The full video interview between Marian L. Tupy and Matt Ridley can be found here. The transcript is below.
Marian Tupy: Matt Ridley, thank you so much for joining us. I want to start by talking about COVID and then talk about your new book, How Innovation Works. But before doing that, I just want to remind the audience that you're the celebrated author of The Rational Optimist, which came out exactly ten years ago in 2010, and over the last ten years, you have become one of the most prominent advocates and defenders of the concept of human progress. So, let's start there. Maybe you can tell me whether you still remain an optimist in the long run about the future of our species…
Matt Ridley: Yes, I very much do. This current pandemic is a setback, but there have been setbacks throughout the last ten years. I've been going around talking about rational optimism for ten years now, and every year, there has been a reason for people to say, “Well, you surely can't still be an optimist because of the euro crisis, because of the war in Ukraine, because of the war in Syria,” whatever the crisis of the day is. And those are serious crises - as is this one - but that doesn't prevent the fact that this has been an extraordinarily good decade. The last ten years have been unbelievably good for poor people. It's not being quite so good for rich people, but that's the right way around. We'd rather it was good for poor people than rich people.
If you take the continent of Africa for example, the poorest continent and one that ten years ago people were still saying, “You cannot expect Africa ever to see the sort of levels of prosperity or food security that you see in Asia.” Well, actually you are now seeing that. You're seeing incomes double in ten years in some countries. You're seeing warfare become much less common throughout the continent. You're seeing malaria mortality rates down by almost a half. Well, they’ve halved since the beginning of the century, but they've continued downwards at that rate in the last ten years. So, on the whole, in terms of lifting people out of poverty, in terms of reducing child mortality, in terms of defeating infectious disease, including most viruses (but not, obviously, this one yet), we are seeing spectacular improvements. If against that background a pandemic kills hundreds of thousands of people, it's bad news, but it's not as bad news as the good news that is also coming in.
MT: To be sure, in your books and in your talks, you have never claimed that there wouldn't be any problems ahead. Right? In other words, for you and for the matter for me or Steven Pinker, progress is not a linear affair, where there are no setbacks. Do you have any theory on why people keep misunderstanding what we are saying or do they simply ignore the caveats in our work?
MR: Yeah, I think it's a frustrating experience, and you've no doubt had this experience like I have that people assume that you're saying that the world is perfect. Now, curiously, that is the original meaning of the word “optimist.” It was coined by Voltaire, and he was mocking ... well, I’ve forgotten the word, but anyway, there’s a word for the type of people he was mocking.
MT: Is it Panglossians?
MR: “Theodicy” I think is the word. And he invented the character Dr. Pangloss. Well, actually it's a caricature of his lover’s other lover, who was a mathematician friend of Leibniz and was a follower of Leibniz. And Leibniz’s philosophy was that this is the best of all possible worlds, and it cannot be made better. Why? Because God made it, and therefore it must be perfect. That's the argument. It's a very stupid argument, but it's the argument that was made by some people at the time. Pangloss goes around believing this, and he is very nearly killed in an earthquake in Lisbon, and he is nearly hanged but he survives. And he's involved in a disease and a war and all these kinds of things, but he still says, “No, this is the best of all possible worlds.”
And what Voltaire is mocking is the idea that you can't make the world better. And of course, you and I mean by “optimist” someone who thinks that, good though the last ten years was, the next ten years is going to be even better. Because this world is still a vale of tears. There's a lot wrong with it, and that's why it's important to believe in progress, in the ability of human beings to increase their prosperity and their well-being. Because we're not satisfied with what we've achieved so far. It's not good enough. There are still things wrong with the world. It is still possible to have pandemics, and I did say in The Rational Optimist that a pandemic flu may yet kill large numbers of people in this century. I didn't call it COVID, but ten years before that I said that if we do get a pandemic, it'll come from bats and it'll be a virus. So, yes, I did not see one coming as bad as this, but I did think that it was possible. And that is exactly why we need to improve our technology and our society so that next time it comes, it is not such a problem.
