Ep 133: Matt Ridley on the Fight to Save the UK & How Extraordinary Ideas Evolve

0:00You've got to allow the free exchange of ideas among ordinary people and ordinary entrepreneurs. individuals can make a difference. But I think if Steve Jobs hadn't existed, there would still have been a hero of the personal computer. Edison had like 20 competitors for the light bulb. You know, this has changed my view of the world a lot for investing. It's really important, I think, to realize how many of these spontaneous orders there are in the world. I'll tell you something scary. A few of my friends are worried about the AI learning their own language that we can't understand. We underestimate the evolution of everything.

0:30I'm 67 years old. I've never felt as pessimistic about my own country as I do now, its biggest innovation of the last few years is the non-detachable bottle top. Meanwhile, in America, Elon Musk is landing rockets on gantries. That's the sort of contrast we need to show people.

0:55Matt Ridley is one of my favorite authors, also a former member of the House of Lords. He's a British aristocrat who thinks in really fascinating ways about the the world. You can find him online at the Rational Optimist Society. He's written lots of books that have sold millions of copies. Matt's one of the most interesting thinkers of our time. He's also a rare voice of courage in the UK, fighting for free speech, for practical principles, for good energy policy, for common sense, frankly, to bring back the greatness of British society. Matt's working on a new book now, and you'll get a sneak preview of what he's up to here in the US.

1:25Welcome to the American Optimist. I'm really excited today to have one of my very favorite authors here in person. Matt Ridley, thank you for joining us. Joe, it's an honor and a pleasure to be with you. And you're one of my favorite entrepreneurs. Oh, that's very kind of you. You also happen to be a Viscount. You were in the House of Lords for a while. You're a weekly columnist, I believe, for The Telegraph and The Times and Economist, Wall Street Journal you've written for. You're up to a lot. Yeah. Writing weekly newspaper columns is probably the nearest I've had to a day job in the last few years, that and writing books.

1:53I enjoy writing. And it's an excuse to eavesdrop on what's going on in the world and ask people like you what's happening and then write about it. Your books have sold millions of copies. We always look forward to them. We're going to talk about, I'm going to ask you about a bunch of them, but I want to talk about the UK a little bit first because I'm a longtime Anglophile. I deeply care about Western civilization and I see England as a place where liberty was born in many ways for the entire West. And I'm really nervous and sad about what's going on as I watch it from Texas right now. You know, there's the grooming gangs, there's anti-Semitism, there's these migrants coming in that are not assimilating, and there's arresting people.

2:29I think they have by far the most people arrested door to door for their posts online, for their tweets. More than China. More than China. Is the situation as dire as it seems? What's going on? Well, yes, I think it is. I'm 67 years old. I've never felt as pessimistic about my own country as I do now. And it shouldn't be that way because up until a relatively short time ago, I was pretty optimistic about the UK. We've got the English language, the rule of law, one of the great financial centers of the world, the tradition of open free trade with the world, et cetera. We should be absolutely roaring ahead as a country with, as you say, a fantastic past, but also a great recent past.

3:12We were a free market nation until a few years ago and a home of rational thought and cultural openness. But it's gone wrong quite quickly and quite badly, in my view. It's not irrecoverable. Britain can still come back, but it is in a real mess at the moment. And the cultural stuff is, you know, that's bad enough. But it's against a background where we are stagnant as an economy. We've not grown in GDP per capita terms significantly in 15 years now. That's really dangerous because that results in falling behind. When you get a zero-sum world, as Peter Trill always told me, then everyone starts to fight each other for what's left of the pie, as opposed to if you're growing it, people are focused on growing.

3:58For me, the culture and the lack of growth and the current crisis, they all fit together. They're all part of the same thing. And I'm curious how you see this. If I was raising children in Britain and I was British, I'd want my children to be proud to be British. and if you're christian proud to be christian and proud of your culture and it seems like there's just none of that pride at all it seems like the opposite seems like everyone's turned pessimistic and i feel like the pessimism has actually led to some of the problems like how do you see that i think to some extent you're right uh and uh but but i do also think that it's fundamental economic mistakes that we're making uh that are at the root of our problems i almost see it going the other way that if we got the economics right we could people be more positive more positive about the culture.

