Subtitle: How ideas, Not Capital or Institutions Enriched the
World, Univ. of Chicago Press, Chicago, 2016, 787 pgs., index,
bibliography, notes, tables
Reviewer Comment -
This is a massive book and yet it is only volume three of a united series on
the theme of intellectual history as a causative force in economic and
political history. My view has always been that actions are based on decisions
and decisions are based on ideas. Thus, I rate this a terrific book that all
should read and comprehend. Dr. McCloskey, in this 'exordium' provides
sufficient description of the contents of volumes one and two to enable the
reader to grasp the unified theme. And we also attempt to review them (see
There are many other books that in different ways stress the significance of
ideas as the generative force behind material changes. George Gilder stresses
this recently in Knowledge and Power,
and earlier in Wealth and Poverty and
Telecosm, and Jeremy Black does the same with focus on a narrow type of
knowledge in The Power of
Knowledge. Rodney Stark presents a similar view of ideas but from a
different perspective in such books as How the
West Won, and The Victory of
Reason and Ian Morris writes Why the West
Rules for Now" about the same economic expansion.
But Dr. McCloskey provides a much different concept. It is not only their
ideas, but even more the entire cultural life of the Bourgeois - their ideas
about themselves and their place in the world - that set them apart and
actually enabled them to overcome the prevailing social disdain for everything
about them. Her ideas, concepts really are mainly two - betterment and dignity.
And for her the role of these concepts developed in northwestern Europe and
account for the explosion in human well-being since 1800. In several chapters
and in the previous two volumes she denies the various causations proposed by a
long list of other economists or historians.
Her methodology, which stresses the development of key ideas, results in her
being a sort of 'middle woman' between the sources (historians, economists,
sociologists, philosophers, authorities) she quotes as opposing her thesis and
those who provide support for it in one way or another. In support of her
theory she also includes extensive quotation and analysis of influential
contemporary authors (intelligentsia) who opposed or supported the changes in
thought that resulted in the bourgeois 'betterment.'
Thus the book is full of names of authors and of their books, plays, poems, or
essays. Thus it is mostly about the purveyors of ideas and less about the
individuals who put ideas to work.
Below are links to some related books many of which Dr. McCloskey cites, and
with which she disagrees or agrees. And I have written an attempt at a general
My own conclusion: Yes, I agree fully with the author's concept that the
explosion of economic 'betterment' occurred in Holland after 1650 and was
intensified and expanded in England after 1750 (with some reservations as to
the dates). But I believe this intellectual development was a culmination, not
so much a revolution, of intellectual development from Europe as a whole,
especially Italy. And I believe the Dutch were enabled to have this development
due to their geographic location and the political-military contingencies that
resulted from their happening to be brought into the Hapsburg -
Spanish/Austrian empire as a result of unexpected dynastic marriages. For
instance, the Swiss developed much the same ideas on dignity and liberty, but
did not create a similar economic expansion. A very significant and enabling
process was the Dutch manner by which the bourgeois took control of the
creation of money via their banking system. And then, when the Dutch king
became King William III of England, the English (somewhat reluctantly) created
in the Bank of England a similar new agent for creating the money supply.
So, yes, I agree that ideas are the initial driving force for change, be it
betterment or worse, but ideas must be activated. I can have a hundred ideas
before breakfast, many of them contradictory, but lack the means or opportunty
to put any into practice. The Dutch and then English were specially positioned
to enable them to realize ideas into results. And the master idea they had,
which Dr. McCloskey does not mention, was a new and expanded process for
generating increasing amounts of credit-money under bourgeois control. The
development (conversion - exchange) of ideas (which are assets) into reality
(material and non-material assets) requires a financial mechanism. And they
were able to expand that financial capacity at least as fast as the creation of
new assets by exchange required. Continued belief in the posibility of
'betterment' requires some evidence that it is resulting from the efforts to
Volume I - The Bourgeois Virtues
Volume II - Bourgeois Dignity
Mendenhall, Allen - Review of "Burgeois Equality" in the
Quarterly Journal of Austrian Economics, Vol. 191 No 21 - pgs 214-222 -
Muller, Jerry - The Mind and the Market-
The author provides biographies and analysis of their theories about capitalism
for 16 major intellectuals who were significant commentators on the revolution
that Dr. McCloskey describes. He includes those before and after, and for or
against. In some chapters he devotes more space and analysis to the
contemporary social and cultural environment that he believes shaped the
author's theories. Of great interest is that he reveals a strong correlation
between anti-Jewish and anti-capitalism in these authors. His representative
authors confirm Dr. McCloskey's point that since about 1840's there has been a
strong movement of the intelligentsia to denounce and oppose what they call
Trentmann, Frank- Empire of Things -
The author provides a description of the huge amount of material goods and
services that has resulted from the bourgeois revolution in thought that
created the expansion of economic well- being that Dr. McCloskey describes. One
has to wonder 'which came first' - the changes in beliefs and actions of the
bourgeois that enabled huge increases in physical goods - or that an
observation that such material goods were now accumulating supported the new
beliefs in the possibility of 'betterment' as Dr. McCloskey terms it.
Throughout the first section describing the developments of the 16th -19th
centuries the author also includes analysis that is the same as Dr. McCloskey's
on the role of new ideas and the bourgeois place in them.
Bury, J. B. The Idea of Progress: An Inquiry into its growth and
oritgin A more profound and fundamental shift in European thought thanb
mere 'dignity'. This was an essential part of the new oujtlook which made the
- This is a much broader philosophical study of the concept that underlies Dr.
McCloskey's thesis - In order for the Dutch and English to have the ideas she
notes, dignity and liberty, and relate them to 'betterment' they had the basic
philosophy that progress was possible - a concept that itself was lacking in
Bailyn, Bernard - The New England Merchants in the Seventeenth
- Most of Dr. McCloskey's three books are discussions of economic theory -
controversies with and among many other theorists. This book is all about
actual reality; who, what, when, and how economic activity was conducted year
by year by real people . Much of this reality confirms some of Dr. McCloskey's
theories. But it seems to me that it also shows that the merchant activity -
trade-tested experiment - was well underway in the 17th century, well before
the dates she cites. I always find it remarkable that a historian today can
find such a wealth of personal papers, reports, invoices, actual economic data
from a time and location such as 17th century New England colonies. But it is
all here in great detail. The colonies succeeded through great difficulties due
to the personal risk taking and constant search for innovative new approaches
by individuals whom the author names. We read also about the real role of
credit in a functioning economy and the role of government in promoting
economic activity deemed important to the society.
Cheyney, Edward - The Dawn of a new Era 1250-1453
The author describes in great detail the development of commerce, local and
international trade, banking, towns with statistics. The role and appreciation
of the merchant banker - the bourgeouis was rapidly expanding during the late
13th and throughout the 14th centuries.
Mantoux, Paul - The Industrial Revolution in the Eighteenth
The subject is the gradual development of the factory system in England
Ridley, Matt - The Evolution of Everything: How New Ideas Emerge
The author organizes his material into different categories but under economics
he cites Dr. McCloskey's theories. But his philosophical approach is much
different - as his book title indicates, he ascribes the dramatic change to the
functioning of pure evolution - that is pure materialism. And it is economic
theory based on pure materialism that is her main target.
Polyani, Karl - The Great Transformation
Very influential when published, but less so today. The author did not describe
pre-capitalist medieval and classical civilizations correctly and he completely
misunderstands the role and impact of machines in the modern world. The book is
border line polemics and Dr. McCloskey refutes much of the ideas in it. Yet, in
chapter 58 she gives him too much credit.
Acemoglu, Daron & James Robinson - Why Nations Fail
The authors ascribe economic and social conditions to institutional factors.
They believe the 'betterment' was a result of the overthrow of medieval
institutions. Their main purpose is to claim that progress today would be
achieved by the change of government and social institutions that are deterring
progress. More materialism here. Dr. McCloskey cites them to refute their
Morris , Ian - Why the West Rules - for Now|
An interesting effort to quantify the standard of living of a society from
Neolithic era to the present. He shows the same amazing and immense increase in
living standards in western Europe around 1800 that Dr. McCloskey describes but
without her explanation of causes. This is very strongly not only the
materialistic view but also the result of econometrics - reliances on
statistics and mathematics.
Piketty, Thomas - Capital in the Twenty-First Century
A current great hit with leftists from a French leftist who was educated in the
French establishment mentality. His analysis is much opposed to that of Dr.
Ferguson, Niall - Civilization: The West and the Rest
The author proposes four broad social conditions which he claims set the West
apart and caused it to 'dominate' the world. Dr. McCloskey cites Ferguson and
disagrees with his basically materialistic theories.
Diamond, Jared - Guns, Germs and Steel
The author stresses geographical causation - the difference in geography of the
Eastern and Western Hemispheres. Dr. McCloskey cites him also and agrees with
his geography but disagrees with his causations.
Landes, David - Wealth and Poverty of Nations: Why Some are so Rich
and Some so Poor
Another effort to explain Western 'domination' of the modern world. Again, Dr.
McCloskey cites Landes and disagrees with his theory on causation. This is
another basically materialistic concept.
Landes, David & Joel Mokyr & William Baumol -The Invention
A very valuable multi-authored set of essays describing the role of
entrepreneurs in economies from ancient Mesopotamia to modern times. Market
economies, entrepreneurs, and credit are not new phenomena. This book refutes
Polyani's ideas about ancient economies. Several essays are about the
development ofcommerce, markets, and innovation in Western Europe (and China)
that disagree with Dr. McCloskey on the timing of these events.
Spufford, Peter - Power and Profit: The Merchant in Medieval Europe
A huge study of the actual conditions of commerce in late medieval times based
on both the author's personal visits throughout Europe and his mining of
original sources. I believe he presents a view of a much more advanced economy
in late middle ages Europe. This book refutes Polyani's ideas about medieval
economies. It also indicates that the 'betterment' had a more gradual
development in Western Europe than Dr. McCloskey claims.
Gordon, Robert J. - The Rise and Fall of American Growth -
An immense compendium of data on the origins and developments of all sorts of
technology in the U.S. but flawed by the author's insistence that economic
expansion is ending because every significant technology has already been
invented and employed. But his conclusion is a typical leftist set of
government interventions that he believes may improve the future. Dr. McCloskey
disagrees with his conclusions. She believes that unless government stifles
innovation that there are many more revolutionary ideas to come. George Gilder
and many other authors also stress that the expanding role of 'surprise' in the
information economy will expand living standards even more.
Gordon, John Steele - An Empire of Wealth
Another historical look at the expansion of American living standards, but this
one starts earlier than Robert Gordon's examples. This author includes the role
of financial causes such as credit - in fact he stresses the role of credit.
The first several chapters on colonial and early constituted US are
particularly full of evidence of the role of credit. And the description of the
role of Alexander Hamilton is excellent. This is another compendium of the
material results of economic expansion, but Hamilton's ideas and those of
significant individual inventors and entrepreneurs are stressed. Dr. McCloskey
fequently cites numbers such as 30 times or 100 times to describe the rapid
expansion of British or Dutch economies. Gordon cites similar specific rates of
expansion of specific industries such as cotton and clothing production and
general manufacturing, with the who and when.
