Sunday, 23 October 2016

If There's One Must-Read Book Of The Past Few Years, I Think It Is This One....

In my opinion, one of the most important books in recent years is Matt Ridley’s Evolution of Everything - it's one of the few books in the modern era that I think can justifiably be called a must-read book.

After his excellent works The Red Queen and The Rational Optimist, Matt Ridley’s Evolution of Everything makes the case that bottom-up evolution rather than top-down design is the main driving force that has shaped much of culture, technology and society, and is shaping our future.

He argues, quite rightly that change in technology, language, morality and society is incremental, inexorable, gradual and spontaneous, and that much of the human world is the result of local human action, not of centrally planned human design; it emerges from the interactions of millions, not from the top down organisations of a few.

I should say, though, that while it's true he covers a wide range of topics, and gets most things right - from the internet to bankers, from crop circles to education, from the nurture vs. nature debate to technology, from mind to money, from genes to morality, and many more topics - the book is not perfect by any stretch of the imagination.

Some of the arguments involve selectively loose cherry-picking which is offered up to conveniently support some of his contentions at the omission of perfectly good contra-examples. And in a couple of the chapters, the one on religion being the best example, he builds too many presumptions on top of the central thesis of the book.

The other thing worth saying is that although the book is a very good compilation of how relevant the bottom-up understanding of society is to the reader, it's not as though this is the first time it has been argued. In fact, the book itself is based on the prescient wisdom of Lucretius in his masterpiece De Rerum Natura - (a work I've read multiple times, and one that seems more impressive each time I read it).

Evolution of Everything is also underwritten by decades of formal contributions to economics from the likes of Bastiat, Smith, Ricardo, Coase, Marshall, Hayek, Schumpeter, Mises, Hazlitt, Rothbard, Sowell, Friedman, McCloskey and Boudreaux, about how markets and society evolve primarily through local transactions, not command economies from on high.

It's a must-read for precisely the reason the critics hate it - because it involves a revolutionary (if long-standing) message that the majority of people haven't intellectually assimilated or emotionally accepted. That when left to act freely in accordance with our local initiatives, we frequently bring about societal progressions, economic growth, increased prosperity, reductions in global poverty, and an enhanced well-being and standard of living that puts to shame the self-serving and misjudged attempts to engender this from on high.

It's a message I, and many like me, have been trying to get across for years - one that is anathema to the politicians, ideologues, demagogues, self-appointed authority figures, socialists, environmentalists, cult leaders, and eco-warriors alike - that evolution is a phenomenon that extends far beyond the natural selection of biology. And that things that are widely believed to be the sovereign brainwork of the controlling few, such as morality, the economy, technology, science education, government, money and all manner of cultural norms - are actually, in Ridley's words, "phenomena of evolutionary emergence — of complexity and order spontaneously created in a decentralised fashion without a designer."

Bottom up, not top down
Central to the message is not just that bottom-up evolutionary emergence usually does a better job of organising and innovating that top-down control freakery; it's that the myth that nothing would ever get done without human direction from on high is a continually stultifying, misleading and damaging myth  - not just because of the deadweight costs and inefficiencies it imposes on societies, but because it persists with the precarious cult of personality and perpetuates Thomas Carlyle's anachronistic Great Man theory.

It is all too easy to tendentiously ascribe great theories, ideas and discoveries to great figures in history. As we know, Newton is most closely associated with the incipient knowledge of gravity, Maxwell with electromagnetism, Smith with free markets, Darwin with natural selection, Mendel with genetics, Einstein with relativity, Watson and Crick with the double helix of DNA, and so on. But those theories, ideas and discoveries didn't occur in a vacuum, they were a large group effort, and if it had not been them it wouldn't have been long before other names would have been the associative names.  

Perhaps the best living example of the phenomenon of the evolutionary emergence of a thing of complexity and order spontaneously created in a decentralised fashion without a designer is the means by which you're reading this - the Internet. Nobody sat down one day and planned the Internet as a fait accompli phenomenon - it is a global system of interconnected computer networks that evolved over time, and is still evolving, in a cumulative step by step process of trial and error that tailors to our tastes and needs.

The emergence of the Internet - like cities, cars, houses, clothes, supermarkets, science and medicine - was driven by consumer demand, be it for global communication, widespread knowledge, online shopping, social networking and the countless other benefits it brings to human beings all across the world. It provides a microcosmic example of markets in general - where the complex emergence of order occurs not from being designed top down, but by a long natural selection-type process of good and useful ideas surviving, and bad ones being weeded out.

The same is true in pretty much all walks of life. Leading figures in history don't really proscribe morality, Chancellors don't really run economies, Prime Ministers don't really run countries, and singers don't really catalyse brand new genres. Of course, individuals can be influential and help the world along, but one of the most perpetuated fallacies throughout history, and still alive and kicking in the present, is that these things are planned and designed rather than evolved on a trial and error basis.

