The Rational Optimist

Matt Ridley's The Rational Optimist is a fun and interesting read. His thesis is that development and growth, from millions of years ago continuing through today, is due to voluntary trade based on specialization according to comparative advantage. He also bases his arguments on a bottom up development rather than a top down one. He plays tribute to, but does not put in the premiere position I do, the role of private property rights. Trade will not occur without a form of private property rights.

This morning's Wall Street Journal has an opinion piece by Bret Stephens that makes a point I have been trying to make for some time. China's development is currently a top down procedure. It will not be successful in the end. Much like Japan's 1970s industrial policy, which people like Lestor Thurow and Paul Krugman were supporting as the way to go, ledto the lost two decades Japan is currently experiencing. Top down development can not be successful; to think so is to ignore Hayek's Fatal Conceipt.

Another good read, but not easy going, is Capitalism with Chinese Characteristics. It ties in with the Ridley book.