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Deirdre N. McCloskey

Subtitle: Why Economics Can't Explain the Modern World, Univ. of Chicago, Chicago, 2010, 571 pgs., index, notes, bibliography, paperback


Reviewer Comment -
This is a terrific book even as a 'stand alone' study, but it gains great strength and value when read with the two other volumes in the author's series on the Bourgeois. This is a study of the concept that 'Ideas have Consequences" so may be read with others on this concept. It also may be read with a counterpart - Frank Trentmann's Empire of Things: How We Became a World of Consumers, from the 15th Century to the 21st. which describes the material side of the 'rise' of the Bourgeois and its effect on history. From the chapter titles the reader already sees the author's methods. With so many other theories that attempt to explain the historically unique explosion in material well-being (standard of living) since 1800 (mostly materialistic in one form or another) the author sets out to demolish these one by one. Other studies, such as Lawrence White's, The Clash of Economic Ideas, clearly show that the academic field called "Economics" is fundamentally materialistic - which itself explains the author's subtitle. The list below contains some other authors' theories about how 'the West' came to create the Modern World. I have written a general review and comments on the three volumes here.

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Volume I - Bourgeois Virtue

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Volume III - Bourgeois Equality

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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.

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Landes, David & Joel Mokyr & William Baumol -The Invention of Enterprise
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. The essays on economic developments in Holand and Great Britain from 1600 to 1800 are especially relevant.

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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 theories.

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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 'capitalism'.

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Stark, Rodney - The Victory of Reason
Another book maintaining European domination was due to intellectual causes developed over centuries.

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Stark , Rodney - How the West Won
One of the books that claims European domination over much of the world was a result of centuries of historical preparation - A view Dr. McCloskey does not share.

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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.

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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.

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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.

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Gilder, George - Knowledge and Power
Progress depends on creation of new ideas - new meaning surprising. He describes the theory of knowledge now driving future expansion of eeryone's standard of living.

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Gilder George - Wealth and Poverty
The author's theory on the causes of relative economic conditions in different countries.

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Bury J. B. - The Idea of Progress
The fundamental change in increasing social belief that progress is not only possible but historically proven. Dr.. McCloskey somehow does not discuss Bury's thesis. Although Dr. Bury discusses in detail the ancient and medieval belief that she cites as preventing economic progress.

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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 constitutional U.S. are particularly full of evidence of the role of credit. And the description of the role of Alexander Hamilton is excellent. Another compendium of the material results of economic expansion, but Hamilton's ideas and those of significant individual inventors and entrepreneurs are stressed. The author also provides detailed data that shows Dr. McCloskey is correct in stating the early 'Industrial Revolution' did not require significantly large amounts of capital nor was it from a lengthy accumulation, Capital, that is financing, was available on the spot when needed.

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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 for providing capital was very significant. There are many other books on the history of money and banking, but this is a recent as well as relovant one.

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Martin, Felix - Money: The Unautorized Biography
The author discusses the importance of the Great Monetary Settlement which created the Bank of England and led to the trust in private money created by the bourgeois and secured by the power of the sovereign. The author discusses the subject that Dr. McCloskey minimizes

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Ingham, Geoffrey - The Nature of Money
An excellent reference to the history of money and especially its central role in society - it is not limited to an economic role.

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Whalen. R. Christopher - Inflated: how Money and Debt Built the American Dream
The first chapters are about the effect of money - (credit=debt) in America.

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Ferguson, Niall - The Ascent of Money
An alternative view of the role of banking and credit in creating thefinancial basis for 'betterment'.

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Ferguson, Niall - The Great Degeneration
Description of what has happened in recent decades.

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Melloan, George - The Great Money Binge
Another view on the expansion of credit

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Mantoux, Paul - The Indistrial Revolution in the Eighteenth Century
The author describes in detail specific inventions and developments in specific industries such as textiles and iron.

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Trentmann, Frank - Empire of Things: How We Became a World of Consumers, from the15th Century to the 21st
This as the description of the material results of the 'betterment' Dr. McCloskey describes. Itr contains a mass of specific details on the great volume of privately owned goods that resulted from the expanded production.

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Further Recommended reading


This book


Preface -
Dr. McCloskey sets right off to state her thesis. "A big change in the common opinion about markets and innovation, I claim, caused the Industrial Revolution, and then the modern world. The change occurred during the seventeenth and eighteenth centuries in North-western Europe." "That is, ideas, or 'rhetoric;' enriched us." The change was about the rhetoric about prudence and the other virtues necessary for a flourishing commercial society. Her fundamental point is that the change was not a matter of materialism as presumed (from opposite perspectives ) by the left and right political positions today. The cause is not any of the varied theories (she mentions some) that one reads in economics and history texts.

She is explicit. "The important flaw in economics, I argue here, is not its mathematical and necessarily mistaken theory of future business cycles, but its materialist and unnecessarily mistaken theory of past growth." The big story is about ideas. "Innovation backed by ideology, then, promises in time to give pretty good lives to us all."

This is what George Gilder and many other proponents of innovation and reduced government manipulation advocate today. Hence Dr. McCloskey's thesis and argument is of vital importance today.


Chapter I - The Modern World Was an Economic, Tide, But Did Not Have Economic Causes
The author opens with a basic fact that she repeats frequently. The average person circa 1800 lived on $3 a day in our prices. Now in the advanced countries that is $100 a day. By 1800 only the very wealthy and powerful lived on very much more.

I believe this is an exaggeration - or her 'average' is reduced by the millions who did live on near nothing in Africa and much of Asia and the Americas. But by 1800 many people in Western Europe lived on more than $3 a day. In fact, when she gets into detailed descriptions of European development she describes living standards in - for instance- Netherlands, England and Italy at a higher level than $3 per day prior to 1800. Read both Trentmann and Spufford. She asks, "How did average income in the world move from $3 to $30 a day?" Clearly, here she means average for entire world.

"The main point of this book is that the hockey-stick handle leaps, such as Norway's from $3 to $137 per head, with its cultural and political accompaniments, did not happen mainly because of the usual economics." She is referring to the graph of material progress on pages 161 and 492 of Morris's' book that shows a straight line along the x axis for centuries until it abruptly turns straight up in 1800 and continues in recent centuries. But Morris's theory about why is totally different from McCloskey's.


Chapter 2 - Liberal Ideas Caused the Innovation
Dr. McCloskey agrees that 'talk and thought about the bourgeoisie' in Europe during the century prior to her selected era had an influence (rather like setting the stage for the main event). Then came a 'probably more powerful' shift - the Revolts and Revolutions in Holland, Britain and America, and Poland and France. But she will show that it was the 'Bourgeois Revaluation" that developed in Holland and Britain in the 17th and 18th centuries that was critical.

She writes: "But you can't imagine the enrichment part without the Revaluation." This 'revaluation' was about raising the new status - the 'dignity' - accorded to the bourgeois by society and themselves. And with this came also a new level of 'liberty'. And "both were rhetorical events."

She then switches to her thesis that these two are linked to concepts of 'virtues'. "Among the seven principal virtues, faith is the virtue of backward looking, of having an identify...... Dignity encourages faith..... Hope by contrast is the virtue of forward looking, of having a project.... Liberty encourages hope."

She writes clearly, "I claim here that the modern world was made by a new, faithful dignity accorded to the bourgeois - in assuming his proper place - and by a new, hopeful liberty - in venturing forth." ... "Both were necessary." She describes the meaning of both. "It matters that dignity and liberty work together." She asserts that, "All this (previous social beliefs) changed on a large scale, first in Holland, in the Bourgeois Revaluation from the 17th through the 19th centuries."

Dr. McCloskey writes that Weber, Lucas, Marx, Engels, and North were wrong in ascribing other causes. The change was sociological, historical and political. She refers to Shakespeare and Jane Austen for their examples of contemporary views on the bourgeois to show that social acceptance of bourgeois dignity and liberty was 'slow in coming'.

She also notes that, "Such dignity for innovation and liberty for enterprise are sometimes still opposed, which along with a bad climate and a bad start is why some countries remain poor."