Whalen, R. Christopher - Inflated: How Money and Debt Built the
- If the author would substitute 'credit' for 'debt' throughout he would be
explaining something. For instance, on page xix he lists historical
similarities in US financial history - "Cycles of asset and credit booms
and bubbles followed by crashes and busts." Exactly, but why then
continually write about 'debt' rather than 'credit. But he is incoherent when
trying to describe 'value'.
Martin, Felix, Money, The Unauthorized Biography
The author has an excellent appreciation of credit as money, but is nearly
incoherent when he tries to describe 'value'. But he discusses basically the
same monetary development of the U.S. as do Whalen and Gordon. What is
critically missing from Dr. McCloskey's analysis is the role of the bourgeois
in creating the Great Monetary Settlement as Martin terms it, which established
the Bank of England and enabled the bourgeois to create money to finance
Bastiat, Frederic - The Law -
The classic essay by the French economist who tried to stem the development of
socialism in France. Dr. McCloskey cites this famous 19th century author.
Bastiat, Frederic - That Which is Seen and That Which is not
Another classic essay refuting socialist - big government - economic theories.
The author indicates why short term thinking of immediate results can bring
long term failures.
Roche, George C. Frederic Bastiat: A Man Alone
A fine biography of Bastiat that describes his efforts to publicize his
Frankopan, Peter - The Silk Roads
- A new study of the history of trade between China (and Orient) and Western
Europe with emphasis of that passing through the Middle East. Another different
view on the causes of relative power of western Europe and China.
Andrade, Tonio - The Gunpowder Age
Another new study that refutes many myths about the relative economic and
military power of China and Western Europe prior to 1800 or so and describes
what really enabled some Europeans to then gain trade power in China.
McNeill - William - The Rise of the West
A standard world history from 1963 that ignores the causation that Dr.
McCloskey claims. It gives all the typical reasons she disputes. A materialist
Johnson, Paul - Intellectuals
A devastating set of biographies of selected modern intellectuals that Johnson
believes have had extra influence on popular beliefs. All are disreputable
individuals, but I do not think some of them have been very significant. But
several were influential enough to rate comment. And Dr. Johnson's introduction
discussing the broader question of the influence of intellectuals since 1800 or
so is excellent. It describes the kind of individuals who compose Dr.
McCloskey's clerisy. And even more important Dr. Johnson discusses the attitude
and role of the modern intelligentsia. They are different from the
intelligentsia that told people what to think and mostly supported rulers, by
giving them legitimacy. The modern intelligentsia are convinced that they know
best what is good for everyone - just like the ancients, but now they are not
constrained by living in a culture that prescribed the broad limits of
acceptable belief . Now they are not inhibited by any restraints. So it is no
wonder they when they realized they were not establishing the cultural value
system for the bourgeois they 'revolted - that is turned treasonous' as Dr.
Reden, Sitta von - Money in Classical Antiquity
Detailed exploitation of sources by author of this book refutes Polyani and
many other writers about money, banks and credit in classical Greece, Rome and
Egypt. And the full picture Dr. Reden describes also refutes the whole current
establishment view about the nature of credit
Kwartgung, Kwasi - War and Gold: A 500-year history of Empires,
Adventures, and Debt An excellent study. For purposes of relationship to
Dr. McCloskey's books this author's description of the role of money, that is
credit and debt, from 1600 to 1800 is essential. Her descriptions of what took
place during those centuries is missing much important analysis of the
bourgeois participation in this economic activity. The new mode of providing
capital was very much important to the bourgeois success.
Ingham, Geoffrey - Capitalism
Ingham,. Geoffrey - The Nature of Money
In this introduction the author provides some background from the previous two
volumes in the series. Volume One is titled The Bourgeois Virtues: Ethics
for an Age of Commerce (2006) which contends that it was the commercial
bourgeoisie (middle class) of traders, inventors and managers who were
responsible for modern advances. But its content is mostly about the seven
virtues themselves. Volume Two is titled Bourgeois Dignity: Why Economics
Can't Explain the Modern World (2010) in which it is argued that it was and
is not material causes that create material advances but ideas generated by the
Bourgeois who led the way. In this volume the author claims to provide a novel
way of looking at the virtues and at bettering ideas that arose in northwestern
Europe from a novel liberty and dignity enjoyed by all commoners. She writes,
"The upshot since 1800 has been a gigantic improvement for the
poor..." Further, she writes ,"Let me tell you what the trilogy
argues and how each of the three books answers the others. "
Well, her explanation is far too long and detailed for me to present. But she
does note that she is an economist, an historian, and a professor of literature
and philosophy as well.
Her summary is, "The Trilogy chronicles, explains, and defends what made
us rich - the system we have had since 1848, usually but misleadingly called
modern 'capitalism'. The system should rather be called 'technological and
institutional betterment at a frenetic pace, tested by unforced exchange among
all the parties involved'." Or 'Trade-tested progress'.
Indeed, 'Capitalism' is a term invented by Marx and socialists in 19th century
as a pejorative expression to denounce the same activity that Aristotle
denounced in classical Greece, namely using money to make money. But Dr.
McCloskey disagrees with this very concept as the source of 'betterment'.
Rather, she notes, "A crucial point is that the greatly enriched world
cannot be explained in any deep way by the accumulation of capital, as
economists from Adam Smith through Karl Marx to Thomas Piketty have on the
contrary believed, and as the very word 'capitalism' seems to imply."
"Our riches did not come from piling brick on brick.... but from piling
idea on idea."
She continues, "The modern world was not caused by 'capitalism' which is
ancient and ubiquitous...." And, "Since capital readily accumulates
in response to a genuinely bettering idea, and is not therefore the initiating
While I strongly agree with the author on the central importance of ideas, I
disagree with these two ideas - that capital was ancient and that it readily
accumulates. Of course wealth was ancient and did accumulate into certain
hands, but wealth is not 'capital'. What generated 'capital' was not
accumulating assets and then their either being consumed by others or stored in
royal or state treasuries. The wealth extorted from its 'allies' by ancient
Athens and then used to build the Parthenon and store more in it was not
'capital'. Nor was the gold in Persian palaces or the building of medieval
castles and cathedrals. The new idea, and it was newly developed by medieval
monks, Carthusians mainly, was the idea that if one retained earnings from the
surplus of immediate real production with the Purpose of employing it to
generate additional surplus production in future, one could benefit not only
oneself but society in general. But this was the surplus from voluntary
Production, not from money lending or from confiscation and violence.
But I agree with Dr. McCloskey that for this idea to be realized one had to
live in a society in which it was possible to have and retain earnings (without
their being confiscated nor the act of such use being disdained and denounced).
It had to be based on the assurance that if one expended the effort to produce
more than he could consume (meaning the desire NOT to consume all that he
produced) and could benefit others by thereby continuing to expand production
this would benefit everyone - result in the 'betterment' she stresses.
Moreover, such added production generated from the saved prior production had
to find a market for exchange. Individuals capable of producing more than their
own local consumption but not finding a market in which to exchange that
production would rather simply quit and enjoy life. Moreover, the major
component of the early bourgeois were not even producers but middlemen
-merchants, moneylenders -
Thus I agree with her stress on the idea that the bourgeois came to have
dignity and that their activities were ethical and fulfilled the accepted
For example, once the Russian peasants found that any food they produced beyond
their own use would be confiscated by the Soviet government they promptly quit
producing a surplus. But the result was that the Soviet government then took
everything the peasants did have and let them starve.
She actually promotes the same idea I write above in her later section.
"The original and sustaining causes of the modern world, in other words,
were ethical, not material. They were the widening adoption of two mere ideas,
the new and liberal economic idea of liberty for ordinary people and the new
and democratic social idea of dignity for them...."
Yes indeed. Living in this new conceptual environment was essential. But that
was not sufficient. These people also had to recognize and employ the concept I
mention of obtaining and employing the 'retained earnings' from their
production for the planned purpose of using it to expand future production to
benefit society. For instance, read Watt's and Boulton's purposes for
extraordinary efforts. (Described by Trentmann) And Stark's exposition of the
thoughts of Carthusians.
Dr. McCloskey again on this volume, "This final volume then, Bourgeois
Equality, asks why such ideas about bourgeois betterment shifted so
dramatically in northwestern Europe, and for a while only there." Her
answer, "The cause of the bourgeois, that is, was an economic liberation
and a sociological dignifying of, say, a barber and wig-maker of Bolton, son of
a tailor, messing about with spinning machines, who died in 1792 as Sir Richard
Arkwright, possessed of one of the largest bourgeois fortunes in England."
Part I - The First Question: What is to be Explained? - A Great
Enrichment Happened, and Will Happen
Chapter 1 - The World is Pretty Rich, but Once Was Poor
Dr. McCloskey launches her thesis with a description comparing the 'pretty
good' condition of the great majority of the world population today and
increasing position of the rest with everyone's condition in 1800.
She writes, "Until 1800, though, such a hell was what everyone except a
handful of nobles and priests and merchants expected, year after terrible
Well, 1500 perhaps but not 1800. She exaggerates the timing, as she, herself,
shows when, later in the book, she expands her view of history. And it is an
opposite wrong to include priests in the wealthy group - bishops maybe, but not
most priests or clergy who were living at a similar level to their
parishioners. She expands her theory by citing the 'world' average, then and
OK, in 1800 a world average would include Africans, Native populations in the
America's and Asian peasants which would bring an 'average' down, but western
Europeans by then were living above the $3 a day she counts as the base.
However, her basic point is valid. The 'Great Enrichment' has expanded all
aspects of even the poorer segments of humanity by factors of 30 to 100 - not
30% or 100% but factors, that is times. She notes, "We humans now produce
and consumer seventy - 7 times 10 - more goods and services worldwide than in
1800." Along with this huge expansion the activities of people have
changed. She notes, "Two centuries ago fully four out of five U.S. adults
worked to grow food for their families and for the remaining nonagricultural
fifth. now a single American farmer feeds three hundred people." Health,
life expectancy and literacy have expanded as well.
All this seems obvious to most people, but, as Dr. McCloskey, shows in
following chapters and the other volumes, while being unable to deny the
obvious, so many of the intelligentsia manage to denounce this reality on one
grounds or another - and especially to deny its real causation. Her mission is
to set this record straight. She feels obliged to use many pages in describing
Chapter 2 - For Malthusian and Other Reasons, Very Poor
Dr. McCloskey gives us a somewhat different view of Reverend Malthus's motives.
She writes, "Malthus undertook to explain for the first time why the
enrichment of the poor had not happened by then, and why, according to the
logic of the newly invented and previously optimistic political economy, even a
modest enrichment would not happen ever".... due to expanding population
growth. He was trying to discount the optimism of the Enlightenment
revolutionaries. The limited potential for growing food would always limit the
She explains. In times before Malthus his theory of the relationship between
rate of population growth and rate of increased food supply had been true.
