Why Humans Triumphed: Economic Lessons

Today's Wall Street Journal has a great article, "Humans: Why They Triumphed" (subscription required, I think).  Human beings existed for maybe 300,000 years as just one species among many.  In the last 45,000 years, though, they took off and came to dominate the planet.  Why?

Matt Ridley, the author cites some economic theories as key to modern understanding of this tradeoff.  The key was not larger brain sizes (that had been common before the take-off) or opposable thumbs (ditto), but trade among people, which furthered ideas.

Trade is to culture as sex is to biology. Exchange makes cultural
change collective and cumulative. It becomes possible to draw upon
inventions made throughout society, not just in your neighborhood. The
rate of cultural and economic progress depends on the rate at which
ideas are having sex.

This echoes the modern theory of endogenous growth pioneered by Paul Romer.  (For an introduction to that line of thinking, listen to this EconTalk podcast.

The conclusion is optimistic:

There's a cheery modern lesson in this theory about ancient events.
Given that progress is inexorable, cumulative and collective if human
beings exchange and specialize, then globalization and the Internet are
bound to ensure furious economic progress in the coming century—despite
the usual setbacks from recessions, wars, spendthrift governments and
natural disasters.

Here's a key point that should be considered by conservative isolationists and liberal localists:

Once human beings started swapping things and thoughts, they stumbled
upon divisions of labor, in which specialization led to mutually
beneficial collective knowledge. Specialization is the means by which
exchange encourages innovation: In getting better at making your
product or delivering your service, you come up with new tools. The
story of the human race has been a gradual spread of specialization and
exchange ever since: Prosperity consists of getting more and more
narrow in what you make and more and more diverse in what you buy.
Self-sufficiency—subsistence—is poverty.

This article is well worth the price of the newspaper.