But she claims here and repeatedly that prior to 1800 people lived on $3.00 a day. If she means an average per capita on a world- wide basis this may be true. But already between 1600 and 1800, I believe, the Dutch and British including their colonies were living at a larger daily income than that .


Chapter 3 - And a New Rhetoric, Protected the Ideas
There are several topics discussed in this chapter. The author begins with Frederic Bastiat's views on a proposed new French railroad. His point was that politics was purposely making things less efficient and more costly by increasing labor costs rather than seeking lowest costs. Her point is that the politically powerful (including the intelligentsia) then did not care. And that they disdained both work and commerce. She claims it was a revolution on thought - ideas - in Holland and Britain that enabled the economic expansion. And for a while some of the clerisy (intelligentsia) accepted the change.

She writes: "The idea of progress through bourgeois dignity and liberty took hold of the social imaginary of the West." And further: "I am claiming, in other words, that the historically unique economic growth on the order of a factor of ten or sixteen or higher, and its political and spiritual correlates, depended on ideas more than on economics."

Well, yes, but economics is just putting ideas into practice. So what she really means is that it was a change in widespread social ideas that enabled the economic expansion.

She, continues, "But ideas, not mere trade or investment or exploitation, did the creating and the releasing. The leading ideas were two; that the liberty to hope was a good idea and that a faithful economic life should give dignity and even honor to ordinary people..."

Dr. McCloskey then turns to justice to show the differences between 'commutative' justice and 'distributive' justice. She also turns to Jane Austen again for an example of the change in common meaning of 'honest'.

Then in another shift she discusses the growing disuse of the medieval concept 'great chain of being' She favors this change. I believe it was largely abandoned already in the 16th century rather than 19th. And it was replaced as the legitimizing concept for justifying government authority by the concept of 'state'. Not necessarily a good thing. Finally she insists that many economists today are misunderstanding causation for economic 'betterment' by ignoring or dismissing the role of ideas as expressed in rhetoric.


Chapter 4 - Many Other Plausible Stories Don't Work Very Well
Dr. McCloskey throws down her gauntlet. "Quite a few of my social scientific and even many of my humanistic colleagues will be strongly inclined to disagree, and not merely about my praise for the bourgeoisie. They have the idea, held with passionate idealism, that ideas about ideas are unscientific." She singles out positivism and behaviorism and economism as preached in academic graduate schools. "Economists and historians who believe themselves to be quite exempt from any philosophical influences are usually the slaves of some defunct philosopher or science...." "Their faith is admirable." But they mistakenly rely on Prudence Only in spite of the influence of Thomas Kuhn. She continues at length with biting criticism.

She writes: "To explain the new dignity of the middle class in northwestern Europe, and to explain the success it brought to the modern world, the social scientists need to moderate their fervent ideology of materialism - though of course without denying material forces." She brings some potential allies into the field, such as Rodney Stark and Rakesh Khurana and even J.S. Mill. She denies throwing materialist economists into the 8th Circle of Hell. Well, almost. But Prudence Only explanations should be thrown at least that far (deep). Many such explanations follow out the window. There is much more in this section.

Moving on, she writes: " ' Teach the conflicts' she was advised. So she continues along that line throwing one and all aside. She provides her example of this technique "My honored if misled friends in economics, history and economic history say that the modern world came from trade or exploitation or legal change. They say that, I say, no, it didn't. It came from a change in the rhetoric about the common economic life, which lead to the Franklin stove and the Besemer process and peaceful transitions of political power and all our joy." So she provides examples going back to Plato of argumentation by discarding all possible alternatives to accept the remaining one as valid.

The result is, "I assemble here a catholic sample of the scientific and philosophical work bearing on the hypothesis." She provides sample of the method as used in a variety of scientific disciplines.


Chapter 5 - The Correct Story Praises "Capitalism"
Dr. McCloskey states that the present book is one of a series to defend 'our modern form of innovation - universally if misleadingly called 'capitalism'". When writing this one, she planned on a set of six, however, it appears for now that three will suffice.

She cites several types of individuals for whom such defense (from their preconceptions) is required. She explains: "Together the books make one big argument. The argument is: Markets and innovation, which are ancient but recently have grown dignified and free, are consistent with an ethical life. An ethical and rhetorical change in favor of such formerly dishonorable activities of the bourgeoise - innovation and fulling mill for woolens or innovating a bank for paying florins in England easily, happened ....." And the rhetoric - words - mattered. "

"Yet in the late nineteenth century the artists and the intellectuals - the 'clerisy'" (intelligentsia) as Samuel T. Coleridge and I call it - turned against liberal innovation. The treason of the clerisy led in the twentieth century to the pathologies of nationalism and socialism and national socialism and in the twenty-first century to the pieties of radical environmentalism, and to the dismal pessimism of the union left and the traditional right..... The scientific schemes reasserted an elite control over the newly liberated poor people."

This is the key point. It is unfortunate but true that it takes three large and important books to drive this home. And still no doubt so many of the intelligentsia will deny it. Of course they will because to admit it would be to surrender their claim to power.

She continues: "The clerisy's anti-innovation and antimarket and antiliberty rhetoric in the years since 1848, though repeated down to yesterday, misapprehends the scientific history." Many examples follow, from left and right, but mostly left. Then she offers a discussion of her efforts in volume I. From this she leads to a philosophical discussion of 'objectivity' and 'subjectivity', writing that neither can result in knowledge. Rather she opts for being a 'conjectivist'.

She describes her plan for a third volume to be titled The Bourgeois Revaluation: How Innovation Became Virtuous - and a fourth volume titled, Bourgeois Rhetoric: Interest and Conversation during the Industrial Revolution - and a fifth volume titled Bourgeois Enemies: The Treason of the Clerisy, 1848 to the Present. - and a sixth titled Bourgeois Times: Defending the Defensible. Instead we have Bourgeois Equality.

She explains why she believes 6 volumes are necessary with a very long list of modern authors whom she found attractive and even valuable until becoming more discerning. I read most of these authors some years before she did and found many of them decidedly wanting, and the rest I learned enough about to realize they are a waste of time. But I did read and study many authors she does not mention from Plato and Aristotle and Indian and Chinese classics to the present.

She adds further: "The sextet of the Bourgeois Era can perhaps persuade you whether progressive or conservative or standing in between, that your belief that innovation is especially greedy, and the bourgeoise sadly ignoble and unspiritual, might - just might- be mistaken." Pardon me, but I could never believe anything of the sort. I did not believe any of that 70 years ago nor any time since.


Chapter 6 - Modern Growth Was a Factor of at Least Sixteen
No argument with her here. No question her estimate is reasonable or understated - indeed the average person in US or UK now consumes at least 16- 30 times as much in assets per day or year and did out ancestors circa 1700 - 1800. And this does not even count non-material assets. Nor does it count the greatest increase of all - the fundamental personal asset - a day of life of which people in advanced societies now have so many more. She takes pains to address the doubters or critics but why bother? She addresses these increases as well later in the chapter. She does get a bit into the question of properly measuring the prices of things. But prices are not a valid measure of 'value'. She mentions Nordhaus for his efforts to establish physical measures for comparisons. He records that the real wage for Americans has increased not by a factor of 13 but rather by 40 to 190 times.


Chapter 7 - Increasing Scope, Not Pot-of-Pleasure "Happiness." Is What Mattered
Dr. McCloskey explains what she means. Possessing a dozen chairs is not much greater in itself than having 10. One can only sit in one chair at a time, but having more increases the 'scope', the choices and opportunities, to enjoy more variety of chairs. She discusses 'diminishing returns' or 'marginal utility' - the concept that adding one more to a larger total (say 100) than adding one more to a small number (like 4) Of course this applies to everything. Although we must wonder about a famous lady who apparently did have increased pleasure from owning hundreds of shoes. This chapter is directly related to Frank Trentmann's book "Empire of Things.

She references Richard Easterlin, who began the field of 'happiness' studies. He concluded, "'how people feel they ought to live ... rises commersurately with income.'" And she disagrees with his conclusions and advice.

