The Gaia hypothesis – that life interacts with the planet so as to maintain conditions suitable for life – has been both controversial and influential, with opinions ranging from ‘obvious’ to ‘impossible’. Numerous models, most famously DaisyWorld, have been proposed to show how life can favourably regulate the climate in the face of external perturbation. However some argue that the geological record, showing large fluctuations in temperature and atmospheric concentrations, contradicts Gaia. We propose that a modified version of the Tangled Nature Model can shed light on this discussion. This model indicates that while there can be large fluctuations during any individual history, the system tends to have a larger carrying capacity with life than without.The tendency of life to increase habitability can be explained in terms of entropic barriers and we believe this provides a useful way to think about species-environment co-evolution as well as a way to reconcile the strong statements of Gaia theory with the Earth’s chaotic history.