{"id":491,"date":"2018-08-08T21:26:26","date_gmt":"2018-08-09T04:26:26","guid":{"rendered":"http:\/\/bruceramsey.net\/?page_id=491"},"modified":"2025-07-26T23:37:34","modified_gmt":"2025-07-27T06:37:34","slug":"why-were-rich-2010-16","status":"publish","type":"page","link":"https:\/\/bruceramsey.net\/index.php\/why-were-rich-2010-16\/","title":{"rendered":"Why We’re Rich (2010-16)"},"content":{"rendered":"\t\t
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\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Why did the West become rich? Deirdre McCloskey\u2019s Bourgeois Dignity: Why Economics Can\u2019t 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.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\u00a0 \u00a0 \u00a0 \u00a0 \u00a0In Bourgeois Dignity,<\/em> economic historian Deirdre McCloskey sets out to undermine economists\u2019 explanations for the Industrial Revolution. She aims to leave standing her own theory, which has much to do with liberty.<\/span><\/p>

\u00a0 \u00a0 \u00a0 \u00a0 \u00a0McCloskey 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\u2019s biggest event.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0That event was the beginning of sustained growth. The world had seen growth before \u2014 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.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Why? Why there? Why then?<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Capitalism was there. But as an explanation, it is not good enough. \u201cIt wasn\u2019t \u2018capitalism\u2019 that was new in 1700,\u201d McCloskey writes. \u201cMarkets 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.\u201d<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Liberty? \u201cMy libertarian friends want liberty alone to suffice, but it seems to me that it has not,\u201d McCloskey writes. Liberty was part of it.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0She calls the other part bourgeois dignity, or the creation of\u00a0\u00a0\u201ca business-respecting civilization.\u201d<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0This thesis is not proven in this book. Then again, this is the second of six projected books. Book one was\u00a0The Bourgeois Virtues: Ethics for an Age of Commerce\u00a0<\/i>(2006). Her attempt at proof comes in book three. The effort here is to consider the rival explanations and knock them down.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Some 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\u2019t show this. In any case the actual amount of capital needed to start the Industrial Revolution was small. \u201cThe first innovations of the Industrial Revolution,\u201d writes McCloskey, \u201crelied on retained earnings, trade credit and modest loans from cousins and scriveners and solicitors.\u201d<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0So it wasn\u2019t 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.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Many factors helped. Some might be necessary causes. Given them, what was the sufficient cause?<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Sociologist Max Weber made a famous case in 1905 for \u201cThe Protestant Ethic and the Spirit of Capitalism.\u201d McCloskey attacks this by making hash of Weber\u2019s portrait of Benjamin Franklin as a dour workaholic\u2014a complete misreading Franklin\u2019s\u00a0Autobiography<\/i>, McCloskey says. Weber imagined Franklin as a dour proponent of \u201ca penny saved, a penny earned,\u201d which is not how Franklin lived his life.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Science is a better candidate as the match that lit the Industrial Revolution. But, McCloskey argues, the science of Newton and others \u201chad practically no direct industrial applications\u201d 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.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Economist Douglass North and others have made a case for England\u2019s Glorious Revolution of 1688, which made it a constitutional monarchy.\u00a0\u00a0McCloskey agrees that the revolution was important, but not because it changed institutions (North\u2019s argument) but because it changed the political rhetoric.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0These are each parts of an explanation, and McCloskey moves past them too quickly. Steven Johnson\u2019s book about Joseph Priestley,\u00a0The Invention of Air: A Story of Science, Faith, Revolution and the Birth of America\u00a0<\/i>(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 \u201crelentless experimentation\u201d that quickened the pace of economic change after 1700.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0None of these is an\u00a0economic\u00a0<\/i>explanation. None focuses on the economists\u2019 prudential and utility-maximizing man, who McCloskey calls \u201cMax U.\u201d Max U acts on the rule of Prudence Only, and McCloskey argues that it took more than that to create the world\u2019s first Industrial Revolution.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u201cPrudence is a virtue,\u201d she writes. \u201cIt is a virtue characteristic of a human seeking purely monetary profit\u2014but 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.\u201d<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0What unleashed all these virtues? Writes McCloskey: \u201cIt was words.\u201d<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0What 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.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0It was also the time economics was being invented. Around 1700 in several places in Europe were published \u201cstrikingly modern defenses of free markets,\u201d McCloskey writes.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u201cNothing remotely like their thought can be found earlier in Europe, and only glimmers elsewhere.\u201d<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0All this is asserted and outlined, with most of the argument saved for a later book. Still, there is enough to be tantalizing.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Bourgeois Dignity\u00a0<\/i>has some fine arguments \u2014and 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, \u201cDobbs majored in economics at Harvard College, but didn\u2019t understand; to be quite fair, though, I majored in economics, too, a couple of years earlier \u2014 and I also didn\u2019t 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\u2026\u201d<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u201cTaste not the Pierian spring\u201d is a reference to Alexander Pope, which you have to get on your own\u2014 and there are a number of such references in the book. At one point McCloskey says, \u201cEconomists 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 \u2014 commonly a shaky logical positivist nearly a hundred years back.\u201d Here she is mimicking John Maynard Keynes.<\/p>

