How global progress could be halted

 
Allister Heath
WHENEVER I get too depressed about the state of the world, I turn to a website called rationaloptimist.com. Its author, Matt Ridley, is the scourge of the neo-Malthusian, doom and gloom pessimists – from the left and the right – who see catastrophes, famines and collapse around every corner. Ridley’s worldview, which draws on his research in economics and evolutionary psychology, is much more upbeat: based on the evidence of the past few decades, he argues that this coming century is likely to see “mild climate change, cheap and abundant resources, falling population, ample food, more wilderness, and the average person becoming gradually - though erratically - wealthier, healthier, happier, cleverer, cleaner, freer, kinder, more peaceful and more equal.” Cassandras of the world, drop dead.

I agree with Ridley that progress has been astonishing ever since the West stumbled upon capitalism and liberalism. Those who keep emphasising the negatives have been proved ridiculously wrong over the past 200 years. The world is richer, healthier and more prosperous than ever before. Asia and Latin America have continued to boom, pulling tens of millions more out of poverty. Even Africa is looking better. Under the right economic institutions, it makes sense to be hugely optimistic about the prospects for humanity. There is a pretty high chance that Ridley’s predictions turn out to be right.

The problem is the short-term. Blips can and do happen, and policy blunders can set the world back years. Big enough errors could even destroy our civilisation. The first world war ended the first golden era of globalisation and of course was a devastating human disaster.

Things can go very badly wrong economically, as they did during the Great Depression and the recent credit crisis. Not all events are like Y2K, the supposed IT disaster which was meant to take out the world on New Year’s Day 2000 but which turned out to be a damp squib. Genuine Black Swan events do exist – and there are also lots of far more predictable ticking time bombs that could either invalidate Ridleys’ forecast or at least waste decades of progress.

My biggest worries include the spiraling stock of government debt; the fact that financial institutions have either chosen or have been ordered to hold more and more of it; and the fact that such leverage binges have always ended in tears and hyper-inflation in the past. The Eurozone is doomed; its eventual implosion will be messy and could trigger various 1930s-style scenarios under which extremists seize control in some bankrupt states. The reason for our wealth, prosperity and astonishing level of scientific advancement is that the world has turned its back on protectionism and embraced globalisation.

Fortunately and surprisingly, there was no return to autarchy, narrow nationalism or protectionism during the financial crisis. But there are worrying signs that bad habits are creeping back in. Yesterday, Labour and the coalition both tried to outdo themselves in the protectionist stakes after job losses at Bombardier. Last but not least, the threat of terrorism remains as large as ever; a major attack could destroy liberalism and trust. If we are sensible, human civilisation will keep on reaching new heights. I am hopeful – but far from certain we won’t mess it up.

allister.heath@cityam.com
Follow me on Twitter: @allisterheath