Ridley’s Take: Part 2

As Ridley writes in How Innovation Works, crucial to all progress is trade: “The chief way in which innovation changes our lives is by enabling people to work for each other.” We become steadily more specialized in what we produce in order to be steadily more diversified in what we can consume.

In an insight that should be pondered by both the Trump administration’s trade warriors and its counterparts in China, Ridley points out: “We move away from precarious self–sufficiency to safer mutual interdependence.”

There are many more luminosities in his current work. But in the throes of the climate change cult, it is worth first returning to his environmental critique in The Rational Optimist. Because Ridley flaunts his ownership of coal mines, his elegant, learned, and cogent defense of fossil fuels incurs the usual critique of self–interest that self–indulgent academics wield against their entrepreneurial benefactors.

Coal is the environmentalist’s ultimate evil: a black distillation of carbon, pouring out pollution, stripping vast acreage of forest and topsoil, chopping off mountaintops, loading the lungs of miners, darkening the skies of cities. Ridley boldly demonstrates that these evils are merely diminutive echoes of the evils produced by so–called clean power.

The industrial revolution, he writes, shifted the world from recent solar power (burning trees, catching wind, feeding grain) to tap “solar capital laid down some 300 million years before.” Ending all previous economic booms were busts that occurred when “renewable sources of energy ran out: timber, cropland, pasture, labor, water, peat.” All were self–replenishing, like wind and biofuels today, but “were easily exhausted by a swelling populace. Coal not only did not run out… it actually became cheaper and more abundant as time went by, economic growth only became sustainable when it began to rely on non–renewable, non–green, non–clean power.”

Far from relying on technologies that squander farmland and wilderness to avoid emissions of life–enhancing carbon dioxide, “a sustainable future for nine billion people on one planet is going to come from using as little land as possible for each of the people’s needs.” Nuclear, oil, gas, and coal represent “an almost laughably small footprint — even taking into account the land despoiled by strip mines.”

To Ridley, the ultimate scandal is biofuels, which require that Americans “in effect” be “taxed thrice over” — to subsidize corn growing, support the production of ethanol, and then face increased food prices. But in a globalized economy, such blunders may be absorbed: “The price of wheat roughly trebled in 2006—8, just as it did in Europe in 1315–18. Yet in 2008, nobody ate a baby or pulled a corpse from a gibbet for food.

Interdependence spreads risk.” Echoing Peter Huber’s pioneering Hard Green (1999), Ridley observes that to support the current US standard of living without fossil fuels would either strip most of the world of its trees — including all the rain forests — or require nonexistent trillions of slaves.

“Wealth grows through ‘what Hayek called ‘the catallaxy’: the ever–expanding possibility generated by a growing division of labor,’ while the socialist alternative offers only a Moloch to which to sacrifice human lives in an ever–growing state. To the great consternation of movement “scientists,” Ridley masterfully refutes every pretense of the climate–change pretenders, from ocean acidification and disappearing coral reefs to Al Gore’s hockey–stick graph eclipsing the medieval warm period. The hideous horsemen of the apocalypse — disease, resource exhaustion, infrastructure decay, tribal war — cannot permanently strangle progress, even in long–afflicted Africa. He offers a definitive answer to Galbraith’s idea of rational resignation to an “equilibrium of poverty.”

The Role Religion Plays on Society

Reason, to Ridley’s mind, impels us relentlessly forward and upward. Religion, on the other hand, he sees as a reactionary obstacle to growth, progress, and even morality. He cites, for example, the indignation of Israel’s prophets Isaiah and Ezekiel, along with Homer, against the pride of the Phoenician traders as typical rants of reactionary traditionalists against the creators of wealth.

Instead — echoing his previous books on the evolution of virtue and the superiority of sexual reproduction to reduplicative cloning — Ridley maintains that moral codes naturally evolve from the rise of catallaxy. cultures that reach out to immigrants and new ideas gain cultural and genetic innovation. As wealth grows, population growth relents; women instead release their energies into the marketplace.

Ridley’s inspiring vision is full of fascinating insights. But by exaggerating the sufficiency of unaided reason, Ridley fails to confront the current predicament of remorselessly secular Europe and even secular China — where women are bearing children at a rate that ensures ever fewer workers to support the throngs of retirees, remittees, and welfare parasites.

The collapse of Judeo–Christian religion enables the ascendancy not of rational enterprise and feminist productivity but — as minarets sprout in European cities — of a patriarchal and often barbarous Jihadism that prevails through raw fertility, masculine ferocity, and lethal anti–Semitism. Secular culture seems to harbor an inexorable bias toward sexual suicide and socialist stagnation. (The US and Israel currently resist the demographic sink chiefly through the fertility of their religious minorities).

Religion projects a society into the future and provides a foundation for a durable optimism. Ridley’s blindness to religion stems from reliance on Darwinian materialism and Smithian catallaxy as sufficient sources for wealth and morality. He insists that economic growth is driven by consumption and governed by the emergence of “spontaneous order.”

Thus, he shares Hayek’s confusion between order, on one hand, and information and creativity, on the other. Order is what is not spontaneous; it is the opposite of information and creativity. Order is an effect of institutions, legal protections, stable currencies, and social regularities such as family and tradition. It is not bottom–up but largely top–down.

In terms of information theory, order is low in information (it is low in “entropy,” and in surprises) but indispensable for creativity. It takes a low–entropy carrier (one in which there are no surprises from intrusive governments) to bear the high–entropy, information–rich inventions that drive economic growth.

Citing the reductionist schemes of Paul Romer, who considers invention essentially a process of recombining chemical elements or generating new combinations of atoms, Ridley even sees entrepreneurial creations as “mistakes,” like mutations, selected naturally by the “market.” Entrepreneurs are seen as responding to external stimuli in a bottom–up scheme resembling Darwinian natural selection or Skinnerian stimulus and response.

Today’s Prophecy

As supply–siders know, the invention comes first, not the market. A typical invention does not break down the manufacture of, say, carriages, vacuum tubes, or typewriters into fine–tuned components that respond to demands of existing consumers. Rather, the inventor surprises customers with a new system. The car (or transistor or computer) subsumes any existing components into a higher–level machine.

The chief discovery of 20th–century mathematics was the incompleteness of all logical systems. As Kurt Gödel showed and Alan Turing extended to computation, all logical schemes depend on outside axioms that they cannot prove. Turing called them “oracles.”

Entrepreneurial inventions stem from this strict limitation on the determinist rationality of socialism and the emancipation of creativity, which always comes as a surprise to us.

The root of invention is imagination and aspiration, faith, and freedom — the kind of values that sometimes elude the larger philosophies of the author but are manifest in all his superb books.

I prophesize that Ridley’s How Innovation Works will become recognized as an indispensable classic of historical analysis and insight. But that his stubborn denial of information theory will not prevail.


George Gilder
Editor, Gilder’s Daily Prophecy

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