Andclassical economists from David Ricardo to Karl Marx accepted Malthus. Plus,
Malthus was the inspiration for Darwin's theory of natural selection - in the
Malthusian world survival would go to the fittest. In addition to disease, the
vulnerability of farm agriculture to violent confiscation also kept the
potential population size in check.
Chapter 3 - Then Many of Us Shot Up the Blade of a Hockey Stick
This 'hockey stock' metaphor is rather popular as a graphical depiction of
change over time. It shows on an x by Y axis graph change for centuries
straight along the low x axis and then a sudden 90% change to rise up the Y
axis. It has become widespread in public discourse for its use by 'global
warming' folks who claim it shows hugely increased climate warming relatively
recently. But it is better used by Ian Morris on pages 161, 166, 558, 492, 583
in his mathematical models of social development in his Why the West Rules - for Now.
Dr. McCloskey uses the 'hockey stick' to depict the dramatic change in
'betterment' after 1800 or 1900. It is "the most important secular event
since we first domesticated squash and chickens and wheat and horses."
Unfortunately misguided economists today claim (or blame) this change on
various materialistic causes. She, however, writes, "The real engine was
the expanding ideology of liberty and dignity that inspired the proliferating
schemes of betterment by and for the common people." "The ideology
supporting the Bourgeois Deal displaced that of the Aristocratic Deal."
She mixes examples of the real 'betterment' with examples of the disparagement
or denunciation of it by intelligentsia philosophers from Matthew Arnold (see Muller) to Geoffrey Harcourt.
Chapter 4 - As Your Own Life Shows
As if we need examples of what we see and know, the author provides long lists
of these. And she notes that all this did not come about due to intervention by
governments or trade unions. By way of evidence she cites the living standard
of colonists at Plymouth Plantation in 1620. No doubt she is right to note,
"Yet by 2011 the average resident of the United States consumed, corrected
for inflation, $132 a day, sixty-six times more housing, food, education,
furniture than in 1620 - a betterment of 6,500 percent." Yes, but not that
great of American colonists by 1750 nor 1800 as Trentmann shows with extensive
inventories of farmers by that time. But, still, she notes, the intelligentsia
today, at least its most prolific authors continue to denounce this change.
Chapter 5 - The Poor Were Made Much Better Off
In this chapter the author focuses on the real impact of the 'betterment' on
the poor, a particular feature that so many of the intelligentsia deny. She
does credit Joseph Schumpeter with recognizing that the capitalist process
'progressively raises the standard of life of the masses.". And so does
Donald Boudreaux, (whose classes in economics at George Mason University I
regularly wish should be required for every new member of Congress.) Again,
although it does not convince the leftist progressives, she provides ample
specific examples from the real world. Among these are of course the Keynesians
such as Robert Reich.
Chapter 6 - Inequality Is Not the Problem
Here we read more of Robert Reich's Keynesian mistakes.
A digression here. Interestingly, she uses as an example of aristocratic
British attitude toward inequality conversation from Anthony Trollope's
Phineas Finn. This and other of Trollope's novels were combined into a
super BBC production titled "Palliser's" available on DVD and indeed
a landmark in depiction of Victorian English society. Better than Donton Abbey.
She continues with examination of the left progressives' attacks on
'inequality' by use of all sorts of devices. Thomas Piketty's Capital in the Twenty-First Century is a
good example. Although there are many others, she focuses on showing Piketty
wrong. One of Piketty's main concerns (complaints) is the problem he presumes
of inherited wealth expanding inequality.
(But in Forbes magazine's annual listing of the 400 wealthiest Americans very
few have significant parts of their wealth from inheritance - and in Forbes'
world-wide listing none had it. In another listing of current wealthy families
only one -Dupont - went back generations and Rockefellers already have
dissipated John D's' greatest of all fortunes into a very large number of small
Chapter 7 - Despite Doubts From the Left
The author notes that the progressive left applauds each (there have been some
40- since 1785) as the end of nasty capitalism. Yet the real wages, income, and
living standard of the working class has increased after each (for many within
2 years.) She quotes the leftist historian, Eric Hobsbawn, in his attack on
pursuit of profit with its depletion of global resources. He is typically
anti-growth as were Marx and Engels and many others today. Walter Reuther and
Robert Reich suffer from the 'productionist' fallacy. A current example fallacy
is concern about the development of robots. Dr. McCloskey notes that
automobiles, blast furnaces, spinning jenny and virtually all tools are in a
way robots in that they make production less expensive and less tedious.
Here is a major point. She writes, "After all, the point of an economy is
production for consumption, not protection of existing jobs using old tools,
horses, candles, hand controlled drill presses."
My view - consumption comes from production and wealth comes from retention of
as much of the results of production as possible after necessary consumption
(retained earnings). And future expansion of consumption requires that this
retained earning from production (wealth) be re-invested in the added
production of that consumption.
Chapter 8 - Or from the Right and Middle
Dr. McCloskey takes up a series of different current issues. She notes that
some 'right' side economists (I always question just how conservative some
identified 'right' authors are) also believe that progress is at least slowing
- stagnating - and that means betterment is slowing. She doubts this and so do
I. (Unless the progressives do manage to use government power to slow it.) For
those who denounce inequality as a fundamental social 'sin' it has always been
easier to reduce the level of the upper strata than increase the level of the
lower strata via government mandate and coercion. A favorite issue is the
replacement of 'jobs' by robots. Even Tyler Cowen, she writes, in his book
Average is Over, proposes this idea.
I like this remark, "Something is driving intelligent economists out of
their economic minds.'
She then gives a mini-seminar on the 'rule of 72". Indeed a key concept
for investors and savers. Simply, divide 72 by the rate of return, profit, or
interest, and the answer is the number of years in which the principle being
measured will double. Conversely, divide 72 by the number of years you select
and you find the interest rate at which the principal must be invested to
double. So at a steady growth rate of 6% a year 100 will be 200 in 12 years,
400 in 24 years, 800 in 36 years and 1600 in 48 years (half a century). This is
the kind of growth the author is describing in here first chapters.
New subject: The current controversy over 'environment' Again, the controversy
enlists economists in support of varied political agendas. It is argued over
pollution, climate change, resource depletion, genetic adversity and the like.
Chapter 9 - The Great International Divergence Can Be Overcome
In this chapter the author shows that in the real world the relative equality
level of the 'poor' already is rising except in specific locations (countries)
ruled by despots of various types.
Part II - The Second Question: Why not the Conventional Explanations?
Explanations From the Left and Right Have Proven False
Chapter 10 - The Divergence Was Not Caused by Imperialism
In this chapter Dr. McCloskey takes on each of the several explanations claimed
by political economists of left and right persuasion to show they are false -
starting in this chapter with the infamous theory of imperialism (such as
Lenin's Imperialism the highest Stage of Capitalism).
This theory has several threads - that Europe and England benefited by using
slaves in West Indies - that Europeans benefited from exploitation of people in
Africa - that Britain made profits by exporting surplus to India and colonies -
that Europeans benefited from colonial warfare and similar ideas.
She is particularly dismissive of Niall Ferguson's view of imperialism as a factor
in the 'betterment' of Great Britain and the West in general. In his book
(listed above) he comes up with several 'killer apps', to use popular jargon,
which set the West apart - such as better science, better competition, better
property rights, consumer society and European work ethic. She denies all of
these except that the political competition between European states did spur
innovation and progress. But it also resulted in wars which depleted or
misallocated resources. She particularly disputes Ferguson's claim that Europe
'dominated' the world for 500 years; no, it lasted 100 years at most. She also
disagrees with Jared Diamond, another proponent of the 'domination' concept.
She notes he has it backward - domination did not cause power, but power
enabled domination. Then she mentions David Landes, Charles Kindelberger, Samuel Huntington,
Ian Morris and Paul Kennedy as other purveyors of
this 'domination' theory.
Her summary comment on all this is: "Mixing up political domination with
economic enrichment has been an analytic mistake from the Hobson-Luxemburg left
around 1900 to the Landes-Ferguson right around 2000." And. "The
usual accounting of imperialism, in other words, is gravely mistaken." One
of her purposes is to show that the 'betterment' amazing economic expansion and
improvement of living standards IN Europe, especially Holland and Great
Britain, was an Internal process. Enrichment and advancement came first, empire
Again, "In other words, ideas for new machines and institutions inspired
by an ethic of liberty and dignity for commoners, not the exploiting of empire
or the building of military power, made Europeans rich." Moreover,
empires, she notes, seldom yield much loot and that was mostly temporary. In
this she takes on the leftist apologists who claim that European prosperity
rested on Spanish looting of silver from Mexico and Peru.
From this discussion she switches to a broader one about the role of new ideas
- innovation - to accumulating of 'capital'. Here Jack Goldstone, Margaret
Jacobs, George Gilder, Matt Ridley and Joel Mokyr receive high marks. Her 'key'
is the 'trading test' - this is that the innovation - new idea - must be
realized into actual production and that this product then must be exchangeable
to others - consumers or other producers - at a profit. Comes now the French
term, 'entrepreneur' by Richard Cantillon in 1734. That is, one who first
conceives of the new idea and is courageous enough to risk himself and his
sustenance on producing it. (See Enterprise
for definition and discussion of the history of entrepreneurship) She rightly
denies Marxian Immanuel Wallerstein's concept that capitalism comes from
capital. "No, it would not." Both the left and right wing
commentators are wrong.
Acemoglu and Robinson come in for being
mistaken. They think the term 'industrial revolution', which they use, came
from later authors, but it came from Arnold Toynbee in 1884, who depended on
the Communist Manifesto, and got all his descriptions of this phenomena
Dr. McCloskey renders a typical assessment, "In other words, Acemoglu and
Robinson are accepting an erroneous leftish story of economic history proposed
in 1848 or 1882 by brilliant amateurs, before the professionalization of
scientific history, then repeated by Fabians at the hopeful height of the
socialist idea, and then elaborated by a generation of (admittedly first rate)
Marxian historians, before thoroughgoing socialism had been tried and had
failed, and before much of the scientific work had been done about the actual
history - before it was realized, for instance, that other industrial
revolutions occurred in say, Islamic Spain, or Song China, as Jack Goldstone
argued in 2002."
Chapter 11 - Poverty Cannot Be Overcome from the Left by Overthrowing
Dr. McCloskey advocated dropping this pejorative term' capitalism' as it does
not describe reality anyway. She prefers the more accurately descriptive term,
"trade-tested betterment" or simply 'improvement' or
betterment". What needs to be described to be understood is the concept
"frenetic bettering of machines and procedures and institutions after
1800, supported by a startling change in the ethical evaluation of the
betterings." She notes that Max Weber and Fernand
Braudel use this concept. "Modern
capitalism" might do as well.
Acemoglu and Robinson come in again as examples of recent authors relying on
outdated mistaken history books - Paul Mantoux's history of the Industrial
Revolution published in 1906 (but reprinted in 1961).
From these examples she comments, "We need, in other words, to contradict
the usual anticapitalist fables." A more recent example is willful
misunderstanding of Milton Friedman.
