I like Matt Ridley’s analysis of prosperity. You can look up his videos or buy his books, and should do this whenever you feel you need a boost from the pessimism that may be pulling down around you. I have friends and even a few relatives who are pessimists. I don’t go out of my way to seek them out, but if they need me or want to talk to me, they know they can find me and I’m available to lend an ear in any situation.
Entrepreneurs, as I have pointed out in the past, are optimists. Depending on the “shade” of optimism they have, they could become successful or not. Happy-go-lucky optimism not guided by rationality will lead you to ruin. A healthy dose of skepticism guided by reason can build your optimism to the point where it becomes rational. Rational optimism, of the kind Matt Ridley encourages, is what I think keeps entrepreneurs focused long enough on how to validate their idea, discover their customer personas, and forge their partnerships to see them through to a successful future.
Why does Ridley call himself a rational optimist, and invites all of us to analyze the world around us and hopefully reach the same conclusion? Because we collectively have become more prosperous than our parents, and they have become more prosperous than our grandparents. This level of prosperity has increased continuously and there is little reason to believe that it will stop.
How come, you may ask yourself? You probably know people whose families had money, and lost it a generation later. The cases abound. You may be involved in such a situation yourself. As far as you know, prosperity has declined for them in their lifetime. But it all depends on how you measure it. Prosperity, as Matt explains, is not measured in money. It is measured in the time it takes to fulfill a need.
As societies have emerged and grown, human exchange has earned us a collective brain that has driven technology that has undoubtedly made us more prosperous. According to some of the statistics he uses, in 1800, an average person would need to work some 6 hours to be able to afford to purchase one hour’s worth of reading light from a candle. By 1880, the wages from 15 minutes could buy you that same hour of reading light, because by then the average person in the developed world had access to the technological breakthrough of the kerosene lamp. It took your grandparents 8 seconds worth of work to buy that same hour in 1950, and in 1997 it took you or your parents one half second of the average wage to earn that same amount of reading time.
I remember, as a kid, a time when making a long distance call to relatives in another state meant I along with my brother and sisters would huddle around a corded phone with my parents – trying to all place our ears together towards the earpiece – with a mechanical clock on the side table to not go over the 3 minutes on the conversation and blow up the phone bill. This would happen once or twice a year. Today, the cost to fulfill the need to stay connected with our loved ones living far away is marginally free.
I remember a time when air travel was available only to the well off or to business executives, and the majority of the population would save money for months or years to afford a plane trip. Today, people fly on a whim to go watch their favorite college or professional team play a game out of town.
I could go on with a thousand examples, but there is no need for that. Just talk to someone who could be your grandparent, and ask them about the past, and you will undoubtedly reach the conclusion that mobility, access, leisure and the opportunity to live more productive and healthy lives has become more affordable for more and more people. I agree that not everyone is there yet, but if you look closely, chances are that on average the journey has trended towards more prosperity for more and more people through the years.
What is driving it? Entrepreneurs, who envision and then create a future where the needs of life are taken care of with less toil, giving way to a continuous cycle of re-envisioning, ingenious creativity, and ever increasing prosperity.