MT: It seems to me like in your thinking, you are trying to navigate the middle position. On the one hand, you acknowledge that the world is not a perfect place. It can become better. On the other hand, you don't embrace the utopian position, which is that we will ever reach a place where the world is perfect. Where did the idea come from? Was it an outcome of some sort of strain of Romanticism, of French philosophical thinking, that if we have enough technology, if we have enough innovation, we can make the world perfect for everyone at all times? I don't think you believe that.
MR: No, I certainly don't. I think infinite improvement is possible, and that's quite an interesting contrast with what a lot of environmentalists say, which is that infinite growth in a finite world is clearly not possible. Well, that's not true because growth can consist of shrinkage. It can consist of doing more with less. We do that all the time. We grow more food on less land. We make drink cans out of less aluminum. We make a car out of less steel. So economic growth can indeed reduce our footprint, and there's no reason, therefore, that it can't continue in effect indefinitely, if not infinitely.
So I think improvement is infinite, but I don't think that means we will ever reach a steady state where you wouldn't want to improve it because it's perfect. That sort of utopian view has been the cause of a lot of misery actually in the world over the centuries because utopianists have tended to demand that society be directed from above by wise men in a somewhat fascist way. And we've seen that from Thomas More onwards. Utopias are rather nasty places once you read them. Whether it's Brave New World or Thomas More's Utopia. They turn out to be very unfree. Or Plato's version. They turned out to be very unfree places with a lot of top-down direction. Well, I don't call that a nice idea. I want freedom.
MT: If I'm correct in remembering something I read in Thomas Sowell a few weeks ago, Utopia of Thomas More didn't have money, but it did keep slavery.
MR: That's a very nice example.
MT: That was was the extent of his imagination. But let's move on and talk a little bit about the COVID outbreak. So did we get arrogant and complacent, or is the pandemic a black swan event that nobody could have predicted? In other words, is it our fault, at least in part, or just bad luck? What's your take on that?
MR: No, I don't think it is bad luck. I think people could have predicted it. I think people did predict it. If you look at the writings of a Hong Kong scientist named Patrick Woo, you will see very clear statements. We are now understanding what SARS-like viruses in bats can do directly into people. They don't need much in the way of adaptation through another species, and we know that they are out there. There are many more SARS-like viruses out there, and we know that wildlife wet markets are a very good place to amplify them. And it is nothing short of a scandal that we have not managed to stop those markets from operating. Now, we don't yet know for sure that that is how it got into people, but it does seem to be the leading hypothesis at the moment.
And if prescient warnings like that - and others saying that the more we find out about these bat-borne, SARS-like coronaviruses, the more worried we should be - those prescient warnings were ignored. I'm ashamed to say I didn't read them. Had I read them before this year, then I think I would have taken them seriously, but I didn't come across these until after the pandemic started. So, in that sense, we have every right to be cross with somebody for not paying more attention to what was happening. Now, who should we be cross with? Well, first of all, the Chinese government, which did something about wildlife markets after SARS, but then reversed it and actually encouraged them. And the encouragement of traditional Chinese medicine is a big problem here, and it's a big problem for wildlife as well as for zoonoses. The other people I think we should be cross with are people like the World Health Organization, who came out in 2015 and said that the greatest threat to human health in this century is climate change. That suggests an organization which is specifically charged with looking out for pandemic threats was not looking in the right direction, and it reacted very poorly to Ebola. It reacted very poorly at the start of this epidemic, and big questions have to be raised over that.
More generally, and we may come on to this later in the conversation, we have clearly been neglecting innovation in some of the areas that we need it, such as vaccine development. Vaccine development is still a very slow and laborious process that takes several years in most cases, that is not invested in by the pharmaceutical industry because it's very hard to make money out of a vaccine because the vaccine does itself out of business in short order if it works. And it has not been sufficiently invested in by the public sector either. The Gates Foundation and the Wellcome Trust set up something called the Coalition for Epidemic Preparedness Innovation, which largely focused on vaccine development, but it only started work in 2017 and has hardly made much difference. Why wasn't that done twenty years ago? Why wasn't it done by the World Health Organization?
MT: Speaking about that, there is clearly a mission creep where an organization which was established to take care of one problem extends its tentacles into many other things, thereby ignoring its original mission. This bureaucratic creep, is that something that the public should be aware of? In this country, because Trump has attacked WHO, WHO has now become something of a cause célèbre for Trump's opponents, but I think that regardless of where Trump stands on WHO, people should understand how bureaucracies work. Can you talk a little bit about bureaucracies, and why it is perhaps unwise to put so much about trust and faith in bureaucracies?