4:39And by that, I mean, you know, the highest industrial electricity prices in the developed world, bar none, second highest domestic electricity prices, second to Germany. You know, this is a crazy way to run a modern economy because energy prices are absolute lifeblood of the thermodynamic system that is growth and prosperity. Everything requires energy. I hear you turned off the North Sea where you had all this really affordable oil. There's a lot of rumors that Russia was involved in lobbying for your green lobby to get you to turn things off in Europe and in UK in particular, because it's in their interest.

5:15Is there any truth to that? Are there bad guys involved in this? Well, certainly the anti-fracking campaigns in Europe, anti-shale gas campaigns, did, according to the Secretary General of NATO, did have significant Russian input to them. And you don't have to look very far for confirmation of that, because Vladimir Putin once went on a rant at a press conference about how terrible shale gas was. He does not like the fact that Texas and America are energy independent. Exactly, exactly. And, you know, I banged the drum for shale gas for about 15 years, I mean, for the last 15 years, because I could see what was happening in Texas, in North Dakota, in Colorado, and all these other places.

5:56A really remarkable turnaround, making the country energy self-sufficient and so on. But it's not, you know, Norway has drilled something like 40 new gas and oil wells just in the past 12 months, I think. Britain has drilled zero. But it's the same field. You know, I mean, those gas and oil fields are right on the border between the Norwegian sector and England sector. You're just giving it away to them for free. Exactly. We're buying it back from them at great expense. Our energy policy is the thing that makes me angriest. But it goes with an overspending, overborrowing, overregulation, overbureaucratization of our economy that is really, really damaging.

6:35And when you add that, as you say, to the cultural problem, the fact that we are allowing in enormous numbers of migrants, many legal, many illegal, that is causing real resentment, real problems with, as you say, anti-Semitism, Islamist extremism. organizations like the Muslim Brotherhood, which are banned in the Gulf. I have friends in the UAE, we were talking with your colleague about the UAE, who say they don't want to send their children to London because they're afraid they'll become radicalized. This is actually the situation right now, which is more sane how they run things there. But I don't want to go too far down this road because I do think that the ordinary average Brit, who I know, has not changed.

7:17He's still proud of his country. He's still, his or her country, I should say, still proud of what has been achieved and can be achieved in the future. It's rescuable. We have to hold on to get rid of this terrible Keir Starmer government, which is really, I mean, they're both incompetent and quite nasty, I think, which is a very unpleasant combination. And then I think there's a chance that we could come back as a country. We did Brexit. Many people think that was a mistake. I don't. I think it was the right thing to do, but we didn't take advantage of it. We didn't say, now we're out in the world, let's deregulate, let's get rid of GDPR and all that, the business you have to click on.

7:56I agree before you - No, all the European regulation, they're not starting tech companies anymore that are big because they make it too hard. Well, Mario Draghi wrote a report for the European Union saying, where are the tech companies in Europe? The joke is that Europe has its biggest innovation of the last few years is the non-detachable bottle cop. Whereas, and if you put it - These are dangerous. These are dangerous. Well, the plastic might get in the ocean or something. If you choke, we're in Texas, you can't sue me. But meanwhile, in America, Elon Musk is landing rockets on gantries. You know, that's the sort of contrast we need to show people.

8:41And Mississippi, I think, is our poorest state right nearby. and you think of Mississippi and you don't think of wealthy people, and it's wealthier now than the UK, obviously. Yeah, and that's a big change. I mean, 15 years ago, in the run-up to the great financial crisis 2008, Britain's GDP per capita was converging on America. It wasn't there yet, but it was getting quite close. Now we're way behind America because of stagnation and American incomes are roaring ahead. You know, it's not a competition. We don't want to race you, but we just want to have the fruits. think what you can do for social justice, for the environment, for whatever it is you're worried about.

9:17If you have the wealth to do it. Are there promising, on the UK a little bit, just a little more, are there promising UK leaders? Are there people who can pull us out of this? Are there bold people who are strong enough to do it? I think there are. I mean, I think Kemi Badenoch, who's the leader of the Conservative Party, is actually a good person. And she's got the message and the team she's got around her. Interestingly, some of them were saying idiotic things about things like energy when they were in government, are now saying very sensible things. And I say to them. How come you've changed your mind?