She disagrees with the intelligentsia's mantra that follows from this that 'consumerism' is bad and that the unknowing masses are 'enslaved' on this treadmill of wanting more and more. And, further, she writes: "The literature pays no attention to reflections on happiness that are nonquantitative or nonmathematical." Her entire critique of this 'happiness' literature from economists is negative because as usual they stick to 'measuring" via surveys and skipping the whole human history of discussions of 'happiness' in literature. If it can't be manipulated mathematically it does not count. All this is another example of her attack on materialism in economics.

She continues: "The main problem, though, as I said, is that the insights of poets and tale-tellers and historians and philosophers from the beginning into what human happiness actually is have simply been bypassed." Meanwhile today's intelligentsia critics of the results of bourgeois trade bemoan a 'golden past' that never existed. By real measures people today are enjoying much better living conditions. She produces much historical evidence.


Chapter 8 -And the Poor Won
The claims of critics that the 'poor' are worse off are false. She writes, "Nor during the Age of Innovation have the poor gotten poorer, as people are always saying. On the contrary, the poor have been the chief beneficiaries of modern capitalism."

She provides more historical evidence. And she notes the obvious, that in any distribution there by definition will always be a lowest quarter and 10%. And where they lag it is due to political measures - dictators and gangsters taking from everyone.

She switches to a different topic - a discussion of 'capitalism' and what it really is all about. She correctly links the reliance on the term 'capitalism' with the false belief that the 'betterment' the explosion called Industrial Revolution was enabled and caused by accumulation of large masses of 'capital'.

It was not. See Bailyn and Gordon They show that significant innovation was achieved without much capital at all, by redeploying retained earnings. For example, Whitney's revolutionary cotton gin was so easy for anyone to make that he could not enforce his patent. All the other early machines - and the harnessing of water power were easily made (once their idea was created). It was only with the first canals and larger railroads that significant capital was required and then it was contributed in small to medium amounts from many investors.

She continues, "Nonetheless the economists since the eighteenth century have favored the notion of piled-up capital as the maker of modernity, because it emphasized cost, about which they are expert, and because it is easy to describe statistically and mathematically." She recommends using a different and more valid term such as 'innovation'.


Chapter 9 - Creative Destruction Can Be Justified Therefore on Utilitarian Grounds
Dr. McCloskey here takes up Joseph Schumpeter's famous concept and buzz word, "creative destruction "She gives examples of extended chains of successive destruction of previous products by succeeding better ones, with the accompanying bankruptcy of some of the earlier producers. The process is not 'zero-sum' in which there is no net gain, but rather an expanding total 'betterment' for society. The well known larger pie. But this is only a utilitarian concept. She cites James Buchanan and Gordon Tullock - A Calculus of Consent and John Rawls - Theory of Justice. And also discusses the problem of envy - read Helmut Schoeck - Envy. These authors and Hobbes bypass the full contribution of the seven virtues to real ethics and base ethics only on utilitarianism.

Next, she discusses 'profits' coming from buying low and selling high. That is the essence of a successful merchant - but also a moneylender. And it is the essence of Adam Smith's argument for trade and change from 'mercantilism". Now we have Arnold Kling's excellent book - Specialization and Trade


Chapter 10 - British Economists Did not Recognize the Tide
The chapter is a critique of economists and a note that in the early 19th century they did not recognize what was taking place around them. Well they still do not. She cites of course Malthus.

She writes, "The economists then believed, as man of them do down to the present, that they possessed a complete theory of the social laws of motion." But the early economists were theorizing before the results were in.


Chapter 11 -But the Figures Tell
Dr. McCloskey disputes the authors who claim the major expansion did not occur until after 1848. She claims it was taking place already in the 18th century. I agree with that. The chapter is full of correct assertions about the expansion, but one must read more detailed histories to find the specifics.


Chapter 12 - Britain's (and Europe's) Lead Was an Episode
Now we come to the mandated politically correct discussion about Europe's real 'backwardness' in comparison with the Chinese for centuries. No fair to attribute too much if anything to Europeans themselves. The Chinese had it all and the Europeans copied. Well, they did copy - such industries as silk by smuggling the silk worms out of China. But seems to me that Goldstone, Pomeranz and the 'California School' go too far. Books such as Ann Paludan's Chronicle of the Chinese Emperors tell a vivid story of internal decay due to the combination of highly centralized personal political power with decay of that same personnel in weak emperors and conflicts between eunuchs and mandarins. And Peter Frankopan's The Silk Roads and Tonio Andrade's The Gunpowder Age, provide much specific detail.


Chapter 13 - And Followers Could Leap over Stages
The story continues. Dr. McCloskey opens this chapter with: "At any event the results of the compounding of ancient Chinese (and Arab and Ottoman and Inca and African) inventions with the modern burst of European creativity lie around you now..."
This assertion is not backed up with much evidence of these 'inventions' by other than the Chinese.

No matter, her main point is valid - progress in various countries does not proceed stage by stage as some authors like Walt Rostow believe because the 'late comers' simply jump over intermediate stages to adapt the latest technology. So, as she notes, "the tree-like and stage-dependent metaphor that characterizes modern 'growth theory' in technical economics is misleading." Moreover, "The other popular and unhisorical metaphor is of a footrace, in which, naturally, countries that start later must take longer to catch up." She contrasts the correct concept of 'comparative advantage' with the popular but incorrect concept of 'absolute advantage."

Comparative advantage is the core of the concept of specialization and trade - free market trade. And it is continually a source of conflict among politicians (see election 2016) (see Kling for a very clear discussion.) So Dr. McCloskey turns to a lengthy argument with economists and historians who dispute this basic economic theory. She takes on David Landes in his The Wealth and Poverty of Nations, for his refusal to read an Economic 101 text. Well, although I agree with her on comparative advantage, I would not recommend anyone believe a lot else in a basic academic economics text - Samuelson comes to mind. She disputes with the well-known economist Lester Thurow as well. Nor does Lou Dobbs understand. For six more pages she elaborates on this concept.

Returning to borrowing of ideas, she writes, "China and India, in other words, can take off the shelf the inventions laboriously developed by the Watts and Edisons of the past three centuries."

Yes, and they can steal new ideas that have not yet even been put into production in the U.S.


Chapter 14 -The Tide Didn't Happen Because of Thrift
This concept is very significant. Dr. McCloskey cites several dictionary definitions. Then she links it to the cardinal virtues - temperance and prudence - both are needed together. She cites examples of recommendations to be thrifty from various cultures. Next she writs: "Thrift in the sense of spending less than one earns and thereby accumulating investments as a capital sum is again a matter of accounting" .... and "abstaining from consumption' in the economist's useful way of putting it, you necessarily save." She describes the necessity of the farmer whose crop had a very low production to save a considerable part as seed for the following year. Her point is that she believes the opportunity to save other than to invest in the next year's crop was limited. Innovation came first, the idea that putting some small part of this year's production into investment to create a new product could be profitable.

The common belief is that 'thrift' means saving by everyone, especially by consumers. That is what the problem is that Dr. McCloskey does not address directly. Individuals have one or both of two roles - producers and consumers. All producers are also consumers, but most consumers are not producers. Consumers as such do not and cannot 'save' because any money they have left in excess of what they have spent actually came from production somewhere else. Only producers can save because real saving is retained income. And out of that retained income then capital can be created. Thus she is correct that the capital used to finance the explosive increase she describes did not come from the meager funds remaining to consumers. It came from producers and via the new financial mechanisms created by the Dutch and copied by the English. But once the new financial institutions wee in place, financial capital was everywhere. Note the frenzy of even servants to invest in dubious securities such as the South Sea fiasco.


Chapter 15 - Capital Fundamentalism is Wrong
Dr. McCloskey continues, "Innovation, not the sheer piling of productive investments, dominates economic growth." She does not agree with the idea that it was a large increase in the 'stock of physical capital that accounted for a large part of the rise in output per man hour, workers were able to produce more because they had more capital to work with''.

