When I was a student here in Oxford in the 1970s, the future of the world was bleak.

The
population explosion was unstoppable. Global famine was inevitable. A cancer epidemic caused
by chemicals in the environment was going to shorten our lives. The acid rain was falling on the
forests. The desert was advancing by a mile or two a year. The oil was running out. And a nuclear
winter would finish us off. None of those things happened. (Laughter) And astonishingly, if you
look at what actually happened in my lifetime, the average per-capita income of the average
person on the planet, in real terms, adjusted for inflation, has tripled. Lifespan is up by 30 percent
in my lifetime. Child mortality is down by two-thirds. Per-capita food production is up by a third.
And all this at a time when the population has doubled.

How did we achieve that -- whether you think it's a good thing or not -- How did we achieve that?
How did we become the only species that becomes more prosperous as it becomes more
populous? The size of the blob in this graph represents the size of the population. And the level of
the graph represents GDP per capita. I think to answer that question you need to understand how
human beings bring together their brains and enable their ideas to combine and recombine, to
meet and, indeed, to mate. In other words, you need to understand how ideas have sex.

I want you to imagine how we got from making objects like this to making objects like this. These
are both real objects. One is an Acheulean hand axe from half a million years ago of the kind
made by Homo erectus. The other is obviously a computer mouse. They're both exactly the same
size and shape to an uncanny degree. I've tried to work out which is bigger, and it's almost
impossible. And that's because they're both designed to fit the human hand. They're both
technologies. In the end, their similarity is not that interesting. It just tells you they were both
designed to fit the human hand. The differences are what interest me. Because the one on the
left was made to a pretty unvarying design for about a million years -- from one-and-a-half million
years ago to half a million years ago. Homo erectus made the same tool for 30,000 generations.
Of course there were a few changes, but tools changed slower than skeletons in those days.
There was no progress, no innovation. It's an extraordinary phenomenon, but it's true. Whereas
the object on the right is obsolete after five years. And there's another difference too, which is the
object on the left is made from one substance. The object on the right is made from a confection
of different substances, from silicon and metal and plastic and so on. And more than that, it's a
confection of different ideas, the idea of plastic, the idea of a laser, the idea of transistors. They've
all been combined together in this technology.

And it's this combination, this cumulative technology, that intrigues me. Because I think it's the
secret to understanding what's happening in the world. My body's an accumulation of ideas too,
the idea of skin cells, the idea of brain cells, the idea of liver cells. They've come together. How
does evolution do cumulative, combinatorial things? Well, it uses sexual reproduction. In an
asexual species, if you get two different mutations in different creatures, a green one and a red
one, then one has to be better than the other. One goes extinct for the other to survive. But if you
have a sexual species, then it's possible for an individual to inherit both mutations from different
lineages. So what sex does is it enables the individual to draw upon the genetic innovations of the
whole species. It's not confined to its own lineage.

What's the process that's having the same effect in cultural evolution as sex is having in biological
evolution? And I think the answer is exchange, the habit of exchanging one thing for another. It's
a unique human feature. No other animal does it. You can teach them in the laboratory to do a
little bit of exchange. And indeed there's reciprocity in other animals. But the exchange of one
object for another never happens. As Adam Smith said, "No made ever saw a dog make a fair
exchange of a bone with another dog." (Laughter) You can have culture without exchange. You
can have, as it were, asexual culture. Chimpanzees, killer whales, these kinds of creatures, they
have culture. They teach each other traditions which are handed down from parent to offspring. In
this case, chimpanzees teaching each other how to crack nuts with rocks. But the difference is
that these cultures never expand, never grow, never accumulate, never become combinatorial.
And the reason is because there is no sex, as it were, there is no exchange of ideas.
Chimpanzee troops have different cultures in different troops. There's no exchange of ideas
between them.

And why does exchange raise living standards? Well, the answer came from David Ricardo in
1817. And here is a Stone Age version of his story, although he told it in terms of trade between
countries. Adam takes four hours to make a spear and three hours to make an axe. Oz takes one
hour to make a spear and two hours to make an axe. So Oz is better at both spears and axes
than Adam. He doesn't need Adam. He can make his own spears and axes. Well no, because if
you think about it, if Oz makes two spears and Adam make two axes, and then they trade, then
they will each have saved an hour of work. And the more they do this, the more true it's going to
be. Because the more they do this, the better Adam is going to get at making axes, and the better
Oz is going to get at making spears. So the gains from trade are only going to grow. And this is
one of the beauties of exchange, is it actually creates the momentum for more specialization,
which creates the momentum for more exchange and so on. Adam and Oz both saved an hour of
time. That is prosperity, the saving of time in satisfying your needs.

