Thanks to a couple of decent train journeys, I’ve at last read Matt Ridley’s [amazon_link id=”0007267126″ target=”_blank” ]The Rational Optimist: How Prosperity Evolves[/amazon_link], published in 2010. Some readers will no doubt think it mis-titled, and might argue instead for The Delusional Optimist. After all, the nearly two years since publication have hardly seen a lot of economies enjoying the sunny uplands of vigorous growth. But they would be unfair to read the book as a commentary on the current state of the economy; its theme concerns the very long run of growth.

Ridley’s main thesis is that specialisation and trade are what drive innovation and growth. Indeed, he argues that trade came before agriculture, before urbanisation and is in fact part of our genetic nature, although as a non-expert on genetics, I thought this particular bit of the argument involved quite a lot of “It is a reasonable guess that…”. The book canters through history from the dawn of time, touching on everything from natural selection to the specifics of the Industrial Revolution. If, like me, you’ve read Paul Seabright’s [amazon_link id=”0691146462″ target=”_blank” ]Company of Strangers[/amazon_link] and Ian Morris’s [amazon_link id=”1846682088″ target=”_blank” ]Why The West …. For Now[/amazon_link], and some economic histories like Greg Clark’s [amazon_link id=”0691141282″ target=”_blank” ]A Farewell to Alms[/amazon_link] or David Landes’ [amazon_link id=”0349111669″ target=”_blank” ]Wealth and Poverty of Nations[/amazon_link], a lot of this material will be familiar. But for everyone else, The Rational Optimist gives an accessible and useful overview of the wide range of material. And there were inevitably some new nuggets of information – I didn’t know the Calico Act of 1722 banned the wearing of cotton in England – and was not repealed until 1774.

I share Ridley’s conviction that specialisation and trade are the key to improving the well-being of people in general, even if not that of specific producer groups, like English textile manufacturers of the 18th century. I also very much enjoyed his spluttering against what he calls the ‘green chic’ movement, rich people who enforce totemic beliefs about what is ‘natural’, often to the detriment of poor people – or even the environment. Ridley is acid about the environmental movement’s opposition to GM crops, for example, and with the authority that comes from genuinely understanding the genetics.

Why does protectionism recur again and again? The book suggests it is part of an inevitable cycle of a society’s decline. Trade creates a surplus which is increasingly appropriated by rulers or governments, encouraged by producer interests, or by priests or intellectuals who do not like the fact that nobody is in charge of trade. I think he underestimate the support protectionism gets from many citizens who do not like uncertainty or change. After all, specialisation is disruptive of livelihoods. This is an issue I touched on in my 2001 book,[amazon_link id=”1587990822″ target=”_blank” ] Paradoxes of Prosperity[/amazon_link]. Nor am I wildly optimistic about averting protectionism during the current economic crisis – let’s hope this is wrong, but rational pessimism could be more in order for the next few years.

[amazon_image id=”0007267126″ link=”true” target=”_blank” size=”medium” ]The Rational Optimist: How Prosperity Evolves[/amazon_image]

Austere times have in the past been paradoxically creative periods. In responding to the Great Depression, FDR included the arts in the Works Progress Administration alongside roadbuilding. Keynes made the formation and generous funding of the Arts Council in 1946 a central thought in rebuilding the UK after the horror of war, and just as its enduring financial and physical costs became fully apparent. Of course, good times are good for the arts as well. The economic Golden Age of the later 1950s and 1960s were the most generous period for funding the arts, and stimulated great innovation and experimentation.

But I’m not thinking about the production of artistic works so much as their ‘consumption’. When a society experiences difficult times, shared artistic evaluation becomes important, for several reasons – as a conversation about what people are experiencing, as a means of escapism, as a symbolic statement of values. This essay by J.B. Priestley in his 1949 collection [amazon_link id=”1905080670″ target=”_blank” ]Delight[/amazon_link], put it very aptly:

“What is the use of our being told that we live in a democracy if we want fountains and have no fountains? Expensive? Their cost is trifling compared to that of so many idiotic things we are given and do not want.”

The creation of the arts can be funded either privately or publicly, and the act of creation may take place inside one person’s mind in inescapable privacy; but any example of art that is not experienced jointly and debated is really consumerism, not creativity. I was struck by the importance of the social context reading this very positive review of Jonah Lehrer’s acclaimed new book [amazon_link id=”184767786X” target=”_blank” ]Imagine: How Creativity Works. [/amazon_link]The book is about the neuroscience of creativity, what happens in the individual brain. But societies as well as individuals create. Recognising that social outcomes are greater than the sum of individual outcomes was Keynes’s true and enduring legacy.

[amazon_image id=”184767786X” link=”true” target=”_blank” size=”medium” ]Imagine: How Creativity Works[/amazon_image]