I believe she is right because they are wrong to consider 'capital' to mean physical - material - things such as tools and machines. She is right to state that the 'betterment' was not due to 'piling up' of physical capital - but that does not mean capital was not critical. The capital was financial and it was available in large amount on the spot, by the credit facilities of the new Bank of England. Throughout, she stresses the fundamental importance of 'ideas'. And I believe the most important of all the new ideas of the bourgeois was the creation of the bank credit creation institution and mechanism under their own control, which took the place of the sovereign as the sole source of financial credit.
I do not see, as she writes, that "The business cycle begins in the late eighteenth century, just when innovation becomes important. Earlier ups and downs in the economy were dominated by wars and harvests, not by cycles of optimism and pessimism about innovations." Seems to me rather than this psychology it was cycles of expansion and contraction of credit.

She writes ,"The case shows in Feinstein's own splendid table of investment as a share of gross national incomes of a dozen countries 1770-1969. The claim is that investment was 'crucial' for innovation." Seems to me that it is not 'savings' but retained earnings that was important.

She writes: "Rates of investment and saving rose as a result of innovation." Well, of course, it was a circle, innovation was accompanied by retained earnings ( earnings not consumed promptly) and the retained earnings were what enabled more innovation plus much replication of what had been innovated (more new spinning jennies - more cotton gins - increased numbers of the same, new, innovation .)

She continues: "Capital fundamentalism, in short, has been rejected scientifically, despite echoes in the minds of economists, who want it to be true." A rather snide put down here. But what has been 'rejected', it seems to me is a mistake in the content of the term' capital'. As she notes, herself, "Yet when the prospect for innovation is large, the capital to exploit the innovation is easily gotten by loan." Exactly the point, financial capital, not piles of bricks as she calls it. Looking at the frantic efforts of English people of all classes in the 18th century to 'invest' and 'invest' (for instance the South Seas fiasco) it is clear that capital was available, Due to the new Bank of England, for the asking. But financial capital was NOT so readily available and not at the disposal of the bourgeois, in prior centuries. The Exchequer was even required to use 'Talley sticks' for money.

Yes, as she writes: "what chiefly mattered in causing the innovation, unclogging the channels of ideas, was an entirely new honor and freedom for the bourgeoisie."

But, again I claim, the critical idea was for the bourgeoise to create and control the expansion of the national money supply via bank credit. And this was enabled because the new King William III was focused on exploiting his new kingdom to enable expansion of his wars with the hated French. (See Kwarteng and Acemoglu) And what gave honor and freedom to the bourgeoise was first the English Civil war and then the Glorious Revolution.

Next comes discussion of the famous Schumpeter. She writes that he, "defined capitalism variously at various times. His definition in Business Cycles (1939) was 'that form of private property economy in which innovations are carried out by borrowed money.' He is thinking of the new Banks of Holland and England.

My thought is that 'capitalism' came with the practice of producers reinvesting their retained earnings to finance their efforts at innovation. But then borrowed money -credit - was necessary for rapid expansion of the deployment of the newly innovated result of the idea, much more rapidly than could be accomplished by only re investing the increased retained earnings. So Schumpeter noted a part of the process. But Dr. McCloskey is wrong to write that if Schumpeter was correct we should see business cycles dating back to late medieval times. Well we DID see waves (not cycles) of credit expansion and collapse and bank failures.

She claims that, "Finance and saving and investment cannot have been crucial or else Florence or Augsburg (or Athens or Beijing or Istanbul ) would have innovated us into the modern world). Please, please, no strawmen - none of those places had the combination of bourgeois power over the financial system and political power on which she bases her argument. She continues, with the claim that anyway 'the rise in savings was too modest to explain much at all."

She should look at the extraordinary massive increase in the British national debt between 1700 and 1815. That debt was the counterpart to massive expansion of credit as part of the money supply. See Acemoglu, Kwarteng, Ingham, Morris and Martin). and the result was huge also. See Trentmann


Chapter 16 - A Rise of Greed or of a Protestant Ethic Didn't Happen
Dr. McCloskey's litany of dispatching each of the many other claims about the origin of the 'betterment' the trade-proven innovation continues with the popular ideas that is was 'greed' or the Protestant Ethic. She easily note the existence of 'greed' and a central human motivation that has nothing to do with her 'betterment' or capitalism. Still, it is stressed by leftists more and more today. She dismisses Marx and Wallerstein and the whole of ancient philosophers like Plato and Aristotle, plus medieval churchmen like St. Thomas Aquinas.

But she writes, "For all Marx's brilliance - anyone who does not think he was the greatest social scientist of the nineteenth century has not read enough Marx, or is blinded by ideology or by the appalling effects of Marxian writings on the politics of the twentieth century - he got the history wrong."

Well,, the greatest social scientist 'got the history wrong' - not only that, but the economics, sociology, politics, and everything especially morals wrong. See Muller. She excuses Marx on the grounds that he could not benefit from the great learning about history that developed after his time.

Max Weber comes next with his 'Protestant Ethic...' Dr. McCloskey offers the idea that "what seems to have charmed people about it is that it combines an idealist focus on 'spirit' with a materialist and Marxist focus on accumulation." We know that despite desperate defense from the likes of Bradford DeLong, Weber has been debunked, but not the ammendments proposed by Richard Tawney, whom she does not discuss (See Enterprise).


Chapter 17 - "Endless" Accumulation Does Not Typify the Modern World
Dr. McCloskey takes on another of the standard 'causes'. The claim is another variation on greed. We can agree with her directly. But the chapter is interesting because she shows that Weber actually read and believed the tales told by our own Ben Franklin. She concludes: "There is no historical case, however, for accumulate, accumulate being peculiar to modern times."

But Trentmann indicates there was a very extensive expansion in the amount of personal property during McCloskey's period of interest.


Chapter 18 - Nor Was the Cause Original Accumulation of a Sin of Expropriation
Another typical, standard charge from anti-capitalist authors that Dr. McCloskey deals with easily.
A choice comment here. "People seem to be mixing up financial wealth and real wealth. Financial wealth in bank account is merely a paper claim to the society's real wealth by this person against that person."

Great! Yet we see the false idea repeatedly in such as Forbes and Fortune Magazine's annual listing of the 40 or 100 most wealthy. Examination of the lists shows that most of these folks owe their place on the basis of paper- and their assets are someone else's liabilities. She continues, "The paper claims are merely ways of keeping track of who owns the returns to the capital. They are not the real physical or educational capital itself."

So true, so important to get people to understand

But then she digresses into a comment about the failures of Spanish Kings Philip II, III and IV, - 'who after all were the principal beneficiaries of the treasure fleets the English and Dutch and French privateers and pirates preyed upon - would have financed industrial revolutions in Bilbao and Barcelona instead of obstructing them.".

I disagree for several reasons. First, the Spanish monarch only had claim on 20% of the silver and gold delivered at Seville. So what happened to the other 80% that was spread by merchants throughout Europe? What happened is that the relative value of silver collapsed so much that European silver mines closed from bankruptcy. As Adam Smith noted one could hardly get rid of the silver, there was so much. So the Spanish kings' silver lost relative value so much that his soldiers demanded payment in gold, and the exchange process gave the profits to the Genoese bankers. Second, plus of course, the ideology of the times demanded that the Spanish kings defend both Western Europe from the Ottomans and the Catholics from the Protestants ( plus of course from the Catholic French). And as well, the Spanish kings had very weak power over the local governments in Spain, And third, 2/3 of the silver mined in the Americas went to China.

However, her main point is excellent. That economic expansion does not depend on saving (the concept of what is saving itself is questionable). And it does not depend on stealing or capital accumulation. She lists some of the most prominent economists who have it wrong. She continues, "Schumpeter, though, did not fully appreciate that even in the twentieth century of wide markets, and big laboratories a company can expand without massive loans, rather in the way that the first innovations of the industrial Revolution relied on retained earnings, trade credit, and modest loans from cousins and scriveners and solicitors."