MR: Well, I think when the history of this epidemic comes to be written, we will understand that it was a significant example of government failure, not a market failure. That is to say the agencies charged with keeping us safe were looking in the wrong direction, talking about diet and obesity and smoking. WHO was to a significantly large extent. Public Health England, which is our equivalent agency in the UK supposed to be looking for epidemic risks, were spending an extraordinarily small part of its very large budget on infectious disease.
So now why is this? Well, public choice theory tells you that public agencies are not completely neutral organizations that always stick to their mission and are as efficient as possible. They are budget maximizers. They always do. It's in the nature of the beast that when you have a bureaucracy that it justifies this existence by taking on as many tasks as possible and demanding a bigger and bigger budget to do them. And this is where the mission creep comes from, and when Ebola goes away in 2015, the World Health Organization is not going to just twiddle its thumbs until the next epidemic comes along. It's going to start scolding us about our food. It had a huge campaign against electronic cigarettes, against vaping, even though these are saving lives on a massive scale globally because they're displacing smoking.
So I do think that there is a huge problem with mission creep, and it's in the nature of the beast. It's not because there's some evil person in charge. It's because that's what bureaucracies do. They take on more tasks to justify bigger budgets.
MT: In this country, CDC has been particularly bad in the initial stages of the outbreak by basically insisting on the monopolization of testing kits, which I think set us back about three weeks. So that's a perfect example.
MR: And it was worse in this country because we had exactly the same phenomenon. Public Health England insisted on the monopoly for even longer, and they refused to turn to the private sector for many, many weeks. And the countries that went straight to the private sector and said, “Please help us solve the problem of expanding the testing dramatically and supplying the logistics to get results quickly back to people” - South Korea, Germany both did that - both of them have had much less in the way of an epidemic.
MT: You and I have been optimistic for a long time about the advances in genetic science - CRISP-Cas9. We know that we were able to decode the genome of the virus in an extremely short time. What other bottlenecks, in addition to bureaucracy and bureaucratic ineptitude and also our underinvestment and under-appreciation of the state of vaccine development technology, can you identify? What else has gone wrong?
MR: Well, as I said, I think on vaccines, we simply haven't put enough work into trying to work out how to make vaccine development faster and more reliable. Just before the pandemic appeared last year, Wayne Koff, who’s the head of the Global Vaccines Project in New York, said that it's a scandal that our vaccine development platforms are still so slow, and it shouldn’t be beyond the wits of man to come up with them. And I have to say, I was surprised by how slow they are. I write in my book about the development of the whooping cough vaccine in the 1930s, which is a beautiful example of an innovation that never put a foot wrong. It went from an idea to a workable product in about four years. It was two brilliant women who did it - Grace Eldering and Pearl Kendrick. I think I learned about them from you, actually. I didn't know the story before that.
And that took about four years. Well, it takes about four years now to do a vaccine, so that's quite shocking when you think how much faster gene sequencing has gotten. The other example I was going to give is the development of tests. Diagnostic tests, DNA tests for our viruses are medical devices. They get licensed by the medical device licensing authorities in different countries: the European Medicines Agency in Europe, can’t remember what it's called in the US. And they are very slow at approving new devices.
MT: It's probably the FDA.
MR: Exactly. They take on average twenty months to approve a new device and, in some cases, up to seventy months. Well, if you're an entrepreneur who wants to develop a quick but accurate DNA test for infectious diseases and you're faced with the problem that as soon as you've got a working prototype, it's going to take you three or four years before you get regulatory approval for it, you're going to go off an invent a consumer electronics device instead. Because you can't afford to wait around. Your investors can't afford to wait around for three or four years running out of money until you get regulatory approval. It's not the problem that the regulators are saying “no,” it's that they're taking a very long time to say “yes,” and the degree to which that has deterred innovators from coming into the field of diagnostic testing is a big issue that we need to think about.