Chapter 12 - "Accumulate, Accumulate" is Not What Happened in
Dr. McCloskey repeats her point that accumulation - including accumulation of
tools, was practiced by humans from the very beginning - by homo
erectus. Her point is that, "Accumulated capital becomes unusually,
non-routinely, profitable only if it embodies betterment innovism." But
Trentmann shows that a huge increase in the
accumulation of physical assets did begin between 1500 and 1800.
My own point is that this 'betterment' is achieved by the conscious retention
of part of the capital being used for production of the current generation of
produce with the purpose of employing it to expand production of the next
generation of products. ('retained earnings' of the producer, not 'savings' of
the consumer) And that this objective is only considered when the producer
believes the extra production so created can be exchanged for a profit. She
believes that Keynes thought such further 'betterment' could not be achieved.
Robert Gordon and others believe that today.
What can accumulate is knowledge. Although it also must be retained and renewed
else it will be forgotten. The author again notes that what accumulated in
Holland and Britain was new knowledge built on previous knowledge and then
tested in trade to prove its contribution to betterment.
She sums this, "Therefore I suggest 'the age of betterment' or a similar
phrase to describe the modern world, not ' the age of capitalism.' There is
nothing automatic about growth of capital in 'capitalism' though since 1776 and
especially since 1848 many people have believed there is." Seems to me
there is confusion between 'capital' as finance and 'capital' as physical
assets used in production.
Chapter 13 - But Neither Can Poverty Be Overcome from the Right by
In this chapter Dr. McCloskey 'shoots down' the theory of the origin of
'property rights' and the role of such rights in relation to the great
'betterment'. Economists search for causes of the 'Great Enrichment' whose
existence they cannot deny. One such is 'institutions'. Some claim the Great
Enrichment was caused by strong property rights in Holland and England. But the
author points out that property rights have been a central feature of society
from the beginning. (With allowance for what was considered property).
Chapter 14 - Because Ethics Matters, and Changes, More
Here the author takes Oliver Williamson, a Samuelsonian economist, to task for
his concepts about ethics and relation to economics. He claims among other
things that ethics change closely, to which she responds that there is no
historical or experimental evidence of this idea. Her point is that in the 18th
century British concepts of ethics related to trade and betterment changed very
rapidly- what has been dishonored became honored and this happened instead of
any change in the institutional environment. Specifically, she adds, "The
institutions, such as criminal, contract, property and corporate law, changed
after the ethical change, not before."
There are quite a few equations in this chapter, but they are purely to appeal
to fellow economists and can be skipped. The discussion veers into neuro
science and language.
Chapter 15 - And the Oomph of Institutional Change Is Far To Small
The author states that the 'oomph', that is the contribution to expansion, that
did or could have contributed to the dramatic and sudden change was too small.
Besides similar institutions existed in previous centuries and other places.
She writes, "The cause had to be, on the contrary, something highly
peculiar (for a while) to northwestern Europe, not a rearrangement of the old
things prevalent in most civilization, such as private property, rule of law,
literacy, cheap exchange, or predictable investment." The remainder of the
chapter discounts the favorite economists' concept of maximum utility. And Dr.
McCloskey also disputes the idea of government contribution and Keynesian
Chapter 16 - Most Governmental Institutions Make Us Poorer
In this chapter Dr. McCloskey continues to show the fallacy of government
intervention. Government 'regulations' inhibit, do not assist, economic
expansion. She refers to the great French economist Frederic Bastiat, whose
essay on 'that which is seen and unseen' concisely reveals the great fallacy or
short term versus long term thinking. He was also the originator of the 'broken
glass' metaphor and early refutation of the popular idea that government
intervention was positive. She writes, "Honest governments are rare' and
shows examples. She also cites the renowned economist, Murray Rothbard. And
then, this from the historian Robert Higgs, "Government as we have known
it for the past few thousand years (is) a monopoly operating ultimately by
threat or actual use of violence, making rules for and extracting tribute from
the residents of the territory it controls.'
Part III - The Third Question; What Then Explains the Enrichment? -
Bourgeois Life had Been Rhetorically Revalued in Britain at the Onset of the
Having demolished many typical 'progressive' theories about the undeniable
'betterment' she turns to a positive voice to provide the real answers.
Chapter 17 - It is a Truth Universally Acknowledged That Even Dr.
Johnson and Jane Austen exhibit the Revaluation
Of special interest to me is Dr. McCloskey's repeated discussion of Jane
Austen's novels and family letters as examples of one early 19th century
author's views on ethics and virtues, because Austen is one of my favorite
authors. Dr. McCloskey draws many conclusions. In addition to its relevance to
this book, her discussion is an excellent example of literary analysis. But she
reveals her qualifications as an expert in world literature, history and
philosophy rarely found in an expert economist through out the three volumes.
So this chapter and section ask the question "Why then? Why did the world
become dramatically richer in the two centuries after 1800?" In answer she
refers to the story told in volumes I and II. These revealed that the answer is
that there was a significant change in rhetoric - that this produced the
concepts of bourgeois dignity and liberty. Now she intends to provide the
historical record showing the change For this she turns in large measure to
literary analysis of contemporary thought. She begins with Dr. Johnson and Jane
She writes: "Consider at greater length a harder case. It tests the
hypothesis of a change in attitude toward the dignity of money and money making
with another example that one would suppose leans against the hypothesis."
Chapter 18 - No Woman but a Blockhead Wrote for Anything but Money
A quotation from Johnson. And Jane Austen is a typical example of an author
proud to be making money from authoring popular novels. And she was a bourgeois
in sentiment if not in actual class standing, being gentry instead. Two of her
brothers were British admirals. But "she provides nonetheless a model for
good bourgeoisies." The chapter is a lengthy model of literary critique.
Chapter 19 - Adam Smith Exhibits Bourgeois Theory at Its Ethical Best
Now the author turns to the principal primary source, Adam Smith. "Another
and more conventional exemplar of the Bourgeois Revaluation is the Scottish
professor of moral philosophy Adam Smith (1723 - 1790). He is grossly
misunderstood by most economists, and by the Wall Street men sporting Adam
This is because they not only misread The Wealth of Nations, but also
because they ignore The Theory of Moral Sentiments. The chapter is an
extended analysis of what Smith actually believed and meant. It deserves
analysis of similar length.
Chapter 20 - Smith Was Not a Mr. Max U, but Rather the Last of the
Former Virtue Ethicists
Dr. McCloskey continues her analysis of the true thought of Adam Smith.
"Smith, in other words, was mainly an ethical philosopher directing his
discussion of morality to readers placed in the middle station of life."
But he was misunderstood and misquoted. One significant reason, she notes, is
because his writing appeared during the British horror of the French
Revolution. Thus his thought on ethical virtues was reduced to prudence alone.
"But another reason the economists claim was accepted for so long, against
decisive textual and biographical evidence, is that Smith practiced what for a
long time after him was considered an obsolete sort of ethical philosophy
'virtue ethics'. Thus virtue ethics 'evaporated' from academic circles Only
prudence remained. And this, then, was expanded upon by Ricardo, Marx, and
Bentham. She cites several other threads to today's philosophy.
She continues, "After Bentham, however, and especially after the
anti-ethical turn in twentieth-century economics associated with Pigou,
Robbins, Samuelson, and Friedman, most economists have interpreted Smith's
praise of the virtue of prudence to mean what the economists meant by virtue,
that is you do un-controversial good only by doing well."
"The turn in economics toward prudence only was renamed in the 1930's the
'new welfare economics'...." This means stress on maximizing utility. The
rest of the chapter contains the author's description of the contrast between
what Smith actually believed and what is claimed for it in support of today's
economic theory. She again prints the full page graphic that depicts the places
of all seven of the primary virtues and their interactions and exemplars.
Chapter 21 - That Is, He Was No Reductionist, Economistic or Otherwise
Analysis of Smith continues. Dr. McCloskey explains, "Narrowing the theory
of ethics down to merely one of the seven virtues - the modern economist
specializing in selfish prudence, for example, the modern theologian in
transcendent love - does not do the ethical job." Smith specifically wrote
that prudence and 'self love' were detrimental. But so is a current effort to
create lists of as many as 613 'virtues'. Hume, Locke, Bentham, Kant, Vico,
Hobbs and others all come in for critical investigation for their views on
ethics. (Read White )
Chapter 22 - And He Formulated the Bourgeois Deal
Smith again, specifically for his influence on bourgeois industry. "Smith
and the rest of the more optimistic of the economists 1700 -1848 were busy
providing a theory of innocent contributions to the well-being of the world
arising from the genius of the natural merchant." The author continues to
bring Smith's theories up to date now in comparisons with current economists.
Chapter 23 - Ben Franklin Was Bourgeois, and He Embodied Betterment
Dr. McCloskey discusses Benjamin Franklin as an example of the new bourgeois
who both lived and expressed the bourgeois concept. She notes that Adam Smith
would approve. The chapter builds on this to include Franklin's thought on the
virtues (included and excluded) and also on more widely spread theorizing that
was developing at the time.
Chapter 24 - By 1848 a Bourgeois ideology had Wholly Triumphed
The author claims that the increased acceptance of the bourgeois ideas about
dignity and liberty had resulted in the real, dramatic expansion of
'betterment' in the material world through market- tested exchange and
innovation by mid 19th century. She gives examples from both literature and
statistics on production. Of the former, she turns again to Trollop.
She also mentions David Hackett Fischer with a footnote citation, but the
source is not included in her bibliography - hopefully it is to his important
The Great Wave.
She writes, "The middle class was elevated to the degree that even royals,
such as George III, believed so." The notion of 'gentleman' expanded. And
"Around 1700 the rhetoric began slowly to change in earnest - and
'earnest' is the word. Further, "By the end, by 1848, famously, in Holland
and England and America and their imitators in northwestern Europe, a busy
businessperson was routinely said to be good, and good for us, except by the
angry and as yet tiny antibetterment clerisy, gathering especially in France
Here she properly modifies what appeared in her previous books and chapters -
namely a stress that all this rather suddenly sprang to life after around 1750
and into full bloom in 1800. She writes a critical passage here. "The new
form of betterment, dating from its precursors in the northern Italian city
states around 1300 to the first modern bourgeois society on a large scale in
Holland around 1600 to a pro-bourgeois ethical and political rhetoric in
Britain and its North American offshoots around 1776 to a world-making rhetoric
around 1848, grew for the first time in history at the level of big states and
empires to be acceptable, even honorable, even virtuous."
Excellent, this gives credit to the longer strains of the process that are
evident in the late medieval history of Italy and northern Europe. See, for
More follows. She demonstrates how actual business practice 'in the realms of
exchange' followed the rhetoric. She insists that honesty was and is essential
for success in business and that trade "promotes virtue not vice."
She writes, "You can see the bourgeois virtues by contrast with the
aristocratic or Christian ones.' Here she inserts a table with three columns -
Aristocratic/patrician - peasant/plebeian - and bourgeois/mercantile. Clearly
the Christian virtues are those of the peasant. It is indeed revealing.
Then she inserts an interesting take on Donald Trump, noting that for all his
faults of personality he is not a 'thief' and all his 'deals' are voluntary.
"Even a Trump in other words, does good by doing well."