Ask yourself how long you would have to work to provide for yourself and hour of reading light
this evening to read a book by. If you had to start from scratch, let's say you go out into the
countryside. You find a sheep. You kill it. You get the fat of of it. You render it down. You make a
candle, etc. etc. How long is it going to take you? Quite a long time. How long do you actually
have to work to earn an hour of reading light if you're on the average wage in Britain today? And
the answer is about half a second. Back in 1950, you would have had to work for eight seconds
on the average wage to acquire that much light. And that's seven and a half seconds of prosperity
that you've gained. Since 1950, as it were. Because that's seven and a half seconds in which you
can do something else. Or you can acquire another good or service. And back in 1880, it would
have been 15 minutes to earn that amount of light from the average wage. Back in 1800, you'd
have had to work six hours to earn a candle that could burn for an hour. In other words, the
average person on the average wage could not afford a candle in 1800.

Go back to this image of the axe and the mouse, and ask yourself: "Who made them and for
who?" The stone axe was made by someone for himself. It was self-sufficiency. We call that
poverty these days. But the object on the right was made for me by other people. How many
other people? Tens? Hundreds? Thousands? You know, I think it's probably millions. Because
you've to include the man who grew the coffee, which was brewed for the man who was on the oil
rig, who was drilling for oil, which was going to be made into the plastic, etc. They were all
working for me, to make a mouse for me. And that's the way society works. That's what we've
achieved as a species.

In the old days, if you were rich, you literally had people working for you. That's how you got to be
rich; you employed them. Louis XIV had a lot of people working for him. They made his silly
outfits, like this. (Laughter) And they did his silly hairstyles, or whatever. He had 498 people to
prepare his dinner every night. But a modern tourist going around the palace of Versailles and
looking at Louis XIV's pictures, he has 498 people doing his dinner tonight too. They're in bistros
and cafes and restaurants and shops all over Paris. And they're all ready to serve you at an
hour's notice with an excellent meal that's probably got higher quality than Louis XIV even had.
And that's what we've done, because we're all working for each other. We're able to draw upon
specialization and exchange to raise each other's living standards.

Now, you do get other animals working for each other too. Ants are a classic example; workers
work for queens and queens work for workers. But there's a big difference, which is that it only
happens within the colony. There's no working for each other across the colonies. And the reason
for that is because there's a reproductive division of labor. That is to say, they specialize with
respect to reproduction. The queen does it all. In our species, we don't like doing that. It's the one
thing we insist on doing for ourselves, is reproduction. (Laughter) Even in England, we don't leave
reproduction to the Queen.
(Applause)

So when did this habit start? And how long has it been going on? And what does it mean? Well, I
think, probably, the oldest version of this is probably the sexual division of labor. But I've got no
evidence for that. It just looks like the first thing we did was work male for female and female for
male. In all hunter-gatherer societies today, there's a foraging division of labor between, on the
whole, hunting males and gathering females. It isn't always quite that simple. But there's a
distinction between specialized roles between males and females. And the beauty of this system
is that it benefits both sides. The woman knows that, in the Hadzas' case here -- digging roots to
share with men in exchange for meat -- she knows that all she has to do to get access to protein
is to dig some extra roots and trade them for meat. And she doesn't have to go on an exhausting
hunt and try and kill a warthog. And the man knows that he doesn't have to do any digging to get
roots. All he has to do is make sure that when he kills a warthog it's big enough to share some.
And so both sides raise each other's standards of living through the sexual division of labor.

When did this happen? We don't know, but it's possible that neanderthals didn't do this. They
were a highly cooperative species. They were a highly intelligent species. Their brains on
average, by the end, were bigger than yours and mine in this room today. They were imaginative.
They buried their dead. They had language probably, because we know they had the FOXP2
gene of the same kind as us, which was discovered here in Oxford. And it looks like they probably
had linguistic skills. They were brilliant people. I'm not dissing the neanderthals. But there's no
evidence of a sexual division of labor. There's no evidence of gathering behavior by females. It
looks like the females were cooperative hunters with the men. And the other thing there's no
evidence for is exchange between groups. Because the objects that you find in neanderthal
remains, the tools they made, are always made from local materials. For example, in the
Caucasus there's a site where you find local neanderthal tools. They're always made from local
chert. In the same valley there are modern human remains from about the same date, 30,000
years ago. And some of those are from local chert, but more -- but many of them are made from
obsidian from a long way away. And when human beings began moving objects around like this,
it was evidence that they were exchanging between groups.

