'Chiefs, Thieves, and Priests'

Science writer Matt Ridley on the causes of poverty and prosperity

Ronald Bailey from the February 2009 issue

(Page 3 of 4)

reason: So periods of rising productivity are choked off by institutional barriers. You get an over-elaboration of rules and regulations and taxation. And that’s what killed them off, not lack of fuel or lack of ingenuity, but governance that just got so bad that it stopped it. Is that plausible?

Ridley: I think that’s a big part of it. How does that fit with my story that it shuts down because of a Malthusian thing or diminishing returns on sources of energy? Do they go together, or does one explain one collapse and another explain another? I don’t know. The problem with history is it tends to be overdetermined. You’ve got lots of different things happening at once.

If we were having this conversation in 1800, I think I would have very good reason for telling you that however wonderful the prosperity you can generate by elaborating division of labor and specialization and exchange, you’re never going to be able to escape this trap that living standards don’t seem to be able to go up faster than the population. But we’re not having this conversation in 1800, and we’ve had 200 years in which we’ve shown that you can actually have a dramatic transformation of living standards in a very large portion of the world purely by elaborating the division of labor, as long as you’ve got energy amplification in there too.

reason: [Yale economist] William Nordhaus would say that at least 50 percent of economic growth in the 20th century is because we’re using better recipes, which is better technology.

Ridley: Absolutely. The compact fluorescent light bulb is a better recipe than the filament light bulb, which was better than the kerosene lamp, which was better than the tallow candle. If I overemphasized energy, maybe it’s just because I’ve been recently reading and writing on that subject. The proximate cause of our prosperity is technology. I quite agree.

The ultimate cause of technology is division of labor, though. The man who made a mango slicing machine in 1800 would have been lucky to sell 20, because he only had access to his village. Now he can have access through the Internet to the world, so it pays him to make something as specialized as a mango slicing device. And that makes living standards rise. My standard of living has risen because a man has made a mango slicing device that I really can use.

But I also need an awful lot of watts to run my lifestyle: to turn on the lights, to drive the machine that made my mango slicing device, to provide me with the transport that I deem necessary to make my life interesting, but in particular, to drive those container ships that are bringing my mango slicing devices from Korea.

The fact that I can now earn an hour of reading light with half a second of work, if I’m on the average American wage, whereas it took eight seconds in the 1950s, releases me to go and spend another seven and a half seconds consuming some other kind of energy, like driving my power boat across a lake where I have a recreation home which I’ve driven to in my 4x4, or even just deciding to leave the light on all night so that my daughter doesn’t have to worry about being left in the dark.

reason: Flipping this around a little bit, what’s the cause of poverty in the modern world?

Ridley: I think lack of access to networks of exchange and specialization is the principal cause of poverty. If you find yourself in a position where you make everything yourself rather than buy it from someone else, then you are by definition poor.

Now, I buy the argument that it is possible to be poorer in the modern world than it was a couple of hundred years ago because the diseases that would’ve killed you a couple of hundred years ago can be prevented. It is conceivable that some people in Africa are living at a lower standard of living than anyone was 200 years ago.

reason: Of course, living might be considered a higher standard of living than dying.

Ridley: Well, exactly. To get hopeful, is Africa really that different from South Asia in the ’60s and ’70s? The standard of living is rising in most of Africa. There are parts where it’s not—in Congo it’s not, but in Kenya and Ghana it is. They’re not great, these countries, but they’re not regressing. The health outcomes are improving pretty dramatically, child mortality in particular. Fertility is falling, as it does after child mortality has started falling.

And you also have got the beginnings of an explosion of entrepreneurship that will allow them to leapfrog onto new technologies that were not available. The lack of decent telephone networks means that they’re going straight into a mobile world. Mobile telephones are amazingly ubiquitous in Africa, even among people who are not particularly well off, often in a form of shared ownership. Just look at the effect that that’s had on Kenyan farmers finding markets for their produce. They call ahead and find where the best prices are and send their produce there.

reason: I was at a Cato Institute function where the British development economist Peter Bauer was giving a lecture, and I had a really smart-ass question: Isn’t the problem with a lot of poor countries, Africa in particular, that there’s corruption and we have to get rid of corruption? And he leaned back on the podium and smiled and shook his head, no. And he said when the United States and Britain were developing in the 19th century, their governments were as corrupt as anything you’d find in Africa, but the governments in Britain and the United States had control of 1 percent or 2 percent of the economy when those countries were growing. In many African countries, the government controls over 60 percent of the economy. That’s the difference.

Comments

|1.7.09 @ 1:10PM|#

He says, "Priests-well, I must admit I don't think one can necessarily blame religion for shutting down trust, trade, and exchange. But there's little doubt that it didn't help in the Middle Ages, surely. I won't go further than that."

So... he just used the word 'priests' in the title of his book because it made the title look better and a bit catchier-sounding? And maybe because it's OK to smear the priest class these days?

That's really crass.

