrate the wheat revolution. In 1970, Norman Borlaug received the Nobel Peace Prize. (In those days, that prize was still awarded to people who actually deserved it.)

According to Ridley, since 1900 the earth’s population has quadrupled. Land under cultivation has increased only 30%, but yields have increased 400%, and the total crop harvest has increased 600%. Doing the math, per capita food production has increased 50% – thanks to genetic science and fertilizer derived from fossil fuels. (I’m not making that up; it’s in the book.)

Ridley goes on to tell how Bishop Wilberforce was aided in the abolition of slavery in Britain by the industrial revolution. He tells how (from 1750 to 1850) the entrepreneurial owners of British cotton mills overwhelmed the colorful calicos of India, despite paying a wage five times greater and shipping their wares over 13,000 miles. Even slave power couldn’t compete with coal-fired steam.

“The list of innovations achieved by the pharaohs,” Ridley writes, “is as thin as the list of innovations achieved by British Rail or the US Postal Service.” On the other hand, “…the Philistines invented iron; the Canaanites the alphabet; and their coastal cousin, the Phoenicians, glass.” Innovation and progress are the necessary and direct results of specialization and exchange, and the absence of overbearing government.

According to Ridley, the human desire to exchange ideas is genetically encoded; like nest building in birds. Unlike bird’s nests, though, ideas beget other ideas, bigger and better. There are no limits to what we human beings can achieve through the catallaxy, when left free to do so. Ridley offers some exciting and surprising possibilities for the 21st century.

Every investor, financial advisor, teacher, professor, journalist, and policymaker should read this book. So should every American concerned about the future. (359 pages of text and 59 pages of endnotes and references. Available at Amazon for $16.72.