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Dhwaneet Bhatt

Book Review - The Rational Optimist

book-review, history, economics, philosophy3 min read

Update: I have been reading lot more than I anticipated. To keep the blog clean and focused, I will add future book reviews here and not as individual posts.

cover-image-of-the-book

Summary

This book is about the history of prosperity in humans.

The author takes us down the history lane and shows us that the real progress of humans beings as a species started when they started trading. Through trading and trusting strangers came the exchange of ideas. Because of this human beings started specializing instead of having to do everything by themselves. And by specializing, they became better and better at doing that one thing. Multiply this effect by everyone specializing and that led to innovation. Self sustenance was poverty, trade and dependency on specialization made people prosper.

The central idea behind this is that when everyone specializes, the more time they can dedicate towards their work when their basic needs (shelter, food, clothing) are taken care by someone else. This also spares more free time, which again is invested back into either leisure or more specialization/innovation, increasing the quality of life individually and as a whole. The trade was not only about goods but it was a trade of time as well.

Time and again, richness is measured by the time you have rather than money. In the earlier days, slavery made you rich because people could offload the work to slaves. Humans have continued to innovate how to get their work done by someone else, moving from human slavery to animal slavery to machine slavery. These days, machines do most of the work and humans and animals are spared to live their own lives. This is a remarkable improvement in the quality of life for all the species.

The author also takes a jibe at pessimism and says that pessimism is usually a result of extrapolation. Innovation cannot be predicted. People have predicted nuclear holocaust, ice age, global food shortage, acid rain and pandemics* and majority of all predictions have turned out to be false. The idea is never to always keep doing the same thing but rather increase trade, freedom and allow people to exchange ideas and innovation will solve many problems in ways no one could have predicted in hindsight.

Regarding the two most pressing problems that humanity faces today - poverty (mostly Africa) and climate change, the author seems to remain skeptical too about the pessimism. He does acknowledge them as problems but says the solution lies in what humanity has always been doing - allow people to freely exchange ideas and trade and the quality of life will become better due to innovation. Against climate change, he says that as prosperity increases, people will have better ways to fight climate change and will be less dependent on the changes that it brings. The cost of fixing climate change should not be worse than the results of climate change in terms of human prosperity, and he believes that innovation in renewables will mostly solve the problem by mid-century. And as always, people and everyone else will adapt. Climate change is not the end of humanity.

Takeaways

So long as human exchange and specialisation are allowed to thrive somewhere, then culture evolves whether leaders help it or hinder it, and the result is that prosperity spreads, technology progresses, poverty declines, disease retreats, fecundity falls, happiness increases, violence atrophies, freedom grows, knowledge flourishes, the environment improves and wilderness expands.

Human nature will not change. The same old dramas of aggression and addiction, of infatuation and indoctrination, of charm and harm, will play out, but in an ever more prosperous world.

These two quotes summarize my takeaways from this book. The emotions and thoughts that drive humans does not change much, but because humans are social much more than any other animal species, they value exchange of ideas, and the collective human brain continues to make progress and increase prosperity for everyone else. It is not a zero-sum game.

Notes

Pandemics - This book was written in 2008 and we saw the COVID-19 pandemic in 2020. So, the pessimists' prediction about a pandemic did turn out to be true. But if we compare the destruction to humanity the COVID-19 pandemic has done compared to the past pandemics, we realize that this pandemic was the shortest one and the least harmful among all (Black Death wiped out half of Europe). Because of advancements in medicine and technology, this pandemic did not even affect 1% of the human population. Our ability to manage pandemics and limit the destruction they cause is the result of innovation.