Opinion: Daily Journal

World’s foremost ‘rational optimist’ says innovation will help COVID-19 recovery

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It might make sense if recent events had convinced best-selling author Matt Ridley to shed the nickname tied to his most famous book. Yet the COVID-19 pandemic has not killed off Ridley’s status as the world’s leading “rational optimist.”

Now his latest book could help public and private actors make decisions that would boost recovery from the pandemic.

In the midst of the coronavirus crisis, how can Ridley remain optimistic about the future?

The Rational Optimist came out as a book in 2010,” Ridley said during an interview for the John Locke Foundation’s “HeadLocke” podcast. “Pretty well every year, somebody has put that question to me in one form or another. They’ve said, ‘Yeah, but the great financial crisis must have changed your mind.’ … Or the war in Syria. Or the war in Ukraine. Or the Ebola epidemic.”

“So there’s always been a reason for people to say ‘But surely now things are getting bad, even if they got better in the past,” he added.

Ridley admits COVID-19 is a “big one.” “This pandemic is going to cause a huge amount of pain — including the reaction to it, the locking down of the economy,” he said. “It will take a lot to get things back on track. But I certainly believe it’s possible, and I still think it’s likely that we will do so.”

The world will conquer medical problems created by COVID-19. Ridley expresses far more concern about another long-term impact. “Whether the world gets addicted to top-down, centralized, authoritarian ways of running countries, and whether it throws out global trade, … is a slightly more worrying question.”

We might be entering a period when “things go wrong more than they go right,” Ridley warns. “But I’m pretty sure that actually this will be a stimulus to innovation and new practices … new ways of doing business, new ways of starting businesses, new devices, new gadgets, new technologies.”

“Those will be what gives us even greater prosperity globally in the years ahead,” he predicts.

In a time of great need for innovation, Ridley’s new book promises to explain How Innovation Works.

“I write a lot about how innovation is this incredibly important secret sauce that makes the world a more prosperous place,” Ridley said in the “HeadLocke” chat.

Innovation distinguishes man from other animals. Why? “I’ve argued that it’s basically the habit of exchange and specialization — that once we got into the habit of saying I’m going to do one thing, you do something else, and we’ll swap when we’re finished, and we’ll both be better off because we’ll both get better at what we’re doing, and we’ll save time that way. … That’s the real secret of what makes humans different.”

Exchange and specialization are necessary but not sufficient for innovation. When the first exchanges took place 300,000 years ago, man didn’t leap immediately “to nuclear weapons and vaccines” and other modern-day inventions, Ridley explains.

“Each innovation unlocks the potential for the next innovation,” he said. “You can’t have flight until you have engines. You can’t have engines until you have metal.”

Innovation picked up steam in Great Britain around 1700. That started a major movement forward around the globe in the following centuries. But it has slowed in recent decades.

Government interference deserves some of the blame. “I think that is a very big part of it: government trying to pick winners and picking losers instead because losers are good at picking government even if government is not good at picking winners.”

When it’s not picking winners, government places too many restrictions on innovation. “Imagine if [Amazon’s] Jeff Bezos had been told in the 1990s, ‘Yes, you can start an online company, but — like a nuclear power plant — you must tell us exactly which software you’re going to use, how you’re going to fulfill orders, in 10 years’ time?’ He wouldn’t have been able to invent half the things that he did.”

Innovation requires a certain type of response from government. “As far as the entrepreneur is concerned, the problem is not so much that the government says no, but that the government takes an age to say yes,” Ridley said. “If you take medical devices, the average time to approval is something like six years in Europe and something like three years in the U.S. That’s too long for an innovator to wait. He runs out of money in that time. So he doesn’t start.”

“We deter innovators from coming forward with ideas because of the absolute lack of urgency in government,” he added. Stifling patent rules also play a role. Entrenched special interests push regulations that thwart innovation. Critics armed with the “precautionary principle” argue about potential dangers linked to new ways of doing things.

At a time when the world should focus more attention on innovation, the pandemic is preventing RIdley from traveling to promote his new book. “But I do think it rams home my message that we need more innovation, not less.”

More innovation will require more freedom from counterproductive government intervention.

Mitch Kokai is senior political analyst for the John Locke Foundation.