9:43He said, well, the civil servants never showed us your memos. I was saying I was sending you letters saying this stuff. You never saw it. I never saw it. But she's a long way behind in the polls. The Reform Party, which is leading in the polls, is economic populists. They're pretty left-wing on some economic issues. And they're riding high on an anti-immigration thing. But I think a change is coming. I just don't quite know how and when it'll come. I have a lot of sympathy for a lot of the people who have trouble with Tories after, you know, their 13-year rule. I mean, for example, Brexit, we can argue about that.

10:19I agree you had to get out of Europe, but you didn't get out of Europe's human rights courts, by the way. And it sounds, oh, good as human rights, but that's the stuff that's screwing your immigration. Like, what were they thinking not to get out of all the European courts? The European Convention on Human Rights is what enables our judges to say that a man who has committed terrible crimes in the UK can't be returned to another country because the fact that he's committed terrible crimes in the UK will be held against him in that other country when he goes back there. It's insane. In other words, we're giving him an incentive to commit terrible crimes in the UK because that stops him being deported.

10:55But why did the Tories, when they did Brexit, not fix that? That seems insane. They never quite had the courage of their convictions. That's the thing. There was lack of courage. A few of us in Parliament were banging on the door and you know boris johnson good guy uh wonderful first wife who would have made a brilliant kept him made him made him into a great prime minister yeah not so good with his second wife yeah she she was the wrong influence okay i might get into trouble for saying that because you know they're friends but still it is what it is they didn't have the courage and well you've definitely shown a lot of courage you're on a tour across the u.s let's talk about this uh you know where are you going for your travels i hear a follow-up to rational optimists in the works.

11:35What are you doing out here right now? Yeah, I'm out here to pick people's brains, to re-energize my own optimism about technology and innovation and the future, because I'm writing a book, which at some point I'm calling it The Rational Pessimist. I don't think that's what it's going to be called. It's probably going to be called the, well, no, actually, I'm not going to tell you what it's going to be called in case someone else steals my title. But I'm going to, I've been to LA. I'm here in Austin, and I'm very excited to be here in Austin, already blown away by some of the things I've seen.

12:09San Francisco, New York, Washington. And the idea is to reconcile my continuing optimism about what technology and innovation can do for human living standards in the rest of this century, looking forwards this time, because the rational optimist didn't really look forward it just said appreciate what we've achieved please um to reconcile that with my increasing fury at the um over regulation over bureaucratization over uh um uh um sort of uh cultural uh deceleration that we're putting on uh all that process so i think the difference that bothers me is between making our grandchildren twice as rich in 2100 as today, all over the world, and making them 10 times as rich.

13:09That is really the opportunity. It's a big difference. And it's an enormous difference. Because if they were 10 times as rich, if the average African was richer in 2100 than the average American is today in real terms, think what we could achieve in terms of human living standards, health, environmental protection, social justice, whatever it is you want. So the opportunity cost of not pursuing good policies in Europe in particular, also in China, to some extent also in America, is an enormously important issue, I think. I think people don't realize this when we talk about great wealth, a lot of them who have been told to be against capitalism, they just see it as like messy industry or something.

13:50But you and I both know, if you're much wealthier, it's a much cleaner world, It's a much more beautiful world. Like everything's better, right, with more wealth overall. It's extraordinary how much there is a correlation between growth and cleanliness, you know, both, you know, cleanliness in terms of disease, but also cleanliness in terms of the environment. And, you know, we're actually making the number of humpback whales in the world, right, was down to 5 ,000 in the mid-1960s. It's now 130 ,000. You know, that's an enormous increase. And, you know, 26 times as many humpback whales as when I was a kid.

14:28I thought they were going to go extinct. I thought the great whales were finished. I was told that in the 1960s. So we've done a wonderful job of cleaning up large parts of the ocean. We're reforesting the globe. There is more forest cover every year now. We've got more protected lands, et cetera, et cetera. So there's no doubt that if we could innovate and develop technologies, we could leave a much better planet to our grandchildren. Whereas if we slow down or go communist again, which, of course, communism did terrible damage to the environment, then we could go backwards on these things. So it's partly because I'm a keen environmentalist that I want to see economic growth.