"And even from a strictly individual point of view the bourgeois virtues,
though not those of Achilles or Jesus, are not ethical zeros." She writes
that by then what was changing was 'not actual behavior but the opinion the
rest of the society had of it.' It was an ideological change.
Part IV - A Pro-Bourgeois Rhetoric Was Forming in England Around 1700
Chapter 25 - The Word "Honest" shows the Changing Attitude
toward the Aristocracy and the Bourgeoisie
Having made the assertion with perhaps only a small sample of proof, she again
feels it necessary to elaborate. She states the 'scientific question' -
"How do You Know?" This brings up a major problem, which she
acknowledges. Her sources are mostly literary and then also frequently second
or third hand authors with a few primary (eye witness ) writers whose accounts
also may be biased. Likewise, her historians, some primary witnesses but many
later writers often dependent on misunderstandings of the eras about which they
write. The problems include even the languages - the meanings of words change
and are often not even descriptive of the same concept when in different
languages. She devotes significant attention to such terms as 'honest',
'honesty', 'truth', 'belief', and 'religion'.
For example, she writes, (as usual citing other experts) 'Waterman has argued
that in the 1820's the economist and soon-to-be archbishop Richard Whately was
working to bring orthodox Anglicanism and economics back together after their
separation by Benthamite radicals. Whately declared in 1828 (As St. Augustine
had also declared) that 'the Bible...was not designed to teach men astronomy,
or geology, or, it must be added political economy, but religion."
And such ideas continue to the present.
So 'honest' also has many meanings. And, "Thus English and the
commerce-drenched Romance languages from 1600 to the present embody the shift
from 'honor' meaning 'aristocratic' to merely bourgeois 'reliable."
Chapter 26 - And So Does the Word "Eerlijk"
What is this about? Well, Dr. McCloskey wants to show that a similar change in
meaning came at that time also in the Germanic languages even though their
linguistic base was entirely different so 'honor' and 'honesty' stem from 'eer'
in Dutch and then 'eerlihk'. But the transition was the same - from an
aristocratic concept to the bourgeois concept. More citations to Dutch and
Germanic literature follow.
She is a wonderful writer, to wit. "If you can stand any more of this sort
of evidence, consider that translations of the New Testament register the
change, too, through unevenly." Well, much, indeed, more linguistic
evidence follows. But this, we must expect, from an economist who is also a
linguist, philosopher and historian, not to mention a social critic.
Another aside to her economist 'friends'. "We are just begining in
economic history to take seriously ideas and their trace in language. But
economists and economic historians, recovering from the age of materialism,
1890-1980, have had a hard time of it."
Chapter 27 - Defoe, Addison, and Steele Show It, Too
Yes, we receive more literary analysis of Defoe and Addison, but of Austen as
well and of the entire genre called in English the 'novel' but in French the
Chapter 28 - The Bourgeois Revaluation Becomes a Common-place, as in
The London Merchant
Back to the beginning. "The Bourgeois Revaluation begins slowly, against
resistance." "The cultural task was to bring the bourgeoisie out into
the daylight of honor." And, she notes, it is also her task but is not yet
finished. Here we learn more about other purveyors of thought such as Addison
and Stone. She cites many literary sources to show both that the establishment
continued to 'sneer' at the pretensions of the bourgeois and that it was
nevertheless gaining recognition. This was a time that a new class was defined
as 'squirearchy' below the aristocracy but above the lower middle class.
Chapter 29 - Bourgeois Europe, for Example, Loved Measurement
Dr. McCloskey cites Werner Sombart whom, she notes, observed that "not
only was Holland the model for all middle-class virtues, but for exact
calculation also." Sombart is one of the influential economic historians
discussed in Muller's book.
She elaborates, "Public calculation is characteristic of the bourgeois
world, such as the political arithmeticians of the seventeenth century, first
in Holland and then in England and then in France." "The coming of
bourgeois statistics altered the rhetoric of politics." These calculations
about numbers and size of foreign trade became a basis for mercantile political
action. She notes Bastiat's opinion. And quotes extensively from pamphlets of
the early 1700's that lobbied for various political policies.
But, she avers, popularity of calculation does not signify rationality.,
neither then nor today.
Chapter 30 - The Change Was in Social Habits of the Lip, Not in
By this typical bit of humor she means again rhetoric. What was everyone
thinking about as evidenced in what they were talking and writing about. This
calls forth yet more literary analysis with its inherent problem - does what is
written accurately mirror what is actually taking place?
She plows on, "What changed 1600-1848, and dramatically, as we can learn
from the techniques of humanistic science, was the high- and low - cultural
attitude toward trade, numbers, betterment, and the bourgeoisie."
Moreover, "It was not the induced thriftiness in the industrial
businessperson that mattered (contrary again to Marx and Weber), but the
admiration, or at any rate toleration, by the rest of the society for a
bourgeois life of creating economic value." Weber comes in again for much
friendly correction and less for Simmel (another influential author discussed
Here is another terrific insight. "Humans have always thought in terms of
money. There was no such thing as 'monetization' another of the myths of
pioneering German scholars inspired by Romance, because societies always have
money, whether or not they have coinage."
But how difficult it is still today to convince educated people of this simple
fact. (See Tamny).
Chapter 31 - And the Change Was Specifically British
Dr. McCloskey's thought here is about more than specifically the British. Again
referring to Joel Mokyr, she expounds on a critical concept. He mentioned that
the "Enlightenment was obsessed with useful information." She
expands that notion to point out that what measures 'useful' in the markets is
its trade-determined price. The central importance of price is right out of
Hayek and von Mises. It includes the fact that a socialist regime cannot use
prices to determine value or how to rationally set production priorities. Her
comment gets to this point, "The trade test, in which prices are
negotiated, is the essential other half of the revolution of profane
betterment."... "The labor theory of value or any other essentialism
in attributing profane value, is mistaken." 'Value is determined by the
money value that people are willing to put on goods."
My expression for this is that the 'value' of any good or service is not and
cannot be based on what the desire to have it by the individual who posses it
believes, but is based on the relative desire of everyone else in the market
may have for it in comparison with all other goods and services that are
available at that time and place.
The author continues, "Being obsessed with useful information giving power
over nature, as Mokyr puts it, was not new in the eighteenth century, not
precisely. What changed was what was deemed useful." In other words it was
a change in ideas, ideas about what the relative desirability of specific goods
and services were to the newly being empowered bourgeois. They had different
ideas about what was for them useful knowledge than had their ancestors in
medieval times. She gives some specific examples. Specifically, one major
change was in the relative value assigned for goods of this world versus those
of the 'next', including happiness. The chapter title refers to the author's
selection of important examples from British experience. In keeping with her
theme, she mentions this, "the English, surprisingly, were busy
transforming themselves away from admirers of the gentry and aristocracy and
into admirers of the bourgeoisie. Initially these led to the political support
for economic mercantilism.
This process began with the Dutch and their success was noted by their
competitors, the English. Dr. McCloskey summarizes "Why Britain? For one
thing, the change in British rhetoric about the economy came out of the
irritating successes of the Dutch. The successes of the Dutch Republic were
startling to Europe."... and more.
Part V - Yet England Had Recently Lagged in Bourgeois Ideology,
Compared with the Netherlands
Chapter 32 - Bourgeois Shakespeare Disdained Trade and the Bourgeoisie
This reader was long ago convinced, but apparently the author believes further
proof is necessary. Hence, more appeal to Shakespeare as an example. Having
established the results in the previous chapter, here the author jumps back to
show that the British had to push themselves into this change. To show this she
describes conditions in medieval England - namely that they were a society of
laws and had full property rights - this to counter the theories of North and
Acemoglu that was acquisition of these
'institutions' that was the cause of change.
She points out, "A society can be individualistic in a thorough way but
still honor only noblemen, not letting ordinary people have a go....". as
usual she provides such concepts from Thomas More, Sir David Lindsay and
And she also gives examples from society today about prejudice against business
that is impeding economic expansion. She concludes, "The central error of
comprehensive socialism or the regulatory impulse is to suppose that betterment
does not need to be tested by trade that no discoveries are to be made by
performing cash tests on millions of individual and idiosyncratic people about
what they value, that we already know everything we need to know to satisfy and
protest the consumers.".
Another comment worth the price of the book and more.
Chapter 33 - As Did Elizabethan England Generally
In this chapter we learn about other 'recalcitrant' English -
Dr. McCloskey begins with , "it is not merely by Shakespeare that a modern
bourgeois and his trading activities were disdained in soon-to-be-bourgeois
accepting England." No indeed, Christopher Marlowe, and Thomas Dekker, are
quickly fingered. Again that obsolescent 'Great Chain of Being' is scorned. As
the author comments, "That is, the honoring of hierarchy by Dekker, and by
Shakespeare and Marlowe, is nothing like 'bourgeois' in the disruptive sense
that Marx and Schumpeter understood it." Heavens, the Great Chain itself
is honored by Dekker. The author's literary critic side comes forth with quite
a few pages of detailed analysis of the sample plays. And these pre-bourgeois
plays are contrasted with other from a 100 or years later.
Chapter 34 - Aristocratic England for Example, Scorned Measurement
This is another chapter designed to set a limit, historically, to show that the
coming bourgeois virtues developed in Holland and imported into England were
NOT in existence prior to 1600 or so. The example here is the attitude toward
measurement, counting. We learn, "One countable piece of evidence that
bourgeois values were scorned in England until the early eighteenth century is
the unfashionability in the time of Shakespeare or Dekker of reasoning by
count. "Again, Shakespeare provides examples of disdain for using specific
numbers or counting. Meanwhile at that time China was way ahead in this
respect. But the author has to agree that counting and measurement were already
widely used by that time in Italy. We read next, "Numerancy, then , was
always advanced among the bourgeois, who had to calculate to live. The Dutch, I
repeat, led the way (what about Italians?) and ordinary Dutch folk around 1600
thought quantitatively." But the English caught up by mid 18th century.
She does not mention the Italian recognition of perspective in painting which
certainly required numerancy not to mention the methods for constructing the
Duomo in Florence. Come to think of it, she does not mention the construction
of cathedrals and castles in medieval England either, for which we have
detailed invoices of quantities of material and prices.
Chapter 35 - The Dutch Preached Bourgeois Virtue
Ok, having disposed of the British, we are back to the Dutch. First, the
transition sentence. "What made bourgeois quantification conceivable was
the 'rise' of the bourgeois in northwestern Europe. But the rise was itself
more than a matter of numbers." There follows an extensive history of the
Dutch from Carolingian times, always leaders in trading. The wars of revolt
from the Spanish eliminated much of the remaining aristocracy. Their land was
not coveted by others because it was mostly mud flats.
I must comment that the circumstance in which the Dutch found themselves
subject to this Spanish 'domination' was due to a series of contingencies -
happenstance - the result of unusual dynastic alignments without which their
history would have been much different, not only within Holland but also in
their world-wide contest with the hated Spanish.
The remainder of the chapter is mostly a learned discussion of what one might
obtain about thought from analysis of fine art painting.
