The Rational Optimist (14 page)

Nor can there be any doubt that the collective brain enriches culture and stimulates the spirit. The intelligentsia generally looks down on commerce as irredeemably philistine, conventional and lowering in its taste. But for anybody who thinks great art and great philosophy have nothing to do with commerce, let him visit Athens and Baghdad to ask how Aristotle and al-Khwarizmi had the leisure time to philosophise. Let him visit Florence, Pisa and Venice and inquire into how Michelangelo, Galileo and Vivaldi were paid. Let him go to Amsterdam and London and ask what funded Spinoza, Rembrandt, Newton and Darwin. Where commerce thrives, creativity and compassion both flourish.

Rules and tools

Even if the world is indeed becoming a more trusting and less violent place as it becomes more commercial, that does not mean that commerce is in itself either the only way to make the world trusting, or enough on its own to create trust. As well as new tools, there had to be new rules. The innovations that made the world nicer, it may be argued, are institutions, not technologies: things like the golden rule, the rule of law, respect for private property, democratic government, impartial courts, credit, consumer regulation, the welfare state, a free press, religious teaching of morality, copyright, the custom that you do not spit at the table and the convention that you always drive on the right (or left if in Japan, Britain, India, Australia and much of Africa). These rules made trustful, safe commerce possible, at least as much as vice versa.

The aborigines of Australia or the Khoisan of southern Africa lacked not only steel and steam when they first met Westerners; they also lacked courts and Christmas. Certainly, the imposition of a new rule has often enabled a society to capture the benefits of exchange and specialisation ahead of its rivals, and to better the lives of its citizens in moral as well as material ways. Looking around the world, there are plainly societies which manage their citizens’ lives well with good rules and societies which manage their citizens’ lives badly with bad rules. Good rules reward exchange and specialisation; bad rules reward confiscation and politicking. South and North Korea spring to mind. One is generally a fair and free place, where people are mostly becoming more rich and happy; the other an arbitrary, hungry and cruel place whence people are fleeing as desperate refugees whenever they can. The difference – which results in fifteen times as much prosperity per head for the South – is plainly in the way they are ruled, in their institutions. Later in this book I will argue that the wrong kind of government can be a disastrous long-term impoverishing factor – the Ming empire is my prime example. Zimbabwe today needs better rules before it can have better markets. But note here that a country’s economic freedom predicts its prosperity better than its mineral wealth, education system or infrastructure do. In a sample of 127 countries, the sixty-three with the higher economic freedom had more than four times the income per capita and nearly twice the growth rate of the countries that did not.

A few years ago the World Bank published a study of ‘intangible wealth’ – trying to measure the value of education, the rule of law and other such nebulous things. It simply added up the natural capital (resources, land) and produced capital (tools, property) and measured what was left over to explain each country’s per capita income. It concluded that Americans can draw upon more than ten times as much intangible capital as Mexicans, which explains why a Mexican who crosses the border can quadruple his productivity almost immediately. He has access to smoother institutions, clearer rules, better-educated customers, simpler forms – that sort of thing. ‘Rich countries,’ concluded the Bank, ‘are largely rich because of the skills of their populations and the quality of the institutions supporting economic activity.’ In some countries, intangible capital may be minute or even negative. Nigeria, for example, scores so low on the rule of law, education and the probity of its public institutions that even its immense oil reserves have failed to enrich it.

So perhaps I am wrong to seek the flywheel of human progress in the gradual development of exchange and specialisation. Perhaps they are symptoms, not causes, and it was the invention of institutions and rules that then made exchange possible. The rule against revenge killing, for example, must have greatly helped society to settle down. It must have been quite a breakthrough to say that ‘do unto others’ applies only to charity, not to homicide, and that handing the matter of revenge over to the state to pursue on your behalf through due process would be of general benefit to all. Both
Orestes
and
Romeo and Juliet
(and
The Godfather
and
Dirty Harry
, for that matter) capture societies in the act of wrestling with the issue: all can agree that the rule of law is better than the rule of reciprocal revenge, though it makes less good theatre, but not all can overcome their instincts and customs to achieve it.