MT: So this would be a perfect segue to talk about your new book, How Innovation Works, and so I thought I would start by asking you, what is the connection between innovation and economic growth and then why is economic growth important for health care, education, and many other good things that we all enjoy? Because I think that you would agree that what really distinguishes the last 200 to 250 years from the 10,000 years that preceded it was this massive expansion in economic growth and consequently great improvements in standard of living. So growth seems to me to be the key which then pays for very good health care.
MR: Well, I agree with every word you said. The improvement in economic growth over the last two hundred years is truly extraordinary. Hundreds and hundreds of percent, maybe even thousands, but a many-fold increase in the average income of the average person. Huge increase in lifespan – a doubling basically of lifespan. Huge decrease in child mortality. These are the fruits of economic growth, and they can't happen without enrichment. The word that Deirdre McCloskey uses for the last 200 years is “the great enrichment,” and as somebody pointed out, no country ever dealt with a health problem by getting poorer. You deal with a health problem by getting richer.
But Deirdre McCloskey also goes on to say that the phenomenon that caused that increase in prosperity should not be called capitalism because that implies it's about accumulating capital. It's not about piling bricks upon bricks or dollar bills on dollar bills or even graduate degrees on graduate degrees, as she put it. It's about innovations. She says we should use the word “innovism” and actually, it's quite a good word - I rather wish I'd used it for the title of my book - because the vast majority of those improvements didn't come about because we found more land or employed more labor. They came about because we invented devices that enabled us to produce products in less time and for less work, so basically, they were labor-saving and time-saving devices of all different kinds, whether it's the car instead of the horse or the mobile phone instead of the postman.
There’s no doubt that most of our enrichment has come from innovation. It's the huge theme of humanity. It's also what lies behind the things that have gone wrong. It was innovation that led to new weapons, innovation that's led to social media disagreements. All these different things come from innovation, so it's the big theme of the human race over the last 200 years, and it deserves to be understood. And it's surprisingly poorly understood. That's where I start my book, saying, look, we know this phenomenon matters, but we don't fully understand why it happens when and where it does.
MT: I know where you stand on the fundamental elements of where innovation comes from and it has to do with liberty. Can you talk a little bit about innovation and liberty, and how the two are connected?
MR: Yes, well if you look historically, you find that innovation comes from relatively free societies. Empires are not very good at it. The Ottoman Empire, the Roman Empire, the Ming Empire, the British Empire, these aren't particularly good at innovation. What is good at innovation is the city-state, so whether it's the ancient Greece or the Italian Renaissance or indeed China under the Song Empire - which was a very decentralized empire, you find that the freedom to experiment is absolutely crucial because there's a huge element of serendipity in innovation. It doesn't tend to go the way you think it's going to go. You can plan to invent something, and you will almost certainly be wrong. You'll either invent something else, or you'll get there by a different route than you thought, and the way you find out how to invent something, how to produce a product that is reliable and efficient and useful and appeals to people, is by trial and error. Every inventor discusses the importance of trial and error, the importance of being free to experiment, free to invest in one thing and not another, free to change course.
And that's why an unfree society, where you have to get permission from the emperor or the bureaucracy to do something first and specify in advance what you're going to do and what you're going to invent and then go ahead and stick to that plan, just doesn't work. For example, the nuclear industry has been unable to experience any innovation in the last fifty years really, and the reason is because regulators demand advanced specification - at huge expense - of every nut and bolt in your design, and you can't change halfway through, and that’s why we've been unable to do the experimental designs to find out what works better than existing designs. We have to stick to old designs in the nuclear industry.
In the digital industry, the opposite has been the case. It's been completely permissionless, to use Adam Thierer’s phrase. Anybody can do anything they like in terms of writing a digital program, it seems, within the law. There are still rules of law, but it's a surprisingly permissive law and it's very deliberately so. If you go back and look at the 1996 Digital Millennium Copyright Act passed by the Clinton administration, you find that it is probably the most libertarian piece of legislation ever passed because it basically says, go out there and start an online business and do what you like. If you have a website, it's a platform not a publisher. We can't sue you. You're free to do what you like and see if you can discover ways of inventing e-commerce. And, sure enough, that's what happened.
