The Rational Optimist: How Prosperity Evolves

Humans have come to dominate the world through innovation. People can build upon knowledge and others' work to create new things. Even something simple like a pencil is behind the scope of any single person to easily create on their own. They would need to cut down trees, mine metal, and do all the work to shape and form it. It would be a daunting task. Today it is easy to buy a pencil at the local store. Many people have been involved in the process to make the pencil, yet they  don't have the knowledge and skills outside their realm.

The author has great faith in the ability of humans to innovate their way out of problems. However, he has little faith in us being able to predict what innovations will take place. He sees government intervention as often a fools errand. Subsidizing big companies that were previous innovators merely delays their eventual fall. The smaller, newer, more nimble organizations are the ones that provide most of the advantage to society. These small companies then become big ones and often ossify. Governments tend to favor them because they are big, yet that is a mistake. Governments also attempt to regulate activities based on what is currently known. This can interfere with truly useful innovations. Many of the problems in poor countries can be traced to rent-seeking leaders. The institutions are corrupt making it difficult for anything to get done. Even with foreign aid, the poor often remain poor, while the leaders are getting rich.

The author has little respect for pessimist alarmists. Negative fear-mongering does get a lot of coverage. He catalogs big fears such as "overpopulation", "acid rain" and "global cooling" that have all fallen by the wayside. Today, "global warming" is the boogeyman. He acknowledges that the earth is warming, but objects to many of the actions that are taken. Climate change will cause changes. However, humans have always dealt with climatic changes, and could continue to deal with it. Even in some of the worse case scenarios, the total risk is not worth significant societal changes. 

The "fixes" can be worse than the problem. Some of the "renewable" resources such as biofuels require great amounts of land and can be a net negative for climate change. Even "green energy" like wind is very inefficient. Legislation often greatly subsidizes forms of "green" energy production we know about, which my stall some of the needed innovation. Fossil fuels are amazingly efficient and have replaced previous forms of energy (such as slaves and animals). They have also long outlasted their predicted depletion thanks to increases in extraction and usage efficiency. We likely have a solution to our energy problems waiting to be created. The solution probably is not something that we think of (electric or self-driving cars), but instead something totally new.

Is there a limit to how we can innovate out of our problems? Yes. This has been seen in previous cultures. In the middle ages, both China and the Muslim chose stability over innovation. Government policies have often forced innovation down the wrong track. Perhaps we will run into something that we just can't make better. However, if we do, government will not be able to help us.