We see it every day with all the 'unicorns' sprouting around Silicon Valley and Austin and Boston. And whose creators are found in "30 under 30" and "40 under 40". lists


Chapter 19 - Nor Was It Accumulation of Human Capital, until Lately
Dr. McCloskey notes that modern economic historians such as Hobsbawn do not give sufficient credit to the expansion of human capital since mid 19th century. But still, it was not large quantity of human capital in the early 18th century that generated the innovation. The reverse was it - massive innovation gave value to the human capital creating it. In this chapter she digresses to comment on educational attainment in various locations.


Chapter 20 - Transport or Other Domestic Reshuffling Didn't Cause it
Another common 'cause' set to rest here. "The economic historians have not so far discovered any single material factor essential to British industrialization." Well, one could quibble on that word 'single' and claim a cause was the close interaction of a whole series of material and non material factors. She singles out transportation as a common potential cause because it is well known that internal transportation in Great Britain did improve significantly. But even so, not enough, she claims. The detailed information she provides is interesting in itself. Likewise, she notes, the agricultural enclosure movement was no cause.

She also discounts specialization and the division of labor as a cause. She delves into 'marginal productivity theory'. Surprisingly, she does not mention that specialization of labor was common in ancient Egypt, Greece, Rome and everywhere.


Chapter 21 - Nor Geography nor Natural Resources
Dr. McCloskey tackles two more common 'causes'. and turns to Jared Diamond's best seller, Guns, Germs, and Steel.

I have to laugh at her remark here, "Wait a minute, I'm the economic historian here. Who's this guy?" I am sure she is kidding, but the sentiment is all to prevalent among many economists, and historians also for that matter. But the strengths in Diamond's analysis do not relate directly to McCloskey's thesis except in the general way that it includes the concept that geography and resources (Eurasia versus Western hemisphere) might be then applied to the geography of northwestern Europe. He also discounts Jeffrey Sachs' ideas about geographical climatic zones. But more directly, since Dr. McCloskey claims that 'ideas' are so critical, it seems to me that geographic location is a if not the major factor in determining what 'ideas' individuals believe. This can be shown even on a local scale, for instance, the different ideas of people in Western Marland versus the coastal area and between people in Wesst Virginia and Tidewater Virginia. Surely the Dutch fighting to create land versus the sea had different ideas than Italians living in ancient hill cities.


Chapter 22 - Not Even Coal
Another 'cause' to the trash can. Dr. McCloskey opens with dismissal of the insistence by Pomeranz, Allen and Jarris that coal was THE cause. Its location and usefulness to generate energy were the essentials for industrialization. She agrees that the use of coal was important but alone was insufficient as the cause for the massive 'betterment'. She is kind enough not to mention that such strivings to find this kind of 'cause' are part of the ideological effort to explain away any credit for European achievements. But the argument is very complex. Coal clearly did have a significant role in enabling the achievement of rapid industrialization. She gets into the issue of relative costs of coal and labor. But more critical was the relative cost and usefulness of coal versus charcoal and the new method of converting coal into coke. (See Munro and Mokyr essays in Enerprise.) One analyist commented that the huge expansion of the population of London in the 18th century could not have happened without the great expansion of coal production to provide heat.

She repeats her theory, "In the event, a vastly fuller complement of riches came from bourgeois dignity and liberty inspiring innovation in machines, both physical and social."

I don't see 'inspiring' but rather 'enabling'. Inspiration is fine, but it has to have something concrete to work with.


Chapter 23 - Foreign Trade Was Not the Cause, Though World Prices Were a Context
Here Dr. McCloskey has to deal with the standard descriptions of the 'triangle trade' as well as the details of the methods which brought such huge profits to Dutch and then British merchants.

Dr. McCloskey dismisses the thought out of hand by noting that "After all, trade is merely the moving of stuff from one place to another.... "Yet shuffling stuff about for a modest productivity gain, even if a large gain in the margin of profit, is not the same thing as revolutionizing the means of production. Shuffling resources about is not the way to get the cautiously estimated factor of sixteen."

But if the excess of local production to the need for it locally cannot be 'shuffled away' there will be no need for 'revolutionizing' the means of production. For production to expand the market for it must expand as well, either or both internally or externally. When the complex process of converting cotton seed into shirts supplied all the shirts the British could possibly wear, the excess had to be exported. When the sugar plantations in the West Indies produced vastly more sugar than could be consumed there, it had to find a profitable market some where else. After all, the purpose of production, as Dr. McCloskey believes, is consumption, a sixteen times increase in production must result from as well as cause a sixteen times increase in consumption - as Trentmann describes. It is no coincidence that the early retail products of the beginning of industrialization were clothing, (after the prior essential expansion of agriculture) the relative shortage of which in comparison with immediate demand would be obvious to innovators. And much later, Henry Ford recognized that in order for him to produce and sell orders of magnitude more of vehicles they would have to be affordable to many consumers. But she shifts the argument into discussion about the nature of British labor force. And she completely ignores the impact of the relatively large influence on Brfitish commerce of its American colonies, both North and Caribbean.

She admits a 'correlation' but finds excuses to deny the significance of trade. She claims, without evidence, that there was more than sufficient trade in ancient times to create industrialization. Of course, but what was lacking was the desire or need to industrialize. Perhaps the Roman import of over 250,000 human robots a year had some influence on their thinking about industrialization via mechanical means.

She writes various arguments denying the significance of trade, but in the final few pages completely switches her position without noticing it. Her final sentence is, "And relative prices, as he also observed were increasingly an international affair." How could that be so? Because the market in which the goods produced in one place were consumed in another due to the mechanization of international trade.


Chapter 24 - And the Logic of Trade-as-an Engine Is Dubious
Dr. McCloskey continues her crusade against the significance of trade (she without our noticing it, conflateing 'trade' with 'foreign trade') with complex mixtures of examples that also mix the two. Her fundamental argument throughout is the importance of ideas as the engine for economic expansion. Yet, when she addresses some dominate ideas of the 18th century ruling class that disagree with her she simply writes that they were wrong. But trade itself also was the result of ideas, namely that assets could be exchanged profitably across oceans of distance. Reading the contemporary accounts one senses that such ideas were sometimes slow in developing. Or that initial efforts failed due to external, unexpected causes.

Her repeated belief here again is. "Trade then was important as a context for British growth (and Chinese growth and many other growths, too) "Yet trade was not an engine of growth. Trade explains some of the patterns of production, but not the size of production."

Here is a typical argument. "Exports to French colonies in the eighteenth century, for example, are said to have put to work previously idle French workers. (I repeat: why did not domestic demand for carriages and servants have the same effect?)

Well, I would presume there was NOT that much demand from the small aristocratic set for ever more carriages and more lazy servants. Besides, they were already strapped for income. And according to her own economic theory there was much more profit to be made from the international trade. Some of her other arguments are either circular or mutually exclusive. The relationship she ignores is between trade and production. Expanding trade comes from expanding the market in which production can be traded, a necessary circumstance is to enable the producer to see that he can exchange all his production, otherwise, why produce, let alone increase production.

In another argument she dismisses is O'Rourke statement about British trade when the sovereign " 'needed revenues to secure trading opportunities for its merchants by force if necessary'". No, she writes, "trade is mutually beneficial, a matter mainly of cooperation not competition".

Of course, but the 'force' O'Rourke is thinking of is not against the foreign merchant trading with the British merchant, but against the political powers that tried to inhibit or prevent that trade. Yet, when it comes to discussion of the Dutch in Indonesia she is quick to agree with critics of Europeans that the Dutch were using force to obtain the spices and all to take to Europe.

But whether or not the British or Dutch sovereign 'profited' in the long run considering his military expenses is another issue. She summarily claims that the bourgeois in their support of nationally based warfare were wrong. (But they were 'right' in everything else?) But 'wrong' or not one result was that Great Britain clearly became a world power far above what one would expect from a small island with relatively limited resources. And it occupied large overseas areas to which it exported not only goods and services, but also tens of thousands of citizens, thus reducing local unemployment during a large increase in population. I believe Drs. Findlay and O'Rourke have the better of this argument.