True enough, but I see these rules and institutions as evolutionary phenomena, too, emerging bottom-up in society rather than being imposed top-down by fortuitously Solomonic rulers. They come through the filter of cultural selection just as surely as do technologies. And if you look at the history of, for instance, merchant law, you find exactly this: merchants make it up as they go along, turning their innovations into customs, ostracising those who break the informal rules and only later do monarchs subsume the rules within the laws of the land. That is the story of the
lex mercatoria
of the medieval period: the great law-giving kings of England, such as Henry II and John, were mostly codifying what their trading subjects had already agreed among themselves when trading with strangers in Bruges, Brabant and Visby. Indeed, it is the whole point of common law. When Michael Shermer and three friends started a bicycle race across America in the 1980s, they began with virtually no rules. Only with experience did they have to bring in rules about how to deal with being arrested for causing a traffic jam on a hill in Arizona and other such unexpected complications.

So while it is true that institutional innovators in the public sphere are just as vital as technological innovators in the private, I suspect that specialisation is the key to both. Just as becoming a specialist axe maker for the whole tribe gives you the time, the capital and the market to develop a new and better form of axe, so becoming the specialist bicycle racer enables you to make up rules about bicycle racing. Human history is driven by a co-evolution of rules and tools. The increasing specialisation of the human species, and the enlarging habit of exchange, are the root cause of innovation in both.

Whoever could make two ears of corn, or two blades of grass, to grow upon a spot of ground where only one grew before, would deserve better of mankind, and do more essential service to his country, than the whole race of politicians put together.

J
ONATHAN
S
WIFT
Gulliver’s Travels

Oetzi, the mummified ‘iceman’ found high in the Alps in 1991, was carrying as much equipment on him as the hikers who found him. He had tools made of copper, flint, bone and six kinds of wood: ash, viburnum, lime, dogwood, yew and birch. He wore clothes made of woven grass, tree bark, sinew and four kinds of leather: bearskin, deer hide, goat hide and calf skin. He carried two species of fungus, one as medicine, another as part of a tinder kit that included a dozen plants and pyrite for making sparks. He was a walking encyclopedia of accumulated knowledge – knowledge of how to fashion tools and clothes and from what materials to make them. He carried the inventions of scores, perhaps thousands, of people upon him, their insights manifest in his kit. If he had had to invent from scratch all his equipment he would have had to be a genius. But even knowing what to make and how to make it, if Oetzi had spent his days collecting all the raw materials he needed for just his food and his clothing (let alone his shelter or his tools), he would have been stretched to breaking point, let alone if he then had to smelt, tan, weave, sew, shape and sharpen everything. He was undoubtedly consuming the labour of many other people, and giving his own in exchange.

He was also consuming the specialised labour of other species. Oetzi lived about 5,300 years ago in an Alpine valley. This was 2,000 years after agriculture reached southern Europe. Compared with his hunter-gatherer ancestors, Oetzi had cattle and goats that spent all day working for him gathering grass and turning it into leather and meat; wheat plants that gathered sunlight and turned it into grain. Under human genetic tutelage these species had grown specialised in doing so at the expense of their other biological imperatives. That is the point of agriculture: it diverts the labour of other species to providing services for human beings. The biologist Lee Silver was once watching chickens coming ‘home to roost’ in a village in south-east Asia and it struck him that they were like the farmer’s tools: they had been gathering food for him in the forest all day. Farming is the extension of specialisation and exchange to include other species.

Oetzi was also the beneficiary of capital investment. He lived right at the beginning of the metal age, when copper was first being smelted. His pristine copper axe, 99.7 per cent pure, had been smelted in a furnace that had consumed a lot of somebody’s capital to build. The chaff in his clothing came from a grain crop grown with invested capital in the form of stored seeds and stored labour. For Adam Smith capital is ‘as it were, a certain quantity of labour stocked and stored up to be employed, if necessary, upon some other occasion’.

If you can store the labour of others for future use, then you can spare yourself the time and the energy of working for your own immediate needs, which means you can invest in something new that will bring even greater reward. Once capital had arrived on the scene, innovation could accelerate, because time and property could be invested in projects that initially generated no benefit. Few hunter-gatherers, for example, could ever afford the time off ‘work’ to build a furnace and slowly and laboriously smelt enough metal to make a copper axe: they would starve in the meantime – even if they could find a market for the axes.

