Photo by Bernard Hermant
Why did the West become rich? Deirdre McCloskey’s Bourgeois Dignity: Why Economics Can’t Explain the Modern World (University of Chicago Press) was the most intriguing explanation I’d ever read. I reviewed it in the final print run of Liberty, December 2010. There followed her next book, which I reviewed six years later.
In Bourgeois Dignity, economic historian Deirdre McCloskey sets out to undermine economists’ explanations for the Industrial Revolution. She aims to leave standing her own theory, which has much to do with liberty.
McCloskey was educated in economics at the University of Chicago. She is a professor at the University of Illinois in economics, and also in history, English and communications. She argues that causes relating to these other fields, not economics, triggered economic history’s biggest event.
That event was the beginning of sustained growth. The world had seen growth before — in China and Egypt, among the Phoenicians and the Venetians, but it had always petered out, sapped by war or bureaucracy or population or some lack of essential fuel. Then, in Holland in the 1600s, things started to stir in a new way, and in England in the 1700s, things started really to happen. Industrial civilization birthed itself.
Why? Why there? Why then?
Capitalism was there. But as an explanation, it is not good enough. “It wasn’t ‘capitalism’ that was new in 1700,” McCloskey writes. “Markets and nonagricultural property and a town-living middle class in charge of them are very old. The market economy, contrary to what you might have heard, has existed since the caves.”
Liberty? “My libertarian friends want liberty alone to suffice, but it seems to me that it has not,” McCloskey writes. Liberty was part of it.
She calls the other part bourgeois dignity, or the creation of “a business-respecting civilization.”
This thesis is not proven in this book. Then again, this is the second of six projected books. Book one was The Bourgeois Virtues: Ethics for an Age of Commerce (2006). Her attempt at proof comes in book three. The effort here is to consider the rival explanations and knock them down.
Some explanations are purely economic. Capital accumulation is one. Maybe the British just piled up more capital than any previous people, either through thrift or the domination of others. Except that the records don’t show this. In any case the actual amount of capital needed to start the Industrial Revolution was small. “The first innovations of the Industrial Revolution,” writes McCloskey, “relied on retained earnings trade credit and modest loans from cousins and scriveners and solicitors.”
So it wasn’t capital. Nor was it trade, because trade existed long before the Industrial Revolution. China had trade. The Phoenicians had it. Rome had it. Venice had it. Canals? China had canals. Roads? Rome had roads. An island with easy access to the sea? Japan had that. Movable type? Korea had it before Gutenberg.
Many factors helped. Some might be necessary causes. Given them, what was the sufficient cause?
Sociologist Max Weber made a famous case in 1905 for “The Protestant Ethic and the Spirit of Capitalism.” McCloskey attacks this by making hash of Weber’s portrait of Benjamin Franklin as a dour workaholic—a complete misreading Franklin’s Autobiography, McCloskey says. Weber imagined Franklin as a dour proponent of “a penny saved, a penny earned,” which is not how Franklin lived his life.
Science is a better candidate as the match that lit the Industrial Revolution. But, McCloskey argues, the science of Newton and others “had practically no direct industrial applications” in the 1700s. The spinning jenny was not based on new science. The blast furnace was put to use well before anyone really understood the science of it. Many inventions followed this pattern.
Economist Douglass North and others have made a case for England’s Glorious Revolution of 1688, which made it a constitutional monarchy. McCloskey agrees that the revolution was important, but not because it changed institutions (North’s argument) but because it changed the political rhetoric.
These are each parts of an explanation, and McCloskey moves past them too quickly. Steven Johnson’s book about Joseph Priestley, The Invention of Air: A Story of Science, Faith, Revolution and the Birth of America (2009), shows the connections in the 1700s between the scientific dabblers and Protestant radicalism. Also political radicalism. The ferment of political, religious and scientific ideas clearly had something to do with the “relentless experimentation” that quickened the pace of economic change after 1700.
None of these is an economic explanation. None focuses on the economists’ prudential and utility-maximizing man, who McCloskey calls “Max U.” Max U acts on the rule of Prudence Only, and McCloskey argues that it took more than that to create the world’s first Industrial Revolution.
“Prudence is a virtue,” she writes. “It is a virtue characteristic of a human seeking purely monetary profit—but also of a rat seeking cheese and of a blade of grass seeking light. Consider that temperance and courage and love and justice and hope and faith are also virtues, and that they are the ones defining of humans.”
What unleashed all these virtues? Writes McCloskey: “It was words.”