The rational calculations of trial and error are the driving force behind our progression, not top-down prescriptions. The theologian that tells you how to be a good person, and the moral philosopher who enunciates the rules for being an ethical citizen are basing their precepts on what humans have already worked out over lengthy execution time through the evolutionary basis of trial and error.

Attitudes to sex are an interesting example of how evolution of thought changes thinking. Once upon a time homosexual practices were utterly frowned upon by large swathes of society, and punishable by law. At the same time attitudes to under age sex and abuse were relatively relaxed. Fast forward a few decades, and now (thankfully) the opposite has occurred in both cases - society is much less tolerant of under age sex and abuse, and homosexuals can live freely and openly in a more tolerant society.

This example, and many others like it, demonstrates how much our morality is an evolved, learned phenomenon. It's also a fact that the more economically developed and prosperous nations have become, the better their citizens have behaved. Similarly, the more state-oppression, dictatorship, and lack of basic rights seen in history, the worse they've behaved.

The main cause of why people are still stuck in poverty is the unaccountable power of corrupt self-serving politicians against citizens that lack the basics required to be a successful trading nation with access to the global free market economy. Corrupt officials and poverty-stricken citizens are sprung from the same root. This was true for most people for most of human history - now it's still only true for a proportion of people alive today, but still true nonetheless. 

The places where people struggle most are the places where politicians live parasitically off the fruits of the citizens' labour. While once it was primarily for luxury and war, now it is for control and indulgence off the backs of people who've not yet won the battle over the state for free trade, private property rights, stable rule of law, limited political interference, lower taxes and personal liberty.

Darwinian efficiency
What's most vital in all this is that the Darwinian model of natural selection is by far a more efficient and powerful driving force for improvement, prosperity and advancement than any top-down designer, precisely because it is the accumulation of individual efforts into one grand collective effort that sows the seeds (as Leonard Read's tremendous essay I Pencil shows better than anywhere else I've seen - all of our technology and material accomplishments are made by a cooperative endeavours, not by the few people associated with such gadgets).

The energy revolutions that have helped reduce our human effort and replaced it with the harnessing of animals and machines have mirrored nature's law of least effort in providing a correlation between energy expended and progress rapidity. A train being able to get us from A to B quicker than on foot, or a machine that can pack meat into tins quicker than the human hands, are the kinds of progress that when aggregated lead to, on average, a person in country A that consumes 7 times the energy of a person in country B, and one who is likely to be about 7 times richer too.

There is also an interesting observation by Edward Glaeser about the near perfect correlation between urbanisation and a nation's prosperity - that is, the countries where the majority live in cites are wealthier (about four times wealthier) than countries where the majority live in rural districts. Further, the faster the city grows in size, the more efficient it grows per head, largely due to the benefits of recombination of ideas in densely populated areas.

A term called Schumpeter's gale (coined by economist Joseph Schumpeter) is a term that observes that market progress is built on both failures and successes - what he called a 'perennial gale of creative destruction'. In other words, for the economy to progress with strong businesses that have the innovative impetus to survive, it must also contain less-strong businesses whose lack of success makes them fragile to the point of discontinuing. Schumpeter, in using a Darwinian analogue, called this 'industrial mutation'. And as another fine economist, Ludwig von Mises (1881-1973), was shrewd enough to point out in the 1940s:

"The real bosses, in the capitalist system of market economy, are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterpriser. They make poor men rich and rich men poor. They are no easy bosses. They are full of whims and fancies, changeable and unpredictable. They do not care a whit for past merit. As soon as something is offered to them that they like better or that is cheaper, they desert their old purveyors. With them nothing counts more than their own satisfaction. They bother neither about the vested interests of capitalists nor about the fate of the workers who lose their jobs if as consumers they no longer buy what they used to buy."

Émile Chartier had a lovely way of analogising this:

"Every boat is copied from another boat. Let’s reason as follows in the manner of Darwin. It is clear that a very badly made boat will end up at the bottom after one or two voyages, and thus never be copied. One could then say, with complete rigor, that it is the sea herself who fashions the boats, choosing those which function and destroying the others."

The upshot is, the free market is the place where free citizens drive the outcomes - we are the bosses, which is why the things the agents in question govern have the highest probability of being the most efficient. As Matt Ridley reminds readers in the book:

"It is axiomatic among right-thinking people that there are many things the market cannot provide, and therefore the state must.  The sheer magical thinking inherent in this thought is rarely examined.  Because the market cannot do something, why must we assume that the state knows better how to do it? Take six basic needs of a human being:  food, clothing, health, education, shelter and transportation.  Roughly speaking, in most countries the market provides food and clothing, the state provides healthcare and education, while shelter and transportation are provided by a mixture of the tow - private firms with semi-monopolistic privileges supplied by government:  crony capitalism, in a phrase. Is it not striking that the cost of food and clothing has gone steadily downwards over the past fifty years, while the cost of healthcare and education has gone steadily upwards?"