In the conventional account it was agriculture that made capital possible by generating stored surpluses and stored surpluses could be used in trade. Before farming, nobody could hoard a surplus. There is some truth in this, but to some degree it gets the story the wrong way round. Agriculture was possible because of trade. Trade provided the incentive to specialise in farmed goods and to generate surplus food.

Agriculture started to appear independently in the Near East, the Andes, Mexico, China, the highlands of New Guinea, the Brazilian rainforest and the African Sahel – all within a few thousand years. Something made it inevitable, almost compulsory around this time: however much it eventually resulted in misery, disease and despotism in the long run, it clearly gave its first practitioners competitive advantage. Yet farming was not an overnight transition. It was the culmination of a long, slow intensification of human diet that took tens of thousands of years. In search of extra calories people gradually ‘moved down the trophic pyramid’ – i.e., became more vegetarian. By 23,000 years ago the people of what is now Israel and Syria had become dependent on acorns, pulses and even grass seeds, as well as fish and birds, garnished with the occasional gazelle – perhaps supplied by other hunting tribes through trade. At one remarkable site, Ohalo II, now submerged except in dry years by Lake Kinneret (the Sea of Galilee), direct evidence has emerged of the eating of wild grains long before farming. In the remains of one of six brushwood huts, there is a flat stone apparently used for grinding seeds, and on it, preserved for 23,000 years by lake sediments, are microscopic starch grains from wild barley seeds. Nearby is what appears to be a stone oven for baking. By grinding grain to flour and baking it, the users would have nearly doubled the energy they could get from it.

So bread is far older than farming. It would be an astonishing 12,000 years after Ohalo II before anybody started planting and reaping cereals such as rye, wheat and barley, and 4,000 years after that before modern, genetically hexaploid wheat, with its heavy, free-threshing seeds, was invented – and began its long career as humankind’s biggest and most widespread source of calories. The inescapable conclusion is that the people of the Near East were no fools. They captured the benefits of cereals – milled and baked starch – long before they took on the hard graft of farming them. Why spend months tending your own field of corn, when you can spend hours harvesting a wild one? One study notes an ‘extreme reluctance to shift to domestic foods’.

By 13,000 years ago the people of the Near East, known now as the Natufian culture, were using stone sickle blades to harvest the heads of the grasses, rather than beating the seeds into baskets. They lived in settlements that were sufficiently stable to be plagued by house mice. They were as close to farming as you can get without genetic domestication of crops. Yet, at this moment, on the brink of making history, they regressed. They abandoned their settlements, returned to nomadism and broadened their diet again. The same happened in Egypt about the same time – a retreat from grinding grain to hunting and fishing (except in Egypt’s case it was much longer before the proto-farming experiment resumed). The probable cause of this hiatus was a cold snap, over a thousand years long, known as the ‘Younger Dryas’. The probable cause of the cold snap was the North Atlantic suddenly cooling either from the bursting of a series of vast ice dams on the North American continent, or from the sudden outflow of water from the Arctic ocean. Once the cold snap had begun, not only was it colder and drier, but the weather fluctuated wildly from year to year, with changes of up to seven degrees in a single decade. Unable to rely on local rainfall, or local summer ripening, the people could not sustain their intensive cereal-feeding lifestyle. They must have starved in great numbers, and the survivors took to nomadic hunter-gathering again.