Trade is 10 times as old as farming. People forget that. People think of trade as a modern thing.
Exchange between groups has been going on for a hundred thousand years. And the early
evidence for it crops up somewhere between 80 and 120,000 years ago in Africa, when you see
obsidian and jasper and other things moving long distances in Ethiopia. You also see seashells --
as discovered by a team here in Oxford -- moving 125 miles inland from the Mediterranean in
Algeria. And that's evidence that people have started exchanging between groups. And that will
have led to specialization.

How do you know that long-distance movement means trade rather than migration? Well, you
look at modern hunter gatherers like aboriginals, who quarried for stone axes at a place called Mt.
Isa, which was a quarry owned by the Kalkadoon tribe. They traded them with their neighbors for
things like stingray barbs. And the consequence was that stone axes ended up over a large part
of Australia. So long-distance movement of tools is a sign of trade, not migration.

What happens when you cut people off from exchange, from the ability to exchange and
specialize? And the answer is that, not only do you slow down technological progress, you can
actually throw it into reverse. An example is Tasmania. When the sea level rose, and Tasmania
became an island 10,000 years ago, the people on it, not only experienced slower progress than
people on the mainland, they actually experienced regress. They gave up the ability to make
[bone] tools and fishing equipment and clothing because the population of about 4,000 people
was simply not large enough to maintain the specialized skills necessary to keep the technology
they had. It's as if the people in this room were plonked on a desert island. How many of the
things in our pockets could we continue to make after 10,000 years? It didn't happen in Tierra del
Fuego -- similar island, similar people. The reason, because Tierra del Fuego is separated from
South America by a much narrower straight. And there was trading contact across that straight
throughout 10,000 years. The Tasmanians were isolated.

Go back to this image again and ask yourself, not only who made it and for who, but who knew
how to make it. In the case of the stone axe, the man who made it knew how to make it. But who
knows how to make a computer mouse? Nobody, literally nobody. There is nobody on the planet
who knows how to make a computer mouse. I mean this quite seriously. The president of the
computer mouse company doesn't know. He just knows how to run a company. The person on
the assembly line doesn't know because he doesn't know how to drill an oil well to get oil out to
make plastic, and so on. We all know little bits, but none of us knows the whole.

I am of course quoting from a famous essay by Leonard Reed, the economist in the 1950s, called
"I, Pencil" in which he wrote about how a pencil came to be made, and how nobody knows even
how to make a pencil, because the people who assemble it don't know how to mine graphite. And
they don't know how to fell trees and that kind of thing. And what we've done in human society,
through exchange and specialization, is we've created the ability to do things that we don't even
understand. It's not the same with language. With language we have to transfer ideas that we
understand with each other. But with technology, we can actually do things that are beyond our
capabilities.

We've gone beyond the capacity of the human mind to an extraordinary degree. And by the way,
that's one of the reasons that I'm not interested in the debate about I.Q., about whether some
groups have higher I.Q.s that other groups. It's completely irrelevant. What's relevant to a society
is how well people are communicating their ideas, and how well they're cooperating, not how
clever their individuals are. So we've created something called the collective brain. We're just the
nodes in the network. We're the neurons in this brain. It's the interchange of ideas, the meeting
and mating of ideas between them, that is causing technological progress, incrementally, bit by
bit. However, bad things happen. And in the future, as we go forward, we will, of course
experience terrible things. There will be wars; there will be depressions; there will be natural
disasters. Awful things will happen in this century, I'm absolutely sure. But I'm also that, because
of the connections people are making, and the ability of ideas to meet and to mate as never
before. I'm also sure that technology will advance, and therefore living standards will advance.
Because through the cloud, through crowd sourcing, through the bottom-up world that we've
created, where not just the elites, but everybody is able to have their ideas and make them meet
and mate, we are surely accelerating the rate of innovation.

Thank you.

(Applause)