So it turns out that the Matt Ridley who writes popular
bestsellers on genomics is the same Matt Ridley who was chairman of Northern
Rock until last Friday. He also was a columnist for the Londont Telegraph,
where he used his pulpit to sketch out his fundamentally libertarian view of
life. George Monbiot now puts
all these things together, and the irony of this libertarian being bailed
out by the UK government is not lost on him:
Ridley’s core argument, which he explains at greater length in his books,
is that humans, being the products of natural selection, act only in their
own interests. But our selfish instincts encourage us to behave in ways that
appear altruistic. By cooperating and by being perceived as generous, we earn
other people’s trust. This allows us to advance our own interests more effectively
than we could by cheating, stealing and fighting…
Like Ridley, I am a biological determinist: I believe that much of our behaviour
is governed by our evolutionary history. I accept the evidence he puts forward,
but draw completely different conclusions. He believes that modern humans
are destined to behave well if left to their own devices; I believe that they
are likely to behave badly. If you belong to a small group of intelligent
hominids, all of whom are well known to each other, you will be rewarded for
cooperation and generosity within the group. (Though this does not stop your
group from attacking or exploiting another.) If, on the other hand, you can
switch communities at will, travel freely, buy in one country and sell in
another, hire strangers then fire them, you will gain more from acting only
in your own interest. You’ll have an even stronger incentive to act against
the common good if you run a bank whose lending and borrowing are so complex
that hardly anyone can understand what is happening…
Under his chairmanship, the Economist notes, Northern Rock "pushed an
aggressive business model to the limit, crossing its fingers and hoping that
liquidity would always be there". It was allowed to do so because it
was insufficiently regulated by the Bank of England and the Financial Services
Authority. When his libertarian business model failed, Ridley had to go begging
to the detested state. If the government and its parasitic bureaucrats had
not been able to use taxpayers’ money to clear up his mess, thousands of people
would have lost their savings. Northern Rock would have collapsed, and the
resulting panic might have brought down the rest of the banking system.
I’m not convinced that there’s a significant inverse correlation between cooperation
and generosity, on the one hand, and globalization, on the other. Indeed, globalization
acts as an incentive to improve governance standards in countries where they
are significantly below the world average, for otherwise those countries tend
to get frozen out of the global economy altogether. Meanwhile, globalization
is great news for high-trust countries like Switzerland or Holland. But Monbiot
is entirely right that the Northern Rock collapse is all the proof you need
that Ridley’s libertarianism could never work in practice.
(Thanks to Matt Clark for the link)