Chapter 25 - And Even the Dynamic Effects of Trade Were Small
Again, she means 'foreign trade'. But in contrast she repeatedly notes the expansion of the economic world which in effect eliminates the term, 'foreign'; as she sometimes notes, trade is trade, whether down the street or across the ocean. So much of this chapter (even more than is already typically large) is devoted to argument with other economists over theories proposed in books one has not read, that is, it is difficult to evaluate her claims. And even more than in other chapters she is discussing the relative usefulness of various 'models'.

I do not put any store in 'model's of any sort as applied to any academic field. A 'model' is nothing more than a set of math equations, as she notes herself later on. These attempt to quantify the relationship between an input and output - and the assigned quantity for inputs depends on presumptions and estimates - and so do the relationships presumed within the equations.

And her diagram is meaningless beyond depicting her contention that the curve depicting the modern economy should be 16 times larger than that for 1780. By the way, does it represent this 16 times by having the X and Y intercepts measured for modern at 16 times the number size for that of 1780? It appears so, making the area under the later curve much greater than 16 times that under the 1780 curve.

As an expert in the concept of 'marginal' relationships she should not dismiss out of hand the cascading effects from a 'small' initial cause.
Lets consider one of the best documented example of trade. English with Russians. A chartered English merchant company secures a monopoly from the sovereign of trade with Russia. On this basis the merchants secure credit in pounds against future assets from local merchants and investors (including court officials) and exchange the credit (secured by the investors) for goods they believe will be desired in Russia. They take the goods by sea to Arkangel or Murmansk. There they meet Russian merchants who have a charter of monopoly for foreign trade from their sovereign. The English are prohibited from dealing with any other Russians. The English exchange their goods for rubles. They receive fewer rubles than the Russian merchant knows he can obtain by future exchange of the goods in the Russian market. (Profit 1 to Russia) Then the English exchange these rubles with Russian merchants for Russian goods (assets). Again, they have to give more rubles than the Russian merchant needed when he exchanged rubles on his market for the goods. ( Profit 2 to Russia). Of course the English merchant knows all about this. But for him those rubles were worthless themselves, merely used as the medium of exchange. They did not even have to be represented in coin but could have been shown in an accounting ledger. He returns to England and exchanges the Russian goods for English pounds - if successful, he obtains enough pounds to retire the credit=debt paper and has enough remaining to pay also for his ship and labor of the crews, plus some profit. Since he did not have to exchange capital for the goods in the first place, his percent profit can be significant. And this was even more profitable for the English companies trading with Turkey and South Asia.

Let us note here another fallacy 'value ' This trade did not increase 'value' because 'value' is not an attribute that can be attached to a material or non-material asset, object, service, or personal condition. "Value' is a psychological phenomena - it is created by the relative desirability of the asset to individuals at a specific time and place and in relation to all the other assets (material and non-material) available and desired by individuals. Thus the 'value' of a fur coat in Russia in 1600 is relative to all other assets desired there, while its 'value' in London is also relative to all other assets in 1600 there. But in Arkangel or London it is the same fur coat capable of keeping an individual equally warm in both places. And a significant part of its 'value' may reside in the relative prestige it may confer on its owner in each place. 'Value' includes both material and non-material considerations - that is 'value' reflects more than economic considerations.


Chapter 26 - The Effects on Europe of the Slave Trade or British Imperialism Were Smaller Still
Dr. McCloskey cites various specialist historians who note that the British gained very small profits from the slave trade. I thought that was always obvious, yet she devotes several pages to discussing it.. Then she turns to 'imperialism'. I thought that was obvious also, despite Lenin's propaganda. More pages are devoted to this non-starter.


Chapter 27 - And Other Exploitations, External or Internal, Were Equally Profitless to Ordinary Europeans
Dr. McCloskey cites the Dutch, British and Germans for their 'exploitation' of colonies, and notes that these did not produce much profit nor expansion for the ordinary people, except that it prevented increased unemployment in a rapidly increasing population. Certainly true, in the economic sphere, but there can be political 'profit' as well. It has seemed to me that the only academics who claim the colonies are a cause of European economic expansion are folks who insist on denouncing European - euro-centric hegemony.

However, she again misunderstands the problems of the Spanish and Portuguese monarchs despite the influx of silver and gold. There were complex causes for the continued poverty in Spain and Portugal. This section is the one in which she shifts from chapter 24 and notes that the Dutch indeed did use force in Indonesia. Whether the prices in the exchange were 'derisory' in local terms there is not proven. Nor is the relative expenditures of the Dutch government versus the total 'profits' obtained.

She writes,"Sic transit all manner of claims that Western wealth is founded on the despoilment of the East or the South. Rich countries are rich mainly because of what they do and did at home, not because of present or past foreign trade."

Unquestionably correct, as I pointed out above the profits of merchants from international as well as local trade are created at home. But she is too reserved to comment on the ideological basis for those who believe in European evil. Instead she too much in degree tends to agree with the idea of despoilment as a disaster for the non-Europeans, just that it did not result in the European economic expansion. Of course she has to digress into a discussion of racism and apartheid in South Africa and the plantation slavery of the southern states in U.S.


Chapter 28 - It Was Not the Sheer Quickening of Commerce
Now we get to the arguments over the nature of money and its relation to the real economy. De. McCloskey's explanation on this should be widely adopted by all commentators today. The misunderstanding that she corrects is a major cause of public and failed political beliefs and actions today. She points out a false connection between 'commercialization' and 'monetization'. She stresses that, "An economic historian, though, can tell you that the European economy, like the Greek or the Chinese or the Egyptian, has always been 'monetized'". (See also Enterprise and the authors I cited above) She notes that at all times and places in which trade took place among at least merchants calculations were made. But the form in which money was expressed and its origin in the given society were not always the same.

She later on writes, "An economist will tell you, therefore, that ( somewhat surprisingly viewed from outside economics) the history of money is not the same thing as the history of prosperity, and that money certainly did not cause industrialization." And, "Money, the economist says, is a veil.".

But further on she writes, "Yet the amount of silver and gold money had nothing to do with the failing ratios of money wages to money prices, which is the falling real wage, pence to the worker per day divided by pence per loaf he eats." In this she allows the reader to equate 'money' with currency. A major error. She correctly mentions ONE temporary cause, relative population growth. And she is right to disagree with Joyce Appleby's 'inflation caused by high food prices' - first high food prices is a result, not cause, of inflation and second, if 'relative' which Appleby does not claim it was, that isn't inflation either. But deeper, the specialists on the nature of money cite this theory of economists that 'money is a veil' as a major problem and cause of misunderstanding of the social role of money.

But, as David Fischer shows in his The Great Wave: Price Revolutions and the Rhythm of History, going back to 1200 these recurrent 'waves' not 'cycles' of dramatically increasing prices were generated by a variety of causes and population growth versus agricultural productivity was one and also the reverse, rapid decline in agricultural output due to weather. And other causes as well, such as the massive increase in quantity of silver from America after 1570's which made silver so cheap it forced the closing of European silver mines. Adam Smith actually noted that silver had become so 'cheap' that one could hardly give it away. And of course that is also why the Spanish soldiers in the Netherlands demanded to be paid in gold and not silver. David Fischer describes 5 major 'schools' of theoreticians proposing different principal causes for price increases and decreases.

Dr. McCloskey is right to question 'the story of 'monetization'" There was plenty of 'money' meaning a means for enabling exchange, and not only currency. As she notes, people wanting to trade real assets find a way to do it but NOT barter (as she hints). There is always a medium for exchange, like, for instance 'Talley sticks'. Plus, as she notes, modern archeological discoveries show that England (and Scandinavia) and Europe generally had much more silver coinage than previously believed. But that does not mean that monarchs, sovereigns, had enough money themselves to wage their wars. They were constantly trying ways to make what money (coinage) they had pay for more, or obtain credit. Still, she writes about 'monetized' in terms of coinage, when, for instance the Carolingian 'pound' was used as a measure of account for centuries without a single 'pound' being actually minted.

