The Rational Optimist: How Prosperity Evolves

Take a worker who earns minimum wage in a mid-sized American city and compare him with a king from the eighteenth century. The king had a castle and servants, but he had no electric light, no medicine for a simple infection and no way to call a distant relative. Today's worker has all of that by flipping a switch, opening the refrigerator or dialing a number on a cell phone.

For Ridley, this comparison is the central argument of the book. He argues that humanity is objectively better off today than at any other moment in history, even with the problems that remain, because more people have access to food, health care and comfort than in any earlier century.

The author does not credit this improvement to luck or to any particular government. He credits a simple mechanism that has repeated itself since before agriculture: one person trades what he does well for what another person does well, and both come out ahead. That mechanism is what the whole book traces, from prehistory to today.

Imagine living without trading anything with anyone: growing your own food, spinning your own clothes, building your own house, making your own knife. That is not freedom, it is misery disguised as independence. The author points out that the more a family tries to live in total self-sufficiency, the poorer and more fragile it becomes, because one person alone has neither the time nor the talent to do every step of every task well.

The way out that let our species prosper was the opposite: each person specializes in one small part of production and trades the surplus with someone who specialized in another part. One bakes bread, another fixes shoes, another looks after children, and what the three have together adds up to more than what each would have alone.

This holds for the corner bar just as much as for the economy of an entire country: the bar owner does not grow the sugarcane for the rum or raise the chickens for the wings. He buys from people who do that better and cheaper, and focuses on taking good care of whoever sits at his tables. That is the principle of the division of labor: each person focuses on a small part of production, trades for the rest, and everybody comes out ahead together.

Many people think commercial trade is a recent invention of big cities. The book shows the opposite: archaeological finds from tens of thousands of years ago, long before agriculture, show seashells from the coast found far inland and obsidian stone far from any volcano. That only happens if one group traded with another, handing over what it had in surplus in exchange for what it lacked.

For Ridley, this is proof that trading was already part of human life before any city, currency or writing. A band of hunter-gatherers trading stone tools with the neighboring band is doing, on a small scale, the same thing two factories in different countries do today: each side hands over what it produces best.

The author uses this to knock down the idea that commercial trade corrupted a humanity that was originally cooperative and generous. For him it is the opposite: trade has always been part of human cooperation, it just kept growing in scale, from the band to the village, from the village to the city, from the city to the whole connected planet.