MT: That makes me think about the relationship between government and innovation. Throughout human history, or rather since the birth of agricultural societies, governments discouraged innovation because it is very disruptive. Then, in Europe in the second half of the last millennium, something changed in the sense that governments became more permissive to innovation. Now, Deidre has identified cultural change. But it seems to me that there is another component to the liberation of innovation and that is inter-jurisdictional competition. Because you have so many warring European states fighting each other - but at the same time they want to survive - they have to turn to their middle classes and their innovators and say, “do whatever you need to do to produce more wealth and more technology.” Do you agree with the inter-jurisdictional competition idea?
MR: Yeah, it's a very good question. David Hume the philosopher was the first to point out that the reason Europe was stealing a march on China was because it had inter-jurisdictional competition. That is to say, inventors - people like Gutenberg, the inventor of printing - were constantly moving from one place to another to find a congenial regime that would allow them to do what they wanted, and states, particularly in Germany which was very fragmented at the time, were competing to attract and sometimes to kidnap inventors and keep them in place. So actually, it's very clear that the fragmented governance is very helpful to innovation.
We've had a beautiful example of that, funnily enough, this week. Elon Musk tweeted that he was so cross with California's new plans for some kind of tax that he was going to move his entire plant to Texas, which treated entrepreneurs like him better. That's exactly the point, and that's exactly why America is the exception that proves this rule. Because you might say that America is one big country. It's an empire. It's like Ming China. Why is it good at innovation? Because it's not like Ming China. Because it's always had different states with different policies. California produced a particular combination of circumstances and incentives that enabled the digital industries to take off to an extraordinary extent for example, and it now seems to be killing the golden goose that laid those eggs. And Texas may be taking up the challenge, so I think it's exactly right that fragmented governance works.
How does that apply to Brexit and the European Union? Well, very simply, because the European Union is an empire. I'm sorry, but it really does believe in centralized, harmonized direction. It doesn't accept that there must be mutual recognition, that if a product is safe in Britain, then it should be safe in France. We will recognize your means of deciding whether it's safe and you can sell it in our country and we’ll recognize yours. No, no, no, the European Union has a quite different thing, which is that the rules must be the same in every country. It's not mutual recognition; it’s harmonization. And that is one of the things that we in Britain have begun to chafe against, and to say, well, hang on, this is ridiculous because it doesn't allow for experimentation. It doesn't allow for one country to do something better than the other countries, and they might then all copy it.
If everything's harmonized, nothing can change, and we gradually got to the point where we found that that wasn't acceptable to us. We asked for reform in this direction, reform to allow more local variation in the way things are done inside the European Union. We were not given any changes, any significant reforms, and so we voted to leave and rather revealingly, Guy Vorhofstadt, one of the senior members of the European Parliament, gave a speech at the Liberal Democrat conference in Britain last year railing against our decision to leave, in which he said, “You don't understand. We are an empire. You must join one empire or another.” We don't want to join an empire. We want to be a relatively small offshore island, trading with America, trading with China, trading with Europe, and doing our own thing.
MT: This could go in two different directions. One could be that people in America and people in Britain will recognize government failures and will push for greater deregulation and higher economic growth, or it could go in the other direction, which tends to happen more often, which is to say that government didn't have enough power, resources and taxes. How do you think this is going to play out in terms of science funding? Are we going to see people clamor for more government funding and intervention in scientific development, or are people going to recognize that actually the saving grace of the COVID pandemic was the private sector and therefore we should liberate the private sector to do what it does best?
MR: Well, Terence Keeley makes the point very strongly that, if you look at South Korea, it spends more of its GDP on research and development than Britain, but the vast majority of that spending is in the private sector. It spends much less in the public sector. As a result, its universities are not as strong, but its companies are stronger. And it turned to the private sector right at the start of this epidemic and said, “Please solve the testing problem for us,” and they did. And that's quite a strong argument for the idea that we probably are crowding out private-sector research in a country like Britain and to some extent the US by spending so much on public-sector research.
But I wouldn't want to throw out all public-sector research altogether, partly because it does some stuff that the private sector might not get around to doing, like astronomy, and partly because if the government is going to take 40% of our income, I'd rather spend some of that on research and development and not all of it on something less interesting if you see what I mean.
