In my last post, “The Remarkable Human Progress of the Last 200 Years,” I presented the findings of a new book by Johan Norberg, “Progress: ten reasons to look forward to the future.” Mr. Norberg details how much human welfare has progressed in such fundamental ways as food availability, improvements in sanitation, increased life expectancy, poverty reduction, gains in literacy, decline of slavery, and equal rights for all.
This raises the obvious question: What is responsible for all of this enormous progress?
An answer to this question is provided by Matt Ridley in his book, “The Rational Optimist: how prosperity evolves.” First of all, Mr. Ridley points out that since the year 1800, income per capita has increased nine times (in constant dollars) and even though the rich have gotten richer, the poor have done even better.
But in addition it is the “invention of invention” attributed to the evolution of human nature which has led to the explosion of innovation in the past two centuries. So what propels this explosion of invention? According to Mr. Ridley:
- It is not Driven by Science. In fact science is more like the daughter than the mother of technology.
- Money is important to innovation but not paramount. For example, the pharmaceutical industry often simply buys small firms which have developed big ideas, rather than large companies developing their own products,
- There is little evidence that Intellectual Property, i.e. patents, is what drives inventors to invent.
- Government is bad at innovation. In fact it is more likely to crowd out resources which could be put to better use by the private sector.
- In fact it is the ever-increasing Exchange of ideas which causes the ever-increasing rate of innovation in the modern world.
Conclusion. “The more you prosper, the more you can prosper. The more you invent, the more inventions become possible. … There is an inexhaustible river of invention and discovery irrigating the fragile crop of human welfare.”