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Then there are the quotes. She quotes economists Paul Collier, Robert Lucas, Israel Kirzner, F.A. Hayek, Joseph Schumpeter and Fr\u00e9d\u00e9ric Bastiat; Leveller John Lilburne, Tammany Hall pol George Washington Plunkitt, antropologist Marshall Sahlins, sociologist Ferdinand T\u00f6nnies, historians Christine MacLeod, Joyce Appleby and Jack Hexter; novelist Jane Austen, essayist Michel de Montaigne, philosophers Alain de Botton, Jos\u00e9 Ortega y Gasset, John Stuart Mill, Friedrich Engels and Karl Marx; and the Roman ancient Marcus Tullius Cicero. All this by page 25 \u2014 and she keeps it up all the way to page 450.<\/p>

\u00a0\u00a0 \u00a0 \u00a0 \u00a0 She also takes jabs at rival academics. In arguing that the huge increase in output cannot be explained by capital investment, she writes, \u201cOur economist colleagues\u2026 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)\u2014so lovely is the equation, so tough and masculine and endlessly mathematizable.\u201d<\/p>

\u00a0 \u00a0 \u00a0 \u00a0 \u00a0This is a jab from a woman who famously used to be a man.<\/p>

\u00a0 \u00a0 \u00a0 \u00a0 \u00a0Some readers will get annoyed at this indiscipline. One crabby fellow wrote at Amazon.com that McCloskey\u2019s first \u201cBourgeois\u201d book was \u201crambling, confused (or, at least, confusing), idiosyncratic, grandiose and self-serving\u2026\u201d I confess that I tried the first book and gave it up, and that some of<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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those labels might be pasted on this book. It is not, however, \u201cconfused.\u201d If it occasionally rambles, it does so entertainingly. It is intelligent, and not dry. I enjoyed it, and am awaiting Book #3. <\/span><\/p>\n

\u00a9 2010 Bruce Ramsey<\/i><\/p>\n

         <\/span><\/span>Book #3 came out in 2016, and my review was <\/i>posted on <\/i><\/span><\/span>the Liberty web page December 12, 2016.<\/i><\/p>\n

 <\/i><\/p>\n

 <\/i>         <\/span>Bourgeois Equality: How Ideas, not Capital or Institutions, Enriched the World (University of Chicago, 2016) <\/span><\/i>is the third book in <\/span>Prof. Deirdre McCloskey\u2019s trilogy, following Bourgeois Virtues <\/i>(2006) and Bourgeois Dignity <\/i>(2010), on the rise of the modern economy. In Dignity<\/i>, she knocked down rival theories of what made the modern world. Now she argues for her theory \u2014 that the modern world was started by ideas, rhetoric, talk<\/i>.<\/span><\/p>\n

It\u2019s a better theory than it sounds. In Bourgeois Equality <\/i>she defends it ably and with flair.<\/span><\/p>\n

\u201cEquality\u201d has been the Left\u2019s word. Libertarians have no interest in an equal possession of income or wealth, and we don\u2019t believe that everyone\u2019s voice has an equal claim on our attention. We do believe in equal liberty to strive <\/i>for 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 \u201clevellers\u201d and put in prison.<\/span><\/p>\n

That is when the modern world was just beginning.<\/span><\/p>\n

Deirdre McCloskey is a libertarian and professor of economics, history, English, and communications at the University of Illinois, Chicago. In Equality<\/i>, her attention is on the development of \u201ca business-respecting civilization,\u201d 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 \u201cthe Great Enrichment.\u201d<\/span><\/p>\n

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, \u201cwhich before 1800,\u201d McCloskey writes, \u201cwas what the average human more or less everywhere expected to make.\u201d 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<\/i>.<\/span><\/p>\n

What started all this? It was not mere saving and investment, \u201cpiling brick upon brick\u201d of the medieval economy. It was creating a new economy, over and over again, and destroying the old one.<\/span><\/p>\n

The mental picture, McCloskey writes, \u201cshould not be nuclear fission, the reaching of a threshold \u2014 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.\u201d<\/span><\/p>\n

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 \u2014 merchants and artisans. These bourgeois <\/i>had been around for centuries, but always had to bow to their betters. Then they stopped bowing and made a new world.<\/span><\/p>\n