Then another remark that I find questionable. "The age was still one of
faith, much more so, in fact, than the Middle Ages. ordinary Europeans in the
Middle Ages were barely Christian. People in 1300 who might take communion once
a year, if then, were less religious than their spiritually aroused descendants
in the sixteenth century...."
But these 'poor' peasants gave their last pennies for the repeated
re-construction of huge cathedrals that burned again. They went on pilgrimages
many times more dangerous than travel in the 16th century. Masses of 'lower
class' people and even children went on Crusades to hardly known foreign lands.
Taking communion is not a sure metric for study of religious belief, especially
when it is not even available everywhere and all the time.
Chapter 36 - And the Dutch Bourgeoisie Was Virtuous
No argument from me on this. But the author is right to devote a detailed
analysis in the chapter to refutation of modern materialist historians who
cannot see beyond 'self-interest' and 'prudence only' as a 'real' basis for
action. Thus for them there is no such thing as a religious belief as the basis
She switches to another Dutch attribute. "The Netherlands was above all
the European frontier of liberalism. For an interesting lesser known point, she
points out that John Locke spent 5 years in exile in Holland and only returned
to England with the Dutch new king William III, who himself also brought Dutch
ideas to his new realm.
Chapter 37 - For Instance, Bourgeois Holland Was Tolerant, and Not for
The author continues the same theme - to refute today's materialist historians.
Finally, she claims that the Dutch in the 1600's were not as fully 'tolerant'
and they are today but were much more 'tolerant' than anyone else in their
contemporary Europe. Along the way she soundly applauds the Dutch for being
such examples of toleration now.
Part VI - Reformation, Revolt, Revolution, and Reading Increased the
Liberty and Dignity of Ordinary Europeans
Chapter 38 - The Causes Were Local, Temporary, and Unpredictable
This is an important chapter for its discussion about history itself.
Dr. McCloskey begins this new section with an interesting quotation. "Eric
Hobsbawn summarized Antonio Gramsci: "The basic problem of the revolution
is how to make a hitherto subaltern class capable of hegemony, believe in
itself as a potential ruling class and be credible as such to other
She does mention a bit later on that Hobsbawn was an unrepentant Marxist (CPU
member) and that Gramsci was an Italian communist theoretician on what would be
necessary to overthrow capitalism. The quotation likely came from Gramsci's
book written while he was in Italian prison. And it is one of the leading
theoretical concepts for radical progressive revolutionaries today.
She focuses on the advice's relevance for 17th-18th century Holland- Britain.
"Just such a revolution in beliefs happened slowly in northwestern Europe
between 1517 and 1789. She does point out that Hobsbawn's Communist ideas were
Her main point is: "The entirely fresh credibility of commoners as rulers,
even in royal France and England, and in particular among them the bourgeois
commoners, is what needs to be explained." But it seems to me that by 1600
there were plenty of 'commoners' in local power, for instance in Switzerland.
Seems it must depend on the definition of 'commoner' because many medieval
towns were independent and ruled by non-aristocrats, granted they were not
Then comes the more important part of the chapter - the discussion about the
nature of history itself. She defines it as three levels - that of individuals,
that of institutions, and that of a broad theoretical conception of causation
and causer. She notes several concepts - God as creator and mover -Hegel's
'World Spirit' - She mentions the most important of the Austrian School
theoreticians from Mises and Hayek to Boudreaux and Klein whose concept can be
termed 'Spontaneous Order. - but then there is Adam Smith's 'Invisible Hand'
and Darwin's 'Natural Selection'. This last is developed now by Matt
She has much more to say about the apparent nature of human history. For one
thing, she notes; "What is strange about the modern world, in other words,
is its utter economic unpredictability". For this she cites the popular
concept of Nassim N. Taleb - 'Black swan'.
Another point - "Institutions are conservative. They are routine,
predictable, suitable for laying down the future in 1700, That, after all, is
what makes them institutions, those beloved habits of the heart - ..." She
quotes Hayek on this. "Betterments require disobedience, creative
Chapter 39 - "Democratic" Church Governance Emboldened People
Dr. McCloskey writes that the great change 'turnings' in history that embody
creative destruction do not depend on institutions. Rather, they are
rhetorical. And one important rhetorical impetus was the criticism of existing
religious institutions of the Reformation. So she does point to the
Protestantism that preceded the bourgeois 'dignity and liberty'. A thought, she
notes, that is not appreciated by anticlericals today - that is materialist
economists. She has disagreed with Weber, but still concedes that the
Protestant religious revolt did have something to do with bourgeois success.
(She ignors Tawney's elaboration on Weber.) Still, once the Industrial
Revolution generated all manner of 'betterment' it did not take beliefs in
western religion for Chinese, Indians, and others to adopt 'trade-tested
betterment' ideas and processes.
The remainder of the chapter is an extensive commentary on the relation between
change in religious belief and organization and the freeing of the bourgeois to
develop economic innovation. She ties this back to her description of the role
of virtues in the volume The Bourgeois Virtues. So we find that,
"Ecclesiology, then affected economic thinking by analogy , through the
autonomy of congregations in Calvinist places such as Geneva, Scotland,
Holland, France and Hungary, and in still more radical places such as Poland
and Transylvania, and in scattered communities of Anabaptists and Independents
under pressure elsewhere in Zurich, Bern, Augsburg, Muenster, and the
Chapter 40 - The Theology of Happiness Changed circa 1700
Dr. McCloskey again defers to numerous authors to show that 'happiness' was not
thought of in classical and medieval philosophy. But it suddenly turned into a
flood of literature in the 18th century. This was related to the shift of
attention to thoughts of life in this world rather than the next. But the
approach and content of what constitutes 'happiness' continued to evolve. (What
Chapter 41 - Printing and Reading and Fragmentation Sustained the
Dignity of Commoners
This chapter is full of interesting facts and trivia about the impact of
printing on politics and culture.
Chapter 42 - Political Ideas Mattered for Equal Liberty and Dignity
In this chapter the author traces the lengthy and complex path through which
the bourgeois gained more and more dignity and liberty.
Chapter 43 - Ideas Made for a Bourgeois Revaluation
Dr. McCloskey launches this chapter with, "It is merely a
materialist-economistic prejudice, I say yet again, to insist that such a
rhetorical change from aristocratic - religious values to bourgeois values must
have had economic or biological roots."
(The operative words here are 'say yet again') Just kidding. Seriously, the
author feels beleaguered and requires all the ammunition she can obtain from
other authors to sustain her position. She enlists the support of more
economists and historians. She writes, "The common set of ideas in the
Enlightenment were ethical and political. " Further, "The debate by
the middle of the eighteenth century, the political theorist and intellectual
historian John Danford notes, was 'whether a free society is possible if
commercial activities flourish'". She engages in 'inside baseball' type
conversation with multiple others (some of whom agree and some of whom disagree
with her views. Erik Ringmar and Sheilagh Ogilvie feature in this.
Chapter 44 - The Rhetorical Change Was Necessary and Maybe Sufficient
By now we are well acquainted with this 'rhetorical change' - It is the
abandonment of aristocratic- religious value system for the bourgeois vales as
evidenced in the voluminous plays, novels, poetry and essays she marshals so
skilfully. The chapter is a mixture of this and that, economics, history,
philosophy, scattered examples.
Personally, I agree with the title statement, but question quite a few of the
author's remarks and asides. One problem, does not the abandonment of religious
belief have something to do with acceptance of materialism, which she faults as
the basis of so much economic theory?
Part VII - Nowhere Before On a Large Scale had Bourgeois or Other
Commoners Been Honored
Chapter 45 - Talk Had Been Hostile to Betterment
This is one of the author's much repeated central ideas. The key words are
'large scale' because the author knows her history backwards and forwards and
recognizes the many incidents (times and places) in which the general beliefs
she includes as 'bourgeois virtues' were accepted. She mentions many of these.
And she points to examples today in which they are not honored. As always, her
focus is on ideas. She frequently quotes approvingly Joel Mokyr. She provides
an interesting table depicting 'the hierarchy of human contacts' with rhetoric
at the top and biology at the bottom.
Another continued theme: "The hostility to trade-tested betterment among
aristocrats and peasants is ancient and usual." This is curious because
everyone lives and survives daily on the results of trade - everyone is a
trader. What so many deplore without even recognizing it is 'betterment'. When
we do not receive from a trade all that we think we should we presume the other
party is 'cheating'.
She puts this very well. "Both sides win in a deal, and both have profits.
But in the nature of mutual advantage, you could have got more profits.
There's always that annoying gap."
She elaborates on the psychology involved. Another well known psychological
idea stressed in investment lectures. "The trouble is imagination,
combined with an aversion to loss that tends to be stronger psychologically
than the pleasure of gain. The psychologists call it 'negativity bias'".
Dr. McCloskey discusses at length the ideas of David Graber. "The
anticapitalist anarchistic anthropologist David Graber, an Occupy maven, spends
534 pages in Debt: The First 5,000 Years (2011)
grumbling that 'arguments about who really owes, what to whom have played a
central role in shaping out basic vocabulary of right and wrong'". Yes, he
does. And she describes much more.
Nevertheless I recommend his book because he has a much clearer concept of
'money' and both currency and credit than one reads in current popular press
cor even in scholarly economics texts. His facts are excellent, but it is
conclusions that are biased.
Next, she offers analysis of folk stories and literature that shows the
peasant's belief that trade is a zero-sum enterprise and its essence is
'cheating'. Likewise the aristocrat believe in zero-sum and that he is normally
cheated by the merchant.
She sums. "Zero-sum is the default in thinking about my gain and thine. It
is the chief error in economic thinking in the street and in politics."
This thinking continues today, especially by today's intelligentsia. She
mentions Pope Francis I as a follower of Aristotle and Aquinas in perpetuating
Again, "The attitude toward trade and betterment is central."
She contrasts at length this attitude in France and England. And notes that the
French belief in the central state in the role of 'choosing winners among
proposed betterments submitted for judgement continues. "Compare the
regulative state nowadays in Europe.".... "The cultural setting of
France was in practice hostile to trade-tested betterment, at any rate on a
scale of comparison in which a comparatively laissez-faire Britain was a
success. France' policy was like that of the numerous modern states immensely
interested in the economic development of their citizens (and it may be a few
of the rulers and their cousins) by regulating trade in detail and jailing the
competitors of state-sponsored monopolies, such as Uber." She continues at
length to describe the French attitude to the present and also notes that
"in Spain economic growth was in fact killed until recently."
She writes that the fundamental problem is to distinguish between the specific
animosities of aristocratic and peasant groups toward trade and the broader
general background of humans to think that there is such a thing as 'just
price' and on what basis 'value' is determined. Subjects that I consider at
Then she confronts Janet Abu-Leghod and Jack Goldstone and others who claim
that the West 'won' because the East temporarily was in self-created
'disarray'. Yes, we read this all the time from people who are determined to
denounce 'euro-centrism". She replies that the problem was there due to
state interference and prevention. Her conclusion: "Europe was merely
lucky that such machinations by the elite were at length overcome by
trade-tested, markedly positive-sum betterments."
The question now is whether or not we will continue to be so lucky.
