A number of times over the past few years, I’ve heard commentators speculate that we’re facing the end of capitalism.
The Nobel Prize-winning Austrian economist Friedrich Hayek said the tragedy of capitalism is that it was named by its enemies. Capitalism isn’t actually about capital, it’s about cooperation — an infinitely expanding system of trading among strangers.
A recent book by Matt Ridley called The Rational Optimist has captured my attention and imagination. For years, Ridley, a British microbiologist, has been looking at the economic history of the planet, and he now contends that all human progress starts, deepens, and expands as the result of a single daily activity: trading goods and services with strangers. In other words, all the extraordinary progress we see continually increasing in the world around us comes from the activity of trading in the marketplace. In terms of multipliers, nothing that human beings have ever created matches the multiplying power of trade.