\u201cNo bishops,\u201d McCloskey writes. \u201cAnd at length no lords and kings. And then no central planning or expert regulation. Laissez faire.\u201d<\/span><\/p>\n

She calls the new idea \u201cthe Bourgeois Deal\u201d: You are free to try something new. If it pays, you get to keep the money and push on.<\/span><\/p>\n

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 \u2014 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 \u201cto exercise of Religion according to his Conscience, nothing having caused more distractions, and heart burnings in all ages.\u201d<\/span><\/p>\n

 <\/span><\/i><\/b><\/p>\n

Along with freedom to print Bibles came freedom to print other things. \u201cBy 1600 the Dutch had taken over from the Venetians the role of unrestricted publishers of Europe,\u201d McCloskey writes, \u201cpublishing 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.\u201d<\/span><\/p>\n

A marketplace of ideas \u2014 and other things.<\/span><\/p>\n

Freedom also came to science, an event that some historians say created the modern world. McCloskey disagrees. \u201cScience didn\u2019t make the modern world,\u201d she writes. \u201cTechnology did, in the hands of newly liberated and honored instrument makers and tinkerers.\u201d The economic payoffs from elite science came later. The method <\/i>of 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.<\/span><\/p>\n

\u201cThe only alternative to a marketplace of ideas,\u201d McCloskey writes, \u201cis a socialism of ideas.\u201d Or an aristocracy of ideas, which amounts to the same thing.<\/span><\/p>\n

The break from the aristocracy of ideas began with talk, much of it in the new coffeehouses of the late 1600s. \u201cIt is the habits of the lip that shape the habits of the mind and heart,\u201d McCloskey writes. \u201cRhetoric therefore is fundamental. We can know the rhetoric of an age, the habits of the lip, by reading its literary and other written products.\u201d<\/span><\/p>\n

In Bourgeois Equality<\/i>, McCloskey pays much more attention to words than numbers. In her hands, for example, Daniel Defoe\u2019s pathbreaking novel Robinson Crusoe <\/i>(1719) becomes an example of a commoner who demonstrates a \u201cprudent calculation of costs and benefits\u201d as he scavenges items from his wrecked ship. She also has a whole chapter on the word \u201chonest,\u201d and how it changed from its aristocratic meaning, \u201chonorably high-class,\u201d to its modern meaning, \u201ctruthful.\u201d<\/span><\/p>\n

Others have written that economic development has cultural roots. David Landes, for example, wrote in The Wealth and Poverty of Nations <\/i>(1998), \u201cCulture makes all the difference . . . What counts is work, thrift, honesty, patience, tenacity.\u201d Which at any point in time is true enough. McCloskey\u2019s take is to specify that it is the attitude <\/i>toward these things \u2014 \u201cthe rhetoric people presently find persuasive\u201d \u2014 that comes first.<\/span><\/p>\n

Can rhetoric really be more important than law and institutions? Yes, she says: \u201cThere is nothing weird or scary or unscientific or self-contradictory about claiming that rhetoric matters.\u201d<\/span><\/p>\n

As a Christian, McCloskey makes a few jabs at fellow libertarians who don\u2019t 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. \u201cEngineers,\u201d she writes, \u201care full of bad ideas, too.\u201d<\/span><\/p>\n

So are some economists and historians. Read Bourgeois Equality<\/i>, and give it the market test.<\/span><\/p>\n

 <\/span><\/p>\n

\u00a9 2016 Bruce Ramsey<\/span><\/em>
<\/span><\/p>\n

 <\/span><\/p>\n

  <\/span> <\/span>        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.<\/span><\/em><\/p>\n

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Photo by Bernard Hermant \u00a0 \u00a0 \u00a0 \u00a0 \u00a0Why did the West become rich? Deirdre McCloskey\u2019s Bourgeois Dignity: Why Economics Can\u2019t 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 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-491","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/bruceramsey.net\/index.php\/wp-json\/wp\/v2\/pages\/491","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bruceramsey.net\/index.php\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/bruceramsey.net\/index.php\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/bruceramsey.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bruceramsey.net\/index.php\/wp-json\/wp\/v2\/comments?post=491"}],"version-history":[{"count":21,"href":"https:\/\/bruceramsey.net\/index.php\/wp-json\/wp\/v2\/pages\/491\/revisions"}],"predecessor-version":[{"id":1646,"href":"https:\/\/bruceramsey.net\/index.php\/wp-json\/wp\/v2\/pages\/491\/revisions\/1646"}],"wp:attachment":[{"href":"https:\/\/bruceramsey.net\/index.php\/wp-json\/wp\/v2\/media?parent=491"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}