Chapter 46 - The Hostility Was Ancient
In this chapter Dr. McCloskey returns to describe the many sources of evidence,
both from historical accounts and literature, that support her contention that
the change in Rhetoric - that is acknowledging the concept of bourgeois dignity
and liberty, which she links directly with increased status for merchants and
market activities - was a dramatic change from prior disdain for work and
workers throughout history. And this disdain was the norm not only in Western
classical and Christian societies but also in China and India. Moreover, it is
all too entrenched in the thought of our elite intelligentsia today.
She writes, "Trading and profit making and entrepreneurship and betterment
have been more or less despised by the aristocracy in pastoral or agricultural
societies, and by the neo-aristocratic clerisy in our industrial society."
She makes a small aside for the ancient New East, but did not have
Landes- Mokyr above. Deeper discussion of
China and India is beyond the scope of the review.
Considering today she writes, "Such disdain for possessions in the present
life, and the matched disdain by landed aristocrats for the vulgarity of
trade-tested betterment, is even nowadays hard to ignore even among the elite,
because it is built into European literary and religious traditions, providing
the foundations for novels such as Sinclair Lewis's Main Street or
Richard Power's Gain, and movies galore." She recognizes the
examples of merchant cities and quotes David Gilmor and Tobia Smollett.
Here is her key distinction. "No one in Europe before the nineteenth
century created a thoroughly business respecting civilization on a large
scale." And "Even in commercial Italy the line between aristocrat and
bourgeoise was sharp..." She draws further examples from Mongols, Vikings
and German tribesmen - also from Chaucer, Icelandic sagas, Dante, and Bocaccio.
She also cites Jacob Viner both agreeing and disagreeing with various of his
Chapter 47 - Yet Some Christians Anticipated a Respected Bourgeoisie
In this chapter she amends her view some what. She opens with, "In other
words, the attitude of medieval Europe and its church toward the bourgeoise was
nothing like entirely hostile especially in northern Italy and in some of the
ports of Iberia and the Baltic, even if it did not result in the
business-dominated civilization of the southern Low Countries after 1400 , and
more widely Holland after 1568, and England after 1688."
Well, this certainly changes the criticisms I had for her rather blanket
statements in the first chapters. Here she quotes authors with decidedly
different opinions about markets and merchants even as far back as Rome.
Amazing, in view of the early chapters she writes, "Yet the urban monks of
the thirteenth century in fact emphasized the dignity of work in a
proto-bourgeois fashion that sat poorly with the aristocratic antiwork values
of the Roman Empire."
That's what I thought back in chapter 1 and on. Now we read about St. Benedict,
for instance. The entire chapter more than a little modifies her many previous
chapters. She cites and quotes Giacomo Todeschini's much more favorable
opinions of medieval commerce. There are many more pages devoted to this
Here she turns the argument on its head. She writes, "Right down to the
present many business people have insisted that God's work comes first . They
are not always lying or self-deceiving."... "In modern times a
strictly materialist hypothesis, the 'hermeneutics of suspicion' a la Marx and
Feud and Samuelson that dominates modern social science, strips away any ethics
except prudence only."
Chapter 48 - And Betterment, Through Long Disdained, Developed Its Own
The point of this chapter is that merchants and bourgeois folk in general are
capable of seeking protection and monopoly (well Adam Smith said so).
Mercantilism was a economic-political theory to protect and enhance commerce in
the interests of the state. The author's ultimate aim is to show how all this
persists today. She notes, "it is what is behind the persistent modern
revivals of mercantilism against international comparative advantage."
Many examples follow. These mix those from the 17th and 18th centuries with
those from Silicon Valley today. "The new vested interests of a bourgeois
civilization sufficiently overbalanced the old vested interests of traditional
clergy, peasants, aristocrats and local bourgeois monopolists."
Chapter 49 - And Then Turned
In this chapter Dr. McCloskey discusses the various theories of authors who
have proposed them as explanations of the Industrial Revolution and her concept
of 'betterment'. She finds all of these wanting because they could only explain
small and incremental changes. By 'turned' she means the dramatic and huge
scale of the change, not 30 or 40% but 1,900 % and in a very brief time.
She writes, "Something changed in elite talk about betterment or
trade-tested innovation or novelty from 1300 to 1600 in bits of northern Italy
and the southern Low Countries and the Hanse towns, then more broadly and
decisively down to 1648 in North Holland, then after 1689 in England...."
"In England the change in rhetoric about the economy happened during a
concentrated and startling period 1600 to 1776...." She poses the question
'why were Leonardo's innovations developed?' Her answer is that the change did
not come from change in individuals or institutions but in the change in
thought of an entire society, change in readiness and enthusiasm for
Chapter 50 - On the Whole, However, the Bourgeoisies and Their
Bettering Projects Have Been Precarious
Now the author is back to describing the negative side. She writes, "Yet
before the Reevaluation of the eighteenth century talk against betterment for
profit was nearly universal." "So the bourgeoisie is always with us,
but bourgeoisies have usually been precarious." She provides more examples
from history and more quotations from many observers and later commentators.
She comments, "The regulations could kill betterment." She is
discussing the 18th-19th centuries, but also and very pointedly our times
Actually her whole mission in dissecting the real causes of the 'betterment'
that created modern society is to show that the same obstructions that
prevented it for so many centuries then and only were breached with
considerable effort are in danger of being re-imposed by the same type of
actors (clerisy) today. She turns to China and then the Islamic world as
examples of the varying attitudes over time toward markets and merchants, again
relying on the research and academic reports of recent theoreticians.
Part VIII - Words and Ideas Caused the Modern World
Chapter 51 - Sweet Talk Rules the Economy
The title of this Part VIII by now is quite familiar. But, lest anyone is still
not convinced, the author expands her argument. And, it turns out, that it is
not this happy reader with whom she needs to argue, but the establishment of
the current economics profession, and many materialistic historians. So, argue
She does, "There is something strange in modern economics,. Nobody talks -
except to say yes/no to offers expressed in numbers of dollars or to 'convey'
information as through a conduit." Economist (s) in their theories ignore
persuasion, stories, metaphors, all the chatter of the office and the
marketplace in which, as Smith said, 'everyone is practicing oratory on others
through the whole of his life.'" "The modern economist allows only
cold information, not hot persuasion." Marxian and Samuelsonian economics
comes in for analysis. "Sweet Talk" is persuasion, such as
advertising, but much more. It changes attitudes, beliefs, and then actions.
But is discounted by the economist members of the clerisy or disdained. She
goes through the statistical lists of employment by function in the U.S. and
assigns 'persuasion' as a significant component of their duties to millions of
individuals. She finds that at least a quarter of the employed use 'persuasion'
in their jobs. Plus she notes, today there is much more government coercion
than in the early 19th century and before.
Her conclusion, ""Sweet talk, is the carefully chosen but to a large
degree opportunity coast-free words of persuasion, and a quarter of our income
comes from it." She turns to other methods employed by researchers wanting
to find out about this verbal activity and notes similar results. Her point in
all this is that standard economists do not count any of this in measures of
economic activity. As an aside she notes that worry about robots is silly since
they will not be involved in this kind of work. Actually, 'sweet talk' is
becoming a larger component of economic activity.
Chapter 52 - And Its Rhetoric Can Change Quickly
She asks, so what? Actually a great deal. 'Sweet talk' is rhetoric. Her point
is that all this previous emphasis on rhetoric as a causation factor is valid.
And rhetoric can change rapidly and especially between generations. And belief
in particular 'virtues' she has shown is critical for societies. She points to
the 'virtues' of prudence, courage, and hope that once held froth strongly in
America. She also discusses rapid changes in the prevailing role of 'virtues'
in other cultures such as India.
Back to the point, she writes, "What changed in Europe, and then the
world, was the rhetoric of trade and production and betterment - that is, the
talk about earning a living among influential people such as ..." a very
long list. The remainder of the chapter expands on this concept.
Chapter 53 - It Was Not a Deep Cultural Change
First a lengthy list of 'nots' This is what other authors have proposed as
'causes' of the 'betterment', and they are many, most of which we have
encountered in the text (3 volumes) already. No, again she stresses, it was
Talk and more talk. "The talk mattered whether or not the talk had exactly
its intended effect." The contrary theories are ascribed to their authors,
for instance. "Modernity did not arise, I say yet again, from the deep
psychosocial changes that Max Weber posited in 1904-1905". She provides
many examples of very rapid change in public rhetoric about major social issues
in Britain and the U,.S. in late 19th and all of 20th centuries. She disagrees
with David Landes' theory about deep national culture's significance in
Chapter 54 - Yes, It Was Ideas, Not Interests or Institutions,
That Changed, Suddenly, in Northwestern Europe
Now back to the positive side, with more examples. In this respect she quotes
and agrees with Mokyr. Characteristically, her rephrasing the same concept is
about 3 times longer than his more direct version. She continues to marshal the
opinions of other scholars both pro and con on the question of what constitutes
'betterment' itself, but not on the fact that such ideas about it have a
Then she switches gears to argue with a long list of other authors on the
significance of ideas versus institutions and personal interests of important
Chapter 55 - Elsewhere Ideas about the Bourgeoisie Did Not Change
The author proposes on historiographical grounds that analysis of human history
must be conducted on comparative grounds over wide regions and times. She cites
one of her favorite professors again, Alexander Gerschenkron, and also Albert
About the latter she comments that he was 'great economic scientist overlooked
in favor of spinners of nonfacts by the committee for the Sveriges Riksbank
Price in Economic Sciences in Memory of Alfred Nobel. Wonderful dig there.
The authors's conclusion here, "The Bourgeois Revaluation leading to
frenetic betterment was a probing, as loyalty to rank weakened, as the holy,
catholic, and apostolic church fragmented, and as gender roles began to alter
in character of what people believed they ought to believe about ordinary life.
The Fourth Question - What are the Dangers?
Part IX - The History and Economics Have Been Misunderstood
Chapter 56 - The Change in Ideas Contradicts Many Ideas from the
Political Middle, 1890-1980
Dr. McCloskey restates her position thusly: "The rhetorical and ethical
change around 1700, I say, contrary to the materialist persuasions of many of
my colleagues, caused modern economic growth, which at length freed us from
Ok, agreed, but by what actual, practical methods did they utilize their new
position of 'dignity and liberty' to impact the real economic world?
Right off, Dr. McCloskey again disputes Douglas North and Robert Thomas who
claim 'the industrial revolution was not the source of economic Growth'. They
claim a much earlier origin and process of gradual expansion. She counters that
the rate of expansion prior to 18th century was too small a factor and the
whole point of her argument is that this rate exploded in an unprecedented
manner. Furthermore, she avers, even this increased rate or expansion was
nothing in comparison with that which occurred after 1800.
She again writes, "It was a sustained economic growth of 5,87 percent per
year - higher than the medieval and early modern rate by a factor of sixty, and
an acceleration well above even the admirable British Industrial
Revolution." It was a factor of 100 for over two centuries. She then
engages in friendly argument with many other economic historians (citing
specifically their books and essays) who, she claims, miss the point by
debating over the actual rate of expansion during the 18th century. Rather they
should join her is learning why the really huge increase in rate took place
AFTER 1800. She likewise discounts the various theories advanced by authors
about expansion in Song China and elsewhere. Her point is that these were
episodes without follow on. She cites favorably, Eric Jones, "'Had the
Enlightenment idea of progress not influenced practical affairs,....'"
