Q&A with Matt Ridley on Economics, Ecology, and Rational Optimism

As part of PERC’s recent Lone Mountain Forum, “Reconciling Economics and Ecology: The Foundation of Environmental Optimism,” PERC board member Gerry Ohrstrom sat down with science writer Matt Ridley to discuss what these two disciplines might learn from one another. Watch a short video of the interview above, read the full interview below (lightly edited for clarity), or listen to the podcast [approx. 7 mins]. For more PERC Q&As, visit the series archive.

Q: Ecology is about preserving resources while economics is about exploiting them. How does one reconcile these two disciplines?

A: In a way, I think they are both about emergent properties. Ecology is about the spontaneous order that appears in the world through the interaction of different species — the pattern that you see. And economics is about the same thing in society. So they are both bottom-up fields for me. They’re both about how order emerges from the interaction of individuals.

Q: Are you suggesting economics could learn something from Charles Darwin and ecology could learn something from Adam Smith?

A: This is one of my crusades, actually. As someone who was an ecologist and nowadays writes a lot about economics, I am fascinated by the parallels. Charles Darwin read Adam Smith, so there is sort of an ancestral connection between the two fields. And there is a lot going on in evolutionary biology and ecology that is very parallel to what is occurring in economics and vice versa. People like F.A. Hayek knew this and went across to evolution to pinch ideas, so I think there is a very fruitful dialogue between ecology and economics.

Q: You are the author most recently of a book, The Rational Optimist: How Prosperity Evolved. If prosperity continues to evolve aren’t we ultimately going to run out of resources?

A: I don’t think so because I think that the amount of resources we have depends upon our ingenuity. In other words, the more prosperous we get, the more frugal we get in our use of resources. Land is a good example: We use less and less land to produce the same amount of food because we’re getting better at it. We’re applying fertilizer or irrigation or whatever it is. The same is true for the amount of steel in a bridge; it is a lot lower than it was 20 years ago, etc.

So actually we are shrinking the amount of resources we need to run society at the same time that we are growing them, because there are more of us and we’re becoming more prosperous. I actually think the richer we get in this century, the more comfortable the resource position is going to be because we’re going to be better at recycling, better at finding resources, and better at using them frugally.

Q: That is somewhat counterintuitive. The more we use, the more we’re going to have, the more frugal we’re going to be, and the wealthier we are going to be.

A: Until now, the problem has been called the Jevons Paradox, which says that the cheaper you make energy, the more people will use it. And that’s true with a lot of resources. But there is evidence that the Jevons Paradox is reaching its limits with some resources. Land is a good example, again. We are actually reforesting land all over the world, we’re taking land out of farming all over the world, because even though there are more of us every year, and even though more of us want to eat chickens and pigs and all these land intensive forms of food, we still, even with this profligacy, can’t keep up with our increasing efficiency, our productivity. So actually we taking land out of agriculture and turning it back to nature reserves. And as the population growth rate falls in this century, I think that process will accelerate.

Q: So what would your response be to those who argue that we should literally go “back to nature,” back to pre-industrial times?

A: I think if seven billion people tried to go back to nature it would be a catastrophe for nature. A hunter-gatherer basically needs a thousand hectares to support himself and even at that level he can extinguish species. We know that there was a problem with hunter-gatherers wiping out species in the past. So imagine if each of us needed a thousand hectares—it can’t be found. There wouldn’t be room for any places that were off limits. So I’m afraid we would have a much larger impact on nature if we tried to live lower-tech lives than if we try to live high-tech lives.

Q: So you have this optimistic view on the future of not only human well-being, but of nature and the environment itself. What might stand in the way that could possibly derail that view?

A: There are things that could go wrong. The birth rate could start going back up in some countries and the general greed with which we want to increase our use rate. For example, if we all want to have private jets maybe there is a problem. But, in a way, I think the biggest threat comes from politics – from people saying, “No, we must not use a technological advancement like genetically modified food,” or, “No, we mustn’t allow prosperity to increase because that’s bad for nature.” And, “We mustn’t use fossil fuels; we must go back to using biofuels, wood, and crops.” Well, that’s a disaster. That’s taking land that could be producing natural habitat and putting it to human use again. Most of what environmentalists are demanding in the environmental movement would actually increase the human footprint, not decrease it, because they want biofuels, renewable energy, and organic food. These are things that take up more and more land. And I think that’s a pity. I think we should be trying to take up less and less land.

Q: And so we have come full circle. What stands in the way of your optimism would be top-down politics and the wrong kind of activism. If we leave people and nature to its own bottom-up devices as Darwin has shown us in ecology, we can do it through economics as well.

A: I think that is absolutely right. There is far too much top-down thinking in the world, trying to ordain the solution rather than let the solution emerge.  

Shawn Regan is the Director of Publications and a Research Fellow at PERC. He holds a M.S. in Applied Economics from Montana State University and degrees in economics and environmental science from Berry College. His work has appeared in the Wall Street Journal, Quartz, High Country News, Reason, Regulation, Grist, and Distinctly Montana. Shawn...
Read More > More Articles by Shawn Regan >
Brennan Jorgensen wears many hats at PERC. When she isn’t filming or editing PERC Video Productions, she assists in research, outreach, and development projects. She is originally from Oregon and has a degree in Religion from Whitman College in Walla Walla, WA. After graduating she attended pastry school in France. Before coming to PERC she...
Read More > More Articles by Brennan Jorgensen >