She is right to quote Max Weber, ''The impulse to acquisition, pursuit of gain, of money, of the greatest possible amount of money... has been common to all sorts and conditions of men at all times and in all countries of the earth, whereever the objective possibility of it is or has been given'". She credits decrease in "transaction costs" as a stimulus for increased commercial activity. But she does no accept 'growth theory'

But througout the text and in the notes and bibliography I do not see reference to the huge library of specialist books on the history of money and banking. To incorporate this material here would expand the discussion too much, but I have mentioned several leading authors.


Chapter 29 - Nor the Struggle over the Spoils
This is one of the most important chapters. In it Dr. McCloskey takes on post-Marxian authors, and focuses much on the great French historian Fernand Braudel. (See vol 1, vol 2, vol 3 of his master work) She notes especially his vol 2 which she cites as "the most full exposition of the idea by a historian that the modern world came naturally out of the sheer expansion of commerce." Her discussion is lengthy and demonstrates that he was still too much influenced by Marx. For instance, she writes: "What Braudel gets wrong because of his marxisant, rise-of-classes rhetoric is his claim that there is a (dividing) line between normal marketers and big time capitalists." She avers that 'all' participants in the market are 'capitalists'.

Well, maybe not all, counting out the crooks and government bureaucrats (when there is a difference).

She is right to cite many of Braudel's anti-capitalist views. And worse for us now, such Marxist anti-capitalist presumptions dominate the thinking of many economists and politicians. But there are many other historians who describe the economic history of Europe in the Middle Ages and early modern era whose work shows the process of expansion - some even cite a 'Commercial Revolution'. (see Spufford and Landes.


Chapter 30 - Eugenic Materialism Doesn't Work
Dr. McCloskey begins with, "An extreme materialist hypothesis explaining the Industrial Revolution would be simply genetic." Very true, but then she reveals her own bias by writing, "Scratch a modern member of the right-wing clerisy and you will often uncover such flatly racist ideas." I imagine the 'often' is meant as a cover. Anyway the chapter is about broader examples of total materialist thinking in the excuses prepared by so many intelligentsia members. She begins by disputing Gregory Clark for his thoroughly materialist theories. But Clark serves as an appropriate example of general materialist thinking today. Fundamentally, since Marx, any efforts to claim ideas have results are met with the argument that ideas spring from materialist sources. She comments that today even official Marxists don't depend on such total materialism. Nevertheless, she feels it necessary to claim that Clark is a fine economist and, "Much of Clark's book in other words, is incontrovertibly excellent, a review for outsiders of the quantitative side of what economic historians have learned since, say, Karl Polanyi in 1944."

She bases this comment on belief that the world could and should have industrialized otherwise but did not. "All the economic historians whom Clark is summarizing agree that the escape from the Malthusian trap is the most important economic event in world history." One can agree fully with the view that genetics not only played no part but that claiming that is did and does is wrong without believing that the world was in a 'Malthusian trap' for millennia prior to 1800. The rest of the chapter is a complex of both ideas.


Chapter 31 - Neo-Darwinism Doesn't Compute
Well, this chapter is an extension of the previous one - neo-Darwinism is another example of belief in genetics. She again attacks Clark, extorsively for a full chapter, and this time begins correctly. "Clark insists dogmatically that the only valid evidence for a hypothesis is quantitative and materialist. "

She apparently believes his book has some popularity because she devotes much effort in explaining why it is full of error. Among others she zeros in on his diagrammatic explanation. "On event 4, the Enrichment of All, Clark's Quantitative evidence is better, but entirely conventional. The numbers concerning the Enrichment of All, about which, to repeat, we post-Polanyi economic historians all agree, and on which all of us have worked, and of which it is most important that we persuade noneconomic intellectuals, and especially the Polanyists among you, are nailed, Good for Clark." She continues with more attacks, but lets stop a moment.

One hardly knows how to deal with this condescending passage. Not being an intellectual but a simple student of history including intellectual and economic history I (on my own reading) dismissed Polyani years ago without knowing that at one time any academic economists could have believed his theories. But that education also made me skeptical of claims that 'rigorous' quantitative methods would reveal hidden secrets. So apparently Dr. McCloskey is urging us to believe her attentively, when she approves of some things but not of others. It seems she is all for results based on quantitative models but not on others. Perhaps not all her models are 'materialist'.


Chapter 32 -And Inheritance Fades
More attack on Clark. His book must be a 'best seller' in her domain. I should get it from the library (certainly not from the bookstore.) In paragraph after paragraph she proves him wrong. Yet, in a previous chapter she admired his work. Lets just skip this chapter.


Chapter 33 - Institutions Cannot Be Viewed Merely as Incentive-Providing Constraints
Now Dr. McCloskey switches to deal with the 'institutions matter' crowd, starting with Douglas North (mentioned many times before.) She has much to say about Dr. North's background and later focus on 'transaction costs' as conceived by Ronald Coase. For North 'transaction costs' are greatly influenced by 'institutions' that is the organizations that increase or decrease them . She notes this and North are totally "Samuelsonian" economic promoters of the infamous Mr. 'Max U' . That is the concept that man (generic) is motivated exclusively by economic advancement through his efforts to maximize Utility.

Thankfully I escaped from reliance on my economics text, yes, the famous book by one Paul Samuelson, that is still on my shelf.

Dr. McCloskey provides a useful tutorial on what the full Samuelsonian concept is and involves and why it misses so much of real human activities and motivations. And she pegs North as a participant in Samuelsonian economic theory. Then she gets into 'agency theory' and relates this to the 'Chicago School' of economists who from her listing all fell into this presumption about 'economic man' that is the Mr. Max U who is the epitome of a prudence seeker, but nothing else. It is quite a list of well known economists. She devotes several pages to refuting the whole bunch. But I still wonder why she and others do not simply ask the 'economic man' believers to name specifically ONE real, actual figure in history who exhibited the relevant traits to the exclusion of acting also upon some of the other virtues she well describes.


Chapter 34 - And So the Better Institutions, Such as Those Alleged for 1689, Don't Explain
More on Douglas North and Max U (whom??) he claims can explain the modern world. - pure materialism of course. The very idea that 'man' focuses all his energy, skill and thought on 'improve their material status' is absurd. The ancient Greeks invested the myth of King Midas to show the ridiculous result at a time they were first coming to intellectual grips with the new form of money - currency. But, then she writes that, "North's main example of growth inducing institutions is the settlement of 1689 in England". She digresses into another discussion of Braudel's errors and then comes back to North's idea about the Glorious Revolution and introduction of the Dutch concept of national debt. She quotes North, 'how institutions played a necessary role in making possible economic growth and political freedom".

Seems to me that she is side tracked by this emphasis by North on 'institution'. It was not the institution, but the concept that created it, an idea that she would applaud as such. The idea, concept, was to link the source of private money to the sovereign who would act as the ultimate backer in exchange for the ability of private money to support sovereign expenditures. In other words the concept of the modern 'central bank'. This is the very same concept that directly linked the 16th Amendment to the U.S. Constitution to the establishment of the Federal Reserve Bank - that is placing the financial authority of the sovereign behind the credit issue by the private bank.

Kwarteng notes that this "Great Monetary Settl4ment" as Martin lables it, enabled the British (King William III initially) to finance his wars. And Martin shows in more detail how the process developed, while Whalen focuses on its application for United States economic expansion. And there are many more references.

Dr. McCloskey claims that 'capital' was not a significant cause of economic expansion, especially such rapid expansion, because it was so readily available. (This is circular thinking. It was the fact that it was then newly, readily available that made its availability a significant cause. But not only available but expandable and trustworthy.) Yes it was, but the 'Great Monetary Settlement" as Martin terms it, was the reason. King Charles II had put a Stop on the Exchequer a few years earlier due to shortage, sovereigns were always short of ready money to wage war, and previusly had to demand funds from others since their own created money was insufficient. Again, discussion of this involves the whole concept of credit.