Yes indeed, but why not cite Charles Beard? Dignity and liberty occurred in an
environment of the very idea of progress.
Amid more debate she writes, that the expansionary change came out of Holland
to England and Scotland from where it exploded. And she strongly explains that
her theories are deeply based on her Christian theology.
Chapter 57 - And Many Polanyish Ideas from the Left
Dr. McCloskey begins with a devastating critique of Karl Polanyi's book. Noting that Polanyi
has been discredited, she thinks that he may still be lauded by the left due to
their perception that he is one of them. She thinks that the right likes
Carlyle for the same reason. Throughout her book, the author disagrees with
both leftist and rightist economists and historians. The huge fallacy Polanyi
perpetrated, she writes, is his claim that markets did not exist prior to
modern times. She writes that subsequent leftist authors simply echo Polanyi on
But to me not only does Polanyi misrepresent economic history prior to 1800 or
so, even worse he launches into a diatribe about how machines are destroying
culture and society.
Dr. McCloskey quotes other recent historians who also cite Polanyi and accept
this false view of medieval (and ancient) economic history.
A personal note - Surprisingly, she cites Walter McDougall, who relies on
Polanyi for a false picture of England but relies in turn on a book by Dr.
Ellen Meiksins Wood who praises Polanyi. Dr. Wood (a noted Marxist) is the
widow of my thesis adviser at Columbia, Neal Wood, in 1960-64. Small world.
Dr.. McCloskey continues with critique of other historians such as Joyce
Appleby, who have relied on Polanyi. Moreover, she notes, that Appleby's
definition of 'capitalism' is meaningless. The excellent dissection of Polanyi
continues for several more pages. Even Jared Diamond
fell into the Polyani swamp. She comments on the Polanyi concept of ancient
civilizations using a 'redistributive' form of economics. She notes the
references in this literature to ancient Mesopotamia. Also see Reden about classical Greece and Rome
What the Polanyi acolytes are misunderstanding is a market and commerce based
on a money made up of credit rather than currency. But of course transfer of
economic resources based on tribute, a major activity in ancient Rome, is a
form of redistribution.
Chapter 58 - Yet Polanyi Was Right about Embeddedness
Here, Dr. McCloskey gives Polanyi credit and good marks for his statements
about Markets being embedded in social institutions.
I am surprised, because I thought this is obvious. This does not make up for
the multiple mistakes in the rest of Polanyi's theories, another of which is
his use of the concept 'redistribution'.
She references Polanyi, "Across cultures and for all of human history
Polanyi argued, material exchange had meaning far beyond individual want
She notes that this idea is central to her books. Indeed it is, but it is not
unique to her. She provides a small table to facilitate comparisons between
Polanyi's concepts - Provisioning, redistribution, reciprocity and modern
market - with concepts given by Klamer, Fiske, the seven principal virtues and
the questions to which they are addressed.
Chapter 59 - Trade- Tested Betterment Is Democratic in Consumption
Dr. McCloskey's point in this chapter is that the results of 'trade-tested
betterment - profits for the producers - are achieved by betterment for the
consumers, who comprise the mass of society. That real, major 'betterments'
generate 'supernormal' profits is because they generate those super normal
betterments. In support of her theme, as usual, she marshals both theories - of
various 'scientists' - and practical examples of real people.
"By contrast, a profit-making firm's criterion is. Will a large enough
number of merely common people pay more for the stuff in question than it costs
to make it?" This brings up the subject of government related to provision
of 'unprofitable' goods and services.
Her conclusion is : "Trade-tested betterment is the most altruistic of
economic systems, because everything is directed toward satisfying ordinary
Chapter 60 - And Liberating in Production
In this chapter she switches to the production side, including labor. She
contrasts the typical leftist idea of 'wage slavery' with real slavery versus
real free market labor. She agrees that real, free, independent labor did not
exist prior to modern times and it was a result of increased personal liberty.
But individual labor rights during the Middle Ages were not slavery either. Low
wages were a fact inherent in the poverty that resulted from poor productivity.
But leftists today persist in labeling free workers as 'wage slave'. If so then
everyone is a slave today and we need a new term to designate real 'slaves'.
Chapter 61 - And Therefore Bourgeois Rhetoric Was Better for the Poor
Now we get to one of the standard leftist contentions, that 'capitalism' has
and continues to cause increased poverty. The author contrasts the 'rationing'
that is inherent in any situation of shortage that was 'hierarchal' in nature
during prior centuries with the forms of 'rationing' that remain today. Yes, it
exists but betterment based on trade-tested results have benefited everyone
including the poor.
Part X - That Is, Rhetoric Made Us, But Can Readily Unmake Us
Chapter 62 - After 1848 the Clerisy Converted to Antibetterment
The author begins by noting the dearth of novels since the mid 19th century
that present businessmen in a favorable light. Of course the same is true even
more extensively and obviously in Hollywood movies. She expands the point to
the fine arts. She also writes: 'There is scarcely in English and French
intellectual in the nineteenth century who was not simultaneously the son of a
bourgeois and sternly hostile to everything bourgeois." But she ventures
no theory about why this was so.
Chapter 63 - The Clerisy Betrayed the Bourgeois Deal, and Approved the
Bolshevik and Bismarkian Deals
More elaboration on the same theme. She writes: "The clerisy is an
appendage of the Bourgeoisie."
I claim, rather an internal part.
And she claims: "It is a puzzle." But she then cites Cesar Grana to
the effect that clerisy were Romantics and considered the bourgeoisie to be
She continues: "After 1848 the Bourgeois Deal and its ethical supports
came under attack from two alternatives." One was state ownership of
property and central planning. She devotes several pages to analysis of this
The second she terms the Bismarkian Deal. She notes that it was Bismarck who
invented the 'welfare state'.
This amounts to government control of much economic activity without actual
ownership. She devotes several pages to this analysis. And she terms these
'leftish and rightish' alternatives.
But to me they are both statist versus individualistic programs and both
designed and supported by elements of this clerisy (intelligentsia) who hate
the idea that the bourgeois know better than they do what is good for all and
use two not so dissimilar versions of the state to legitimize their own power.
Chapter 64 - Anticonsumerism and Pro-Bohemianism Were Fruits of the
In this chapter the author describes the attitudes of various famous writers
and composers who denounced 'capitalism'. A lengthy commentary on La
Enlightening, I guess, as the opera is one of my very top favorites although I
do not know a word of the arias or chorus. I do not care about the words - it
is the beauty of the human voice as a musical instrument that counts.
She writes: " Such antibourgeois, antimarket, antidemocratic,
antiprogressive theories haunt us still, .."
For sure, yes indeed, and for the same reason - desire for power.
Chapter 65 - Despite the Clerisy's Doubts
Dr. McCloskey begins with, "Neither the traditionalist right nor the
progressive left are happy with the modern world."
True enough. But I therefore do not count Bismarkian statists as
They did NOT support traditional values, society or politics in the German
territory. The unification of Germany and exclusion of Austria from German
politics were not 'traditional'. The chapter is a mixed commentary on what the
various social- political groups proposed.
She hits on one important myth, that rural people were driven off and forced
into the cities. She notes they were 'pulled' not 'pushed' into the cities and
the current examples in India, China and Africa show the same. But also, the
rural, agricultural workers in England actually increased - not decreased - the
whole scenario was driven by huge population expansion. And that was enabled by
the huge increase in productivity that is her main point. The case was that
more people were able to make more things and more things supported living for
Most of the chapter is a valid critique of current mistaken policies
(especially socialism) created by intelligentsia in power.
She writes: "The outcome of the conquest of power by the bourgeoisie was
in fact the opposite of what Bakunin expected."
This hits the direct cause. The intelligentsia was frustrated by the outcome of
the political revolution (1770's 1830's)- by the Power of the bourgeoise rather
by themselves. Today, having gained great but not conclusive power, the
intelligentsia is determined to keep power and expand it. Dr. McCloskey
provides good examples.
One of her best sections is her list of the 'seven old pessimisms and the new
eighth one (environmentalism) all trotted out by the anti-bourgeois
intelligentsia in the effort to prove that they really should be in power to
save everyone. Of course all of that is false. She notes one typical, well
known, example - Paul Erlich who continues his merry way of falsification.
But Why does he continue to gain supporters and from whom? From the
intelligentsia, that is who, and because pessimism about the future is the
total basis for their claim to power is their 'scientific' ability to save the
world from that disaster..
Chapter 66 - What Matters Ethically Is Not Equality of Outcome, but the
Condition of he Working Class
Dr. McCloskey opens with this: "The left progressives and right
conservatives protest, "But in those dear, dead olden days we we
equal". No, we were not, "
I must strongly protest. As a ultra-right conservative I am desperately trying
to PRESERVE the 'bourgeois deal', not fault it in any way. As a student of
history I do not believe any periods of the past were 'better' for humanity in
general. I do not believe that 'inequality' has increased. I do agree with Dr.
McCloskey that 'the left, however, instead of focusing on the raising of the
absolute level of the poor, suggests that we take riches from the well-off,
Why is that? Because the intelligentsia Need the poor, they need more people
dependent on them to retain power. Yes, the left claim to be egalitarian. That
is because they know that Utopia is an impossible dream but the endless search
for it is a compelling myth that enables and legitimizes their claim to lead.
But the intelligentsia also need the extremly wealthy - 1 they need someone to
attack in the name of the poor - and 2 they need someone to create the wealth
that they distribute - they cannot create wealth themselves. The Soviet and
Chinese examples show them that they cannot simply prevent the wealthy from
But I do wonder if hunter-gatherer bands were as egalitarian and Gerald Gaus
claims. Even a 'group' of two individuals needs a leader. Hierarchy is an
essential prerequisite for cooperation. Yes, indeed, Envy is endemic as well
and acknowledged hierarchy is part of defense against it. For a comprehensive
study of Envy read Helmut Schoeck's book Envy: A
Theory of Social Behaviour. I support Hayek in what I have studied, but
don't know what Gaus and McCloskey mean by his Worry. It seems to be worry
about equality encouraging mob action- ochlocracy - but a mass gathering of
individuals only becomes a mob when someone asserts leadership (power) and
provides active direction. Yes, again, encouragement of envy is a major tool of
the progressive left.
Dr. McCloskey concludes with "The uplifiing during the Great Enrichment of
era income to more than ten or thirty time or one hundred the world's pre-1800
level per person gives every sign of spreading...." Yes, as
Trentmann shows. the world is now 'swamped'
with things. But the greatest asset of everyone is days of life and that has
increased dramatically without being factored into such measures as GDP.
Chapter 67 - A Change in Rhetoric Made Modernity, and can Spread It
This chapter is a summary of Dr. McCloskey's position. And also it is a summary
of her descriptions of opposition theory and practice. And also it is a warning
that what rhetoric can achieve or at least help achieve it can also reduce or