Franklin Harris|1.7.09 @ 1:26PM|#

No. If Ridley had wanted to smear priests, he would have used the synonym "boy-buggering frauds."

|1.7.09 @ 1:42PM|#

I think the "Hit & Run" article is titled "Chiefs, Thieves and Priests", not Ridley's book(s).

|1.7.09 @ 1:45PM|#

Kris is right.

|1.7.09 @ 4:11PM|#

Sorry, I thought 'boy-buggering fraud' was a synonym for 'Massachusettes Congressman'.

My apologies to Mr. Ridley. I guess Mr. Bailey is the one who is crass for grouping thieves, priests and a crappy football team from Kansas City.

BlueBook|1.7.09 @ 7:43PM|#

I think chiefs, thieves and priests all have the same impact on an economy, they just go about it in different ways.

Kolohe|1.7.09 @ 8:12PM|#

"Chiefs, Thieves and Priests" would be a great name for the new book, though, if it covers the themes in this interview. If I was Ridley's publisher, I'd pay off Bailey for the rights to it.

What I'm still trying to get my head around, though, is the passage on how increasing population density leads to a reduction in the division of labor. Specifically this passage:

"at a certain point the population density gets too high for people to be able to generate a surplus of consumption income to support trade and specialization by others, and you have to go back to being self-sufficient."

I am not understanding how this works as an *economic* principle. Now, it makes perfect sense as a socio-political principle - namely, what he talks about in other parts of the interview regarding 'trust'. Once you get to a certain population, where your next meal comes from likely becomes more uncertain, causing you to retreat into self-sufficiency as an insurance policy. But I don't understand how his mechanism of 'insufficient surplus income' operates differently than straight up pre-industrial maluthusian mechanisms - a distinction he makes.

The only other quibble is that while the 'demand side' part is important to specialization and economic growth, he seems to entirely discount the 'supply side'. For instance in his 'mango slicer' parable, it would also have been likely for the man to invent a mango slicing machine if he's in a forest full of mangos - even if he and his town are the only ones that are going to use it. The benefit of globalization, is that, in theory at least, those Mango Machinists are able now to expand their comparative advantage into the entire world. (Incidently, describing this mechanism is how Krugman won his nobel prize)

Guy Montag|1.7.09 @ 10:20PM|#

Ron,

Why did Reason use a picture of you from 20 years ago for this story?

|1.8.09 @ 4:04AM|#

[Ridley]:... Priests-well, I must admit I don't think one can necessarily blame religion for shutting down trust, trade, and exchange. But there's little doubt that it didn't help in the Middle Ages, surely. I won't go further than that.

reason: They did try to adjust prices in the marketplace. Whether that actually had an effect I don't know.

Ridley: Usury laws and that sort of thing. That's exactly right.

What the ...? Yeah, that's just really bizarre. I can't figure out why "priests" were even mentioned, except that maybe somebody doesn't like them.

It's as if the title of the article were "Statism, Misinformation and Snakes" and ...

BAILEY: So the greatest threats to American liberty right now are statism, mis-education, and snakes, right? Explain.

RIDLEY: Right. See, a pervasive statist philosophy [blah, blah, explains persuasively].

And the fact that many Americans are poorly informed means that they don't understand how liberty works and [blah, blah, explains persuasively].

As for snakes ... well, I must admit, I don't think you can necessarily blame snakes for endangering American liberty. But they certainly aren't helping much, that's for sure. I won't go further than that.

BAILEY: Poisonous snakes do sometimes bite people who are pro-liberty. Whether that actually has any effect on the struggle for liberty, I don't know.

RIDLEY: Yes -- see, snake venom attacks the central nervous system, which makes it hard to think about liberty. That's exactly right.

****************************

It's just ... bizarre.

Guy Montag|1.8.09 @ 6:56AM|#

Stevo,

Snakes were probably featured on many early flags of independence because of this. Perhaps the Reason foundation will fund a research study?

BlueBook|1.8.09 @ 7:27PM|#

Snakes are far more totalitarian than is generally known, but the evidence of this is suppressed by the influential pro-ophidian lobby.

Jeremy|1.13.09 @ 4:24PM|#

Well, here on Reason it seems that you have to bash religion in equal proportion to thieves and totalitarians.

Usury laws? Wow, that's a stretch.

How exactly did the priesthood hurt the economy during the Middle Ages?

By establishing the university system?
By preserving nearly all of the ancient writings of the greeks and romans that we have today?
By preserving such technologies as irrigation, and writing?
By promoting the idea of an ordered universe that obeys laws of nature (which paved the way to the scientific method)?
By creating an international banking system (the Templars) that stretched from England to the Middle East?

Okay, we all know that Reason mag hates religion, but come on, at least when the title of your book blames Priests, along with Thieves, for the destruction of the economy, come up with at least ONE example. Even one as lame as usury laws.

Nathan Bowers|1.16.09 @ 9:14PM|#

Re: "Priests"

Monks that kept to themselves making beer and manuscripts were great, but the Church was mostly about transferring wealth and power to itself.

Today's Islamic extremist clerics count as priests and they certainly are on the wrong side of classical liberalism.

Religion + Power = Suck