15:13People don't understand that. They think, you know, I'm constantly told you can't have infinite growth in a finite world. Not true. That's not the case. Because growth can consist of doing more with less. So you have the size of your machine or have the amount of energy going into it. That is growth. There's this terrible but fun game called SimCity I used to play as a kid. And I was showing my daughter it and I was playing it again. I didn't realize that they set it up with this bad framework where you have to have dirty industry in order for your town to get going and grow. And it pollutes everything.

15:42And it's like it's somehow teaching you that capitalism and dirtiness are the part of the saying, which is actually not true. But it's the assumptions they build into things they use to teach us right now. Well, the poisoning of the minds of our young people is a real problem. It's very bad in Europe. But I think it's bad all over the world where they're being told that enterprise is a bad thing. Commerce is a necessary evil. It's not. It's the best way of bringing people together, actually, and making people cooperative and collaborative. I think it's basically it helps you self-actualize more and it helps create more for the world when you get smart people to be part of this enterprise.

16:15It's a positive thing all around. I want to go through some of my favorite books of yours because there's a lot of them and there's a lot of different things. We can't cover all of it. Your most recent book, it looks like you had fun writing it. It was on bird, sex, and beauty, extraordinary implications of Charles Darwin's strangest idea. Where did you get the idea to write about this? Well, it was partly a labor of love because I'm a passionate bird watcher. And over recent years, I've developed a habit of getting up at four in the morning in the spring to watch this particular ritual that this bird called the black grouse does, where a bunch of males get together and beat each other up before sunrise.

16:51And then females turn up and mate with the winner. Sounds like the inner city or the old days in some of my countries I came from. it's uh it's pretty amazing thing and so i wanted an excuse to spend a lot of time watching this and write a book about it and i this was actually what i did my phd on very many very many years ago was the sex life of birds and how they have how it evolves it's similar to deer right because you shoot you shoot bucks when they're fighting sometimes everyone's sitting around watching and you have to sneak up and make sure no one sees you right in the german forest and you right it's actually quite related if you're right but unlike deer you see mammals compete on strength those those bucks are trying to but they're trying to show the strongest fit they roar and they grunt and they're brown birds sing and are beautiful and are blue and red and yellow you know so they they they they do it aesthetically whereas mammals by brute force you can't go on on that you're polite so you you actually popularized a term uh called the red queens race i think in the 1990s but we all know that term from you when we talk about for example AI today with the LLMs, they're in a Red Queens race.

17:58They have to run really hard just to stay in the same place of where they are. It relates to this a little bit. I thought it was very interesting. You were talking about how once some of the birds, through evolution, once they start to do weird, new, funny things, the women have to make sure that their sons are going to do those too. It starts going off. This is the extraordinary insight that Darwin was almost there and the guy Michael Fisher came up with the idea, is that there could be a very different form of evolution than natural selection. Yeah. And it would take the form of if the females are mating selectively, saying, I'm going to mate with the male with the best song or the longest tail, then any female that deviates from that pattern is going to have a son who doesn't have a long tail or a good song.

18:45So he's going to be a weird guy. Yeah. So the females then have to follow the fashion. And that means that the tales are going to get longer and longer, and the songs are going to get more and more elaborate. And to crazy extent sometimes, you get this unbelievable exaggeration of these bright colors and ornaments and things like that. And it's a sort of runaway process, which makes the males less likely to survive, actually. You have to fight really hard, use the energy to do that. It's seduction of the hottest rather than survival of the fittest. The other take I thought was quite interesting on it is the youth are more open to innovation in fashion than the older ones, right?

19:25So you see this, like a lot of parents don't understand the kids' music. I don't know if this is related at all. But I think you said the first-year birds especially, but also the second-year females are much more interested in new shiny objects or new ways of doing things from the males, whereas the other ones aren't. How does that tie into it? Yeah, well, I think you're right. An awful lot of innovation comes from the young in our own society. I think you've got to be careful not to read too much of this bird evolution stuff into human society because we're very different. We form pair bonds.

19:54At least you and I do. But most people do. And, you know, we're not highly polygamous like these birds. But there is clearly sexual selection going on. And one of the theories I touch on at the end of the book is the theory that the human brain, which exploded in size around 2 million years ago, very suddenly increased the rate at which it was expanding at huge cost to the individuals. Because women must have had to die in quite large numbers trying to give birth to these big brain babies. Interesting. So that could have been a sexual selection thing. This could have been sexual selection, not natural selection.