So North sees a valid event but misconstrues its real significance, according to McCloskey, who then objects to this misunderstanding. She notes the event - the creation of the National Debt via the Bank of England but claims its financial and economic success was due to luck in war and good commanders. NO. She correctly notes that many sovereigns used what money they had without enhancing economic expansion. YES. She writes, "the argument confuses economic enrichment with military victory." YES, but so does she. But the real key was that this credit=debt system was not under control of the sovereign but of the very bourgeois whom she champions. It was private money, no matter what Locke wrote.

She does write, "What did matter was a change in political and economic rhetoric occurring about the same time that made the British state prudent in the financing of its wars of imperial adventure 1690 to 1815, as the Netherlands had earlier learned to be prudent..."

Well, seems to me that 'about' is a cop out. The two were contemporary for sure and intimately related. Seems to me that the 'betterment' depends on (a) the idea, (b) the will to try, (c) the fundamental belief in progress (d) the availability and control over essential assets, including financial. So what she sees as 'what mattered'. is correct but encompasses more than she sometimes claims as its critical core. And expenditure was 'prudent' because it was private money being expended.

Apparently, North makes private ownership of property a new and critical factor and McCloskey points out that private property existed from ancient times. She is correct, but makes too big deal out of proving it by devoting much more than necessary effort to the issue. But she is right to note that North's incorrect idea has its recent echo in Daron Acemoglu's' book which is also incorrect. He and James Robinson focus on 'property rights' as institutions rather than as concept.

Dr. McCloskey writes, "Acemoglu in short has gotten the history embarrassingly wrong in every important detail, and his large theme is wholly mistaken."

I agree. In their book (Why Nations Fail) in general they define processes as institution; such as slavery and even more generally as 'extractive institutions'. They write, "Institutional differences play the critical role in explaining economic growth throughout the ages. But if most societies in history are based on extractive political and economic institutions does this imply that growth never takes place?" Seems to me that using the term 'institutions' rather than 'processes' based on concepts (ideas) creates confusion. actually, they do use the term 'process' as well.


Chapter 35 - And Anyway the Entire Absence of Property Is Not Relevant to the Place or Period
In this chapter Dr. McCloskey turns to Richard Pipes (Property and Freedom) a well noted historian of Russia, who ventured out of his subject area to follow North into English history. She claims being 'picky' about his errors may be justified. But she admits that. "The Glorious Revolution surely had something to do with the Industrial Revolution indirectly, by way of the resulting freedom of discussion that made England into a land of conversation like Holland...". Note those well placed caveats "something' and 'indirectly'. But it is this 'freedom of discussion' that is central to her thesis - rhetoric after all is discussion. But she jumps in with "But it was not property rights that the Dutch transferred to the English." So North and Acemoglu are again wrong. Yes, they are, but lets focus not on their error about claiming importance for 'property rights' but rather on their error in not focusing on human rights. Lets, rather, give some credit to the Glorious Revolution and all related to it.

She proceeds to excuse Pipes in his error because his real expertise is in the history of Russia where, indeed, there was no private property during the reign of the Tsars. That happens to be my main field as well. And I dispute with Pipes that the whole problem of lack of property rights was due to the Mongols. No, without them, anyway, Novgorod was not such a 'powerful state' and would not 'have triumphed' against the Yaroslavichi. But Richard Hellie, whom she quotes, was correct. She then digresses past North and Acemoglu again to comment on various historians' description of steppe nomads. Back to Pipes, she correctly notes the errors in his effort to extend the idea that the sovereign was owner - that is of patrimony - of all the land and resources, including the people. BTW the Mughal conquerors of India did NOT control all of India.

Now she returns to the point. "But all this interesting historical assertion, whether true or false or merely memorable, is not relevant for explaining a change in Western Europe 1600 - 1800, or 1300 - 1900, or the lack of change in places comparable to Western Europe, such as Southern Europe, or China, or Japan, or the Ottoman Empire."

How true, Muscovy and before it Kievan Rus were quite different in many ways from Holland and England.

But I don't believe the places she lists were as comparable to Western Europe as she agrees to consider. They all had significant impediments to accomplish what happened in Holland and England. And for me, she then continues to expend more than necessary space refuting Pipes again. She turns to a commentary on our present 'administrative state' mentioning Richard Epstein. (Design for Liberty and The Classical Liberal Constitution). As I have long claimed, the modern 'state' (euphemism to legitimize ruling bureaucrats) does exercise much more power and control over the individual than any medieval or early modern ruler in Western Europe. She should mention Philip Hamburger - Is Administrative Law Unlawful? as well. Her concerted descriptions of the huge economic, political and social problems we have stemming from this 'administrative state' are the most important consequence of study of her three volumes.


Chapter 36 - And the Chronology of Property and Incentives has Been Mismeasured
Dr. McCloskey again begins with, "That is to say, to return to the theme of North and Weingast's work the political innovations alleged to lead to the financial revolution in late seventeenth - and early eighteenth - century Britain have no important connection to secure contracting - not even, as North and Weingast somewhat desperately put it, as indirect "evidence that such a necessary condition has been fulfilled':

Ok, she turns to multiple sources to describe the history of contracting. And she provides more tellingly wrong quotes from North on various aspects of 'state' activities. So North was wrong in what he chose to see as results or lessons from the Great Monetary Settlement. But, neverthless, this financial - political innovation did have very significant results in subsequent history even to today.

But Dr. McCloskey writes, "The model is of technological causation, the technology being caused by the coming of bourgeois dignity and liberty."

I disagree and find the causation not in the history of technology but in the history of money. So, yes, to the 'coming of bourgeois dignity and liberty, but also, yes, to the bourgeois creating their control over private money secured by agreement with the sovereign. She zeros in on a North idea about the ability of the English 'state' to finance war and she claims that is not relevant. She devotes several pages to discuss the British 'state' borrowing funds for war. This is backwards - not borrow but create. The 'perpetuals' in which the bourgeois invested were negotiable credit instruments -that is money - that was used then as a means of exchange, greatly reducing the necessity of using 'Talley sticks' or even coin, and, because they paid interest, they were more trustworthy over time than depreciating coinage.

She is correct to write, that the lowering of Dutch and British interest rates on the assets relevant to economic growth - private bonds - is to be explained by the abundance of loanable funds ("money') not by fresh commitments by the government to pay its debts - which worked in the opposite direction, if they worked at all.".

Indeed, that is the point, but from where came these 'private bonds' - well, they were not even 'bonds' but annuities - the Bank of England. And why were they accepted in exchange - that is trustworthy? Because in the 'Great Monetary Settlement' they were backed by the sovereign, although not created by him. It is this combination of private money and sovereign backing that has been the monetary solution to the repeated problems of medieval and early modern separation of private money-creating banks and defaulting sovereigns. Of course it has only been a successful solution where and when the sovereign continued to honor its commitment to that backing. And she notes repeated examples when various sovereigns defaulted. (See multible histories of money and Reinhart & Rogoff -This Time is Different)


Chapter 37 - And So the Routine of Max U Doesn't Work
In this chapter Dr. McCloskey get to basics. This is a chapter of argumentation with and between economists. She begins with Robert Allen who asserted that 'technology was invented by people in order to make money and therefor was an economic activity.'

A very telling quotation on two scores. One is the assertion that invention is motivated by desire to 'make money'. And the other is that economics is all about activities centered on making money. This is the mentality she has been objecting to (well fighting) throughout the three volumes. It is the mentality of the notorious Max U. Of course she is right. And her pages full of theory and theoretical examples are right also. She references the inherent shortcoming of Max U by citing his reliance exclusively on the virtue of Prudence, when real people also are motivated also by virtues such as courage, hope, temperance, justice, love and faith. (see her other volumes).

But what I want to ask is 'Has anyone actually identified a living (or deceased) human who is or was the example of this model, Max U.' Has anyone in history really acted in pursuit of an ultimate end motivated by the exclusive conception of achieving this 'utility function' as described in theory? Seems to me such individuals are rarer than dragons. I mention Cicero. The more I read of the history of economic theory (as opposed to history including economic events) - for instance Lawrence White's excellent The Clash of Economic Ideas, the more I recognize theological disputations similar to those of Franciscans and Dominicans at Universities of Paris and Cambridge in 13th century.

She writes, "I want to initiate