But this crisis is a problem for science because it is very clearly showing that science is not as reliable a way of prognosticating, forecasting the future as we thought. It's very bad at forecasting. No shame there. We're all very bad at forecasting. These are complex systems. They're very difficult to forecast. Modeling is not a good way of determining policy. Scientists are really good at understanding the world as it is and as it has been, but they're no good at telling you about the way the world's going to work. And this was made very clear in an article in Nature just yesterday, where somebody said, “This is why we need red teams. We need scientists disagreeing with each other so as to get at the truth through the conflict of their arguments.”
And this is actually a key point about science. What keeps science honest, what stops it from falling into the trap of confirmation bias, is the fact that it's very decentralized. And Professor A thinks that Professor B's ideas are rubbish and he says so, and as soon as you lose that, as soon as you say everybody must sign up to a consensus on, say, climate change, then you lose the honesty of science. So I think there is a crisis to be done there. As for your more general point about whether this crisis will lead to liberalization, I hope so, but I fear not. I fear the result of a crisis like this is nearly always to increase the power of the state and to increase the amount of tax it takes in trying to get us through a recession. And then very gradually to liberalize later.
MT: You and I, and many other people who think like us, will just have to keep on making these points about government failure about how the private sector stepped up and really delivered many of the things that the government could not. Very last question and it has to do with what you just said. It made me think about modeling and climate. A few years ago, Indur Goklany produced a very interesting paper about a set of assumptions that go into the modeling of one part of the environment. That then ties into another model, which is also based on a set of assumptions for another part of the environment. Then you put them all together and you come up with a model which shows warming of 2.5% or 4% or whatever. But at every stage of that process, more and more assumptions have been introduced into the model until it really becomes rather tenuous in its relationship to reality. What should a viewer take away from the modeling fiasco?
MR: Yeah, well I think you've seen in this current crisis and in the climate debate one big mistake, which we hear far too much about, which is to treat the output of a model as if it was evidence, as if it was data. The language often reflects this. I was reading a paper only this morning, which is actually about climate, but it was saying our models have produced this fascinating result that climate sensitivity is higher than we thought. Well, that's not a result. That depends on the assumptions you put in. That's a thought experiment. It's not a piece of data, but it's often treated as such.
And what we've seen with the COVID models is that if you don't get things like the heterogeneity of the infectivity right - in other words, that children don't pass the virus on very easily, but old people do very easily, and therefore the rate of spread is different in different populations - you get some very wrong results out of models. And the similar thing applies in the case of climate. There is a scenario for emissions called RCP 8.5, which has been used far more often than any other scenario by governments to determine the policies that they take in response to climate change. Almost every model they use uses RCP 8.5. Well, what are the assumptions? Roger Pielke Jr. has gone into this at length and keeps saying, “Stop, using this scenario.” It was designed as an extreme scenario with ludicrous assumptions in it that would never come about, but it would be interesting to see what might happen if we did this. So the assumption is that we would be burning ten times as much coal in 2100 as we are today, that we would be using coal for half of our energy instead of about 20% today globally, that we would be making motor fuel out of coal, that there would be twelve billion people on the planet, that innovation and trade would have dried up, great economic inefficiencies.
This is a barking mad scenario that's completely wrong already, and yet it is still being used to inform these models. And nobody knows this. You see a headline that says climate change may lead to such-and-such sea-level rise by such-and-such year, and you dig deep down and deep down in the small print, sure enough, they used RCP 8.5. So that's a very good example of garbage in, garbage out.
MT: So, we have to be aware of the limits of human knowledge and how much we still don't know about how the world functions…
MR: Yes, I mean the key distinction I make when people say, “Oh, so you're saying experts are useless?” is no, I'm saying experts are very good at building bridges and other devices. I rely on expertise all the time. What they're not good at is the future, and Philip Tetlock has shown this very clearly over the years, that people are very bad at forecasting the future, and experts are slightly worse than ordinary people at forecasting the future because they get too obsessed with their own area of expertise. So, we need to make this distinction between the present, which we’re good at using expertise in, and the future, where we cannot treat experts as gods. They do not deserve to be put on a pedestal.
MT: Matt, I'm really very grateful to you for joining me today. The book is How Innovation Works: And Why It Flourishes in Freedom. I've read it. I highly recommend it, and hopefully people will take away some lessons from it, including the vital link between innovation and freedom.
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