Then, around 11,500 years ago the temperature of the Greenland ice cap shot up by ten degrees (centigrade) in half a century; throughout the world conditions became dramatically warmer, wetter and more predictable. In the Levant intensification of cereal use could resume, the Natufians could return to settled homes and soon something prompted some body to start deliberately saving seed to plant. Chickpeas may have been the first crop, then rye and einkorn wheat, though figs had probably been cultivated and dogs domesticated some millennia before. Can there be any doubt that it was woman, the diligent gatherer, rather than man, the dilettante hunter, who first had the idea of sowing grain? A well planted crop, sown into riverbank mud or some other bare land, then carefully weeded and guarded from birds, would have meant new and harder work, but would have brought rewards in yield to the family of the woman who tried it. It would have brought a surplus of flour that could be exchanged with hunters for meat, so it would have kept not only the field’s owner and her children alive, but perhaps a couple of other hunting families too. The exchange of grain for meat effectively subsidised hunting, or raised the ‘price’ of meat, putting more pressure on the hares and gazelles and so gradually making the entire settlement more dependent on the farm – and bringing a new incentive to the first man who thought of raising an orphaned goat kid rather than eating it. Farming would have become a necessity for all the people living there, and the hunter-gatherer way of life would have gradually atrophied. It was undoubtedly a long and slow process: farmers supplemented their diet with hunted ‘bushmeat’ for many millennia after they first started cultivating the land. In most of North America, the natives combined crops with seasonal hunts. In parts of Africa, many still do.

The Fertile Crescent was probably the place where agriculture first took hold, and from there the habit gradually spread south to Egypt, west into Asia Minor and east to India, but farming was quickly invented in at least six other places in a short time, driven by the same ratchet of trade, population growth, stable climate and increasingly vegetarian intensification. Squashes and then peanuts were cultivated in Peru by 9,200 years ago, millet and rice in China by 8,400 years ago, maize in Mexico by 7,300 years ago, taro and bananas in New Guinea by 6,900 years ago, sunflowers in North America by 6,000 years ago, and sorghum in Africa by around the same time. This phenomenal coincidence, as bizarre as finding that an aborigine, an Inuit, a Polynesian and a Scotsman all invented steam engines in the same decade of the eighteenth century without contact of any kind, is explained by the stabilising climate after the ice age ended. In the words of a recent paper, ‘agriculture was impossible during the last glacial, but compulsory in the Holocene’. It is no accident that modern Australia, with its unpredictable years of drought followed by years of wet, still looks a bit like that volatile glacial world. Australians were probably quite capable of farming: they knew how to grind grass seeds, burn the bush to improve kangaroo grazing and encourage favoured plants; and they certainly knew how to alter the flow of rivers to encourage and harvest eels. But they also knew, or found out the hard way, that farming does not work in a highly volatile climate.

No farming without trade

One of the intriguing things about the first farming settlements is that they also seem to be trading towns. From 14,000 years ago, much-valued obsidian (volcanic glass) from the Cappadocian volcanoes in Anatolia was being transported south along the upper Euphrates, through the Damascus basin and down the Jordan Valley. Seashells from the Red Sea were going the other way. This is precisely where the first farming settlements are – at Catalhoyuk, Abu Hureyra and Jericho. Such settlements were sited in oases where springs of fresh water from the mountains spilled out on to the western edge of the desert: places where soil nutrients, moisture and sunshine came together nicely – and also places where people mixed with their neighbours because of trade. This is surprising only because it is easy to think of early farmers as sedentary, self-sufficient folk. But they were exchanging harder in this region than anywhere else, and it is a reasonable guess that one of the pressures to invent agriculture was to feed and profit from wealthy traders – to generate a surplus that could be exchanged for obsidian, shells or other more perishable goods. Trade came first.

In the 1960s, Jane Jacobs suggested in her book
The Economy of Cities
that agriculture was invented to feed the first cities, rather than cities being made possible by the invention of agriculture. This goes too far, and archaeologists have discredited the idea of urban centres preceding the first farms. The largest permanent settlements of hunter-gatherers cannot be described as urban even among the fishermen of the Pacific coast of North America. None the less, there was a germ of truth in her idea: the first farmers were already enthusiastic traders breaking free of subsistence through exchange, and farming was just another expression of trade.

In Greece, farmers arrived suddenly and dramatically around 9,000 years ago. Stone tools suggest that they were colonists from Anatolia or the Levant who probably came by boat deliberately seeking to colonise new land. Moreover, these very earliest Greek farmers were also apparently enthusiastic traders with each other and were very far from being self-sufficient: they relied upon specialist craftsmen to produce obsidian tools from raw material imported from elsewhere. This is once again not what conventional wisdom envisages. Trade comes first, not last. Farming works precisely because it is embedded in trading networks.