Here's something I find quite intriguing about human progression
This section is probably interesting enough to justify its own separate blog post - but anyway, you may have noticed that more than ever before the world's two dozen most advanced economies are knowledge-based economies - service and technology based expertise are at the forefront of their growth, not the sweat and toil of manufacturing goods, and obviously not agrarian labour.

There is a good reason for this - we progressed from agrarian to manufacturing to knowledge-based economies, as did a handful of other countries that did so at roughly the same pace. All the other advanced economies did so, or are doing so at a slightly slower pace, and there is good reason why.

Not all countries will progress at the same rate - there will always be countries that get their foot in the door first, and are then followed by others. But what underpins this truth is something even more fundamental and revealing - it is probably impossible to jump the natural threefold order of progression: that is, it is probable that every country on the road, from majority poverty to majority well off, has to go through the threefold process of being agrarian, then manufacturing, then knowledge economies.

We see a lot of frustration that some countries are developing more slowly than others, but given that we established that no authority figures control economies, they occur bottom-up and are driven by the people, it could be that every country that is going to progress or advance has to go through the quite hard and labour-rich process of being a manufacturing country first before it becomes as prosperous as the world's leading economies (and even then, things like geography, climate and political situations in neighbouring probably will continue to have a bearing).

I suppose the logic is obvious really - it's difficult to become a financial service economy until you have gradually harnessed the infrastructure through the manufacturing process. National and international progress, again like biological evolution, occurs in small incremental steps, not giant leaps (the only caveat to this is that now so many countries are advanced, and now everyone is globally connected, it's quite likely that the developing nations will have a leg-up in their own version of the progression explosions we enjoyed when no one else was prosperous 200 years ago).

The other remarkable thing, as Matt Ridley points out in the book, is that inventions pretty much always come along at the right time - there are rarely products or services that come along years too early or years too late. Think about it; when have you ever known a good to be invented and sit idly for a lengthy period of time until we developed the technological wherewithal to utilise on it? Equally, when have you ever identified a desperate societal need for something and found we had to wait a lengthy period of time for it to be introduced? The answer is pretty much never.

And the reason is fairy obvious - technological emergence is concomitant with the whole nexus of other emergences - they interrelate, and they emerge in the period of time when they would be most use for a particular industry. Required innovations find their innovators rather than the other way round. Gloves find hands and glasses find eyes, not vice versa.

Patterned evolution
As we now know from reading works like Richard Dawkins' The Selfish Gene, the body of an organism is a mere vehicle for the genes to propagate themselves. It is the selfishness of the gene that is the primary driving force for the survival of the organism (same with markets) - it is these acting in accordance with local effects that goes on to produce the splendour we see in the biological diversity of plants, fungi and animals.

Any system where information is transmitted, provided there is reproduction fidelity and random elements, should mirror the evolutionary process we see in biological kingdoms, including ideas and the sharing of knowledge. It's a sobering thought, but had the materialist philosophies of Democritus, Epicures and Lucretius - particularly the idea that nature is made up of constituent parts - not been both suppressed and surpassed by competing monotheistic theologies of the era, we probably would have known about many of the post-1550 scientific discoveries long before we did.

Final word
To finish, we said earlier that the Internet is perhaps one of the best analogies of microcosmic free market in action - it has evolved into a wonderful nexus of human activity, all unplanned, all emerging from local incentives and bottom up ideas. On top of that, it should also be noted that if you transported an arcadian farmer from his habitat to the present day and showed him the Internet he would think it too sophisticated and complex to have emerged evolutionarily, and far too wonderfully ordered to be the result of local evolutionary emergence.

Yet if you apply Leonard Read's I Pencil model to something as complex as the Internet you'll find it takes something as prodigious as the collectivised human species to design something like it. Further, just imagine how much we'll take our sophisticated emergence in the years ahead - imagine the future digital democracy (as some have called it), is ability to share more and more ideas, and make people accountable like never before - what people from Lucretius to Ridley have posited is just the beginning.

Think back to a few hundred thousand years ago, and consider those primeval grunts from our ancestors as they began to make sense of their surroundings. They never could have imagined that those inceptive primate sounds would one day evolve into the entire world of languages, literature, poetry, philosophy, science and technology that we have today. And just as Lord Of The Rings, the Manhattan skyline, space travel and the Hadron Collider would have been far beyond the imaginative precipitations of our primeval ancestors, so too is much of humanity's future evolution beyond us today.

We are picking up pace in this modern age as we reach new heights and new depths in shorter passages of time - and the driving force behind this is bottom up, local ideas, as people gradually wean themselves off the old top-down ways of thinking. I think that is the essential realisation that the greatest number of people need the most, and Matt Ridley's book Evolution of Everything is a good place to start.