What words? The words of the scientists and scientific tinkerers; of writers like Defoe and Locke; of the religious dissenters; of the Levellers, who had argued during the English Civil War of the 1640s for religious toleration and natural rights; and of the merchants, who learned from Holland of the 1600s a new dignity of commerce and trade.
It was also the time economics was being invented. Around 1700 in several places in Europe were published “strikingly modern defenses of free markets,” McCloskey writes.
“Nothing remotely like their thought can be found earlier in Europe, and only glimmers elsewhere.”
All this is asserted and outlined, with most of the argument saved for a later book. Still, there is enough to be tantalizing.
Bourgeois Dignity has some fine arguments —and a lot of them. It has 46 chapters. Often it wanders to illustrate a point, or to inject a personal thing. For example, when talking about trade protection, and what a bad idea it is, McCloskey mentions former CNN journalist Lou Dobbs, a protectionist, saying, “Dobbs majored in economics at Harvard College, but didn’t understand; to be quite fair, though, I majored in economics, too, a couple of years earlier — and I also didn’t understand, until returning to the same point in graduate school and then teaching it and then writing books about it: drink deep, or taste not the Pierian spring…”
“Taste not the Pierian spring” is a reference to Alexander Pope, which you have to get on your own— and there are a number of such references in the book. At one point McCloskey says, “Economists and historians who believe themselves to be quite exempt from any philosophical influences are usually the slaves of some defunct philosopher of science a few decades back — commonly a shaky logical positivist nearly a hundred years back.” Here she is mimicking John Maynard Keynes.
Then there are the quotes. She quotes economists Paul Collier, Robert Lucas, Israel Kirzner, F.A. Hayek, Joseph Schumpeter and Frédéric Bastiat; Leveller John Lilburne, Tammany Hall pol George Washington Plunkitt, antropologist Marshall Sahlins, sociologist Ferdinand Tönnies, historians Christine MacLeod, Joyce Appleby and Jack Hexter; novelist Jane Austen, essayist Michel de Montaigne, philosophers Alain de Botton, José Ortega y Gasset, John Stuart Mill, Friedrich Engels and Karl Marx; and the Roman ancient Marcus Tullius Cicero. All this by page 25 — and she keeps it up all the way to page 450.
She also takes jabs at rival academics. In arguing that the huge increase in output cannot be explained by capital investment, she writes, “Our economist colleagues… want very much to go on believing that the quantity of output depends not on ideas independent of material causes but mainly on the labor applied and most especially on the masses of physical and human capital present, Q=F(L,K)—so lovely is the equation, so tough and masculine and endlessly mathematizable.”
This is a jab from a woman who famously used to be a man.
Some readers will get annoyed at this indiscipline. One crabby fellow wrote at Amazon.com that McCloskey’s first “Bourgeois” book was “rambling, confused (or, at least, confusing), idiosyncratic, grandiose and self-serving…” I confess that I tried the first book and gave it up, and that some of
those labels might be pasted on this book. It is not, however, “confused.” If it occasionally rambles, it does so entertainingly. It is intelligent, and not dry. I enjoyed it, and am awaiting Book #3.
© 2010 Bruce Ramsey
Book #3 came out in 2016, and my review was posted on the Liberty web page December 12, 2016.
Bourgeois Equality: How Ideas, not Capital or Institutions, Enriched the World (University of Chicago, 2016) is the third book inProf. Deirdre McCloskey’s trilogy, following Bourgeois Virtues (2006) and Bourgeois Dignity (2010), on the rise of the modern economy. In Dignity, she knocked down rival theories of what made the modern world. Now she argues for her theory — that the modern world was started by ideas, rhetoric, talk.
It’s a better theory than it sounds. In Bourgeois Equality she defends it ably and with flair.
“Equality” has been the Left’s word. Libertarians have no interest in an equal possession of income or wealth, and we don’t believe that everyone’s voice has an equal claim on our attention. We do believe in equal liberty to strivefor income and wealth, to talk and write and thereby attempt to win our attention. We forget, sometimes, how powerful that kind of equality can be, and rarely imagine what the world was like before people had it. A third of a millennium ago the Englishmen who dared proclaim it were smeared as “levellers” and put in prison.
That is when the modern world was just beginning.
Deirdre McCloskey is a libertarian and professor of economics, history, English, and communications at the University of Illinois, Chicago. In Equality, her attention is on the development of “a business-respecting civilization,” with its seed in Venice and Florence in the 1500s, its sprouting in Holland in the 1600s, and its flowering in England in the 1700s. Since 1800, the result has been what McCloskey calls “the Great Enrichment.”