20:32Wow. Because what do we use our big brains for? We use it to write poetry and do art and be funny and all these kind of things. So we use it for seduction. So there's an argument that this thing is the human version of the peacock's tail. That's fascinating. I want to push back on the – I do parabon. We're very traditional. But I want to push back because I thought it was interesting. You know, doves, we always saw the picture of them being love birds. But then we found out that the women are cheating on the guy constantly and running around with the alpha male and coming back to the guy giving her resources.

21:00but in poor communities all over the world, I think in Britain and rural poor communities, they measured it was like 25 % at least of the kids were not from the right father. Not just in poor communities. I think it was more in poor communities. I think you're right. Yeah, this was a discovery really made in animals in the 1990s. You see all these birds forming a pair bond and the male and the female both help raise the kids and that's fine, but it turns out half the eggs in that nest and not his because she likes the song of the guy next door and she's snuck off and but he's the alpha so she can't get resources for him she only get she can't get resources but this is not unknown in human beings that you stick with the guy who's good at providing but you get the genes off the tennis coach yeah you gotta watch out the tennis coaches uh in 2020 in 2020 matt you wrote how innovation works and why it flourishes in freedom this is obviously an extremely important topic.

21:55We're in a technology race with China. How do we think about industrial state policy, state intervention? I think you and I, your book talks about how it works bottom up, not top down. So what does this mean for all this industrial policy? Are there some ways to balance the freedom and free trade markets with some sort of national security or reshoring key industries and still innovating? How should we think about it? I think clearly it's impossible to get the state out of the innovation game altogether. I mean, it's taking a huge amount of your money off you. So you might as well have some of it spent on innovation.

22:25That's one way of looking at it. But I think the lesson that I've seen from all around the world is that the idea that you can decide what to innovate next, what to invent next, based on what wise men inside government know about the world is very mistaken. And whether it's China or America or anywhere else, You've got to allow the free exchange of ideas among ordinary people and ordinary entrepreneurs to produce the next innovations. And you've got to free that process up. And actually, China does show that because when China became a rapidly growing and pretty innovative nation, it did so by liberating its entrepreneurs.

23:11Deng Xiaoping, you know, turned around and said, look, you can, farmers can do what they like now. Entrepreneurs can do what they like now. And the result was this explosion of economic growth in China because there were very few of the regulations and rules that hamstring entrepreneurs often in the West. He learned from Singapore from Li Kuan Yee. That's changed. Yes, exactly. But that has changed under Xi Jinping, I think. Yeah. I think he's way more like a Ming emperor or Mao Zedong in that he wants to control everything from the center. And that's not going to end well. I mean, you've seen what's happened to a lot of Chinese entrepreneurs.

23:44as they've been swallowed up by state-owned enterprises or partnerships with them. I've had multiple good friends who died in their sleep in their 40s because they were against what was going on in China. So it's a very scary time right now if you're a great builder there. And then you've seen the number of tech starts have collapsed over the last four years in China. Who in their right mind? So by the way, a lot of us here, I've built multiple big companies. Elon, hundreds of us have built multiple big companies. If you're in China, you're already very successful. Why would you start another one?

24:11You just become a target at this point. Right. And Jack Ma experienced that and many others. So, I mean, I think the idea that China is about to overtake the US is looking out of date, actually. I think its economic growth is largely dependent on its property sector now. It's slowing down. And yes, it's going to be a force to be reckoned with in the modern world. But just like 40 years ago when I was living in America, everyone was panicked about Japan overtaking America. That didn't pan out. I think it's the same here. I think America is still the best bet in the world as long as it keeps its tradition of decentralized government, fragmented federal system where you've got competition between states and a open free exchange of individuals starting businesses.

25:08I think we're on the same page on that almost entirely for productivity and for wealth and for how society works as a whole. It's interesting because, for example, our government was correct about a nuclear bomb being possible with Manhattan Project and only government could have done that. And right now, China may be correct about certain things in AI that they are pushing. Their open source models in the world, for example, are now dominated by the Chinese. We're still ahead of them, but not by that much. And they have all the top AI open source models. It feels like they are choosing certain sectors where despite maybe hurting their overall society, you talk a lot about how innovation actually works.