Everyone knows the world got richer, but they seldom reflect on the magnitude of it. Consider Afghanistan. People in villages there live on $3 a day, “which before 1800,” McCloskey writes, “was what the average human more or less everywhere expected to make.” In the rich countries, average income per person is about $100 per day. The earth carries vastly more people than in 1800, and life expectancy has doubled.
What started all this? It was not mere saving and investment, “piling brick upon brick” of the medieval economy. It was creating a new economy, over and over again, and destroying the old one.
The mental picture, McCloskey writes, “should not be nuclear fission, the reaching of a threshold — in which, with the creative people bouncing against each other, the reaction becomes self-sustaining. It was more like a forest fire. The kindling for a creative conflagration lay about for millennia, carefully prevented from burning by traditional societies and governing elites with watering cans. Then the historically unique rise of liberty and dignity for ordinary people disabled the watering cans and put the whole forest to the torch.”
The match was the idea that the aristocracy and established church had no right to rule. The alternative was the practical egalitarianism of accomplished commoners — merchants and artisans. These bourgeois had been around for centuries, but always had to bow to their betters. Then they stopped bowing and made a new world.
“No bishops,” McCloskey writes. “And at length no lords and kings. And then no central planning or expert regulation. Laissez faire.”
She calls the new idea “the Bourgeois Deal”: You are free to try something new. If it pays, you get to keep the money and push on.
The change had begun with religion. Printing had put the Bible in the hands of well-off commoners, who could interpret the Good Book in any way they liked — focusing on worldly works rather than an afterlife, for instance. This brought the Reformation, bloody war, and eventually a godly compromise: religious laissez-faire. An early apostle of it, when it was still new and strange, was the English Leveller John Lilburne, who wrote in 1649 that every person should be free “to exercise of Religion according to his Conscience, nothing having caused more distractions, and heart burnings in all ages.”
Along with freedom to print Bibles came freedom to print other things. “By 1600 the Dutch had taken over from the Venetians the role of unrestricted publishers of Europe,” McCloskey writes, “publishing the books of heretics like Baruch Spinoza in Latin, John Locke in English, and Pierre Bayle in French, not to mention pornography in whatever language would sell.”
A marketplace of ideas — and other things.
Freedom also came to science, an event that some historians say created the modern world. McCloskey disagrees. “Science didn’t make the modern world,” she writes. “Technology did, in the hands of newly liberated and honored instrument makers and tinkerers.” The economic payoffs from elite science came later. The methodof science, in her view, is what mattered first. A scientist was free to advance a claim, and other scientists were free to check it. Innovation, but a market test: the Bourgeois Deal.
“The only alternative to a marketplace of ideas,” McCloskey writes, “is a socialism of ideas.” Or an aristocracy of ideas, which amounts to the same thing.
The break from the aristocracy of ideas began with talk, much of it in the new coffeehouses of the late 1600s. “It is the habits of the lip that shape the habits of the mind and heart,” McCloskey writes. “Rhetoric therefore is fundamental. We can know the rhetoric of an age, the habits of the lip, by reading its literary and other written products.”
In Bourgeois Equality, McCloskey pays much more attention to words than numbers. In her hands, for example, Daniel Defoe’s pathbreaking novel Robinson Crusoe (1719) becomes an example of a commoner who demonstrates a “prudent calculation of costs and benefits” as he scavenges items from his wrecked ship. She also has a whole chapter on the word “honest,” and how it changed from its aristocratic meaning, “honorably high-class,” to its modern meaning, “truthful.”
Others have written that economic development has cultural roots. David Landes, for example, wrote in The Wealth and Poverty of Nations (1998), “Culture makes all the difference . . . What counts is work, thrift, honesty, patience, tenacity.” Which at any point in time is true enough. McCloskey’s take is to specify that it is the attitude toward these things — “the rhetoric people presently find persuasive” — that comes first.
Can rhetoric really be more important than law and institutions? Yes, she says: “There is nothing weird or scary or unscientific or self-contradictory about claiming that rhetoric matters.”
As a Christian, McCloskey makes a few jabs at fellow libertarians who don’t care about the poor. She does care. She is accepting of the welfare state, as long as it stays within reasonable bounds. Her concern is that political, cultural, and economic life remain open to innovation, and always with that egalitarian regulator: a market test. Innovation should not mean giving power to experts and elites. “Engineers,” she writes, “are full of bad ideas, too.”
So are some economists and historians. Read Bourgeois Equality, and give it the market test.
© 2016 Bruce Ramsey
McCloskey posted on the bottom of my review that she found it lucid and accurate. It is unusual for an author to post a comment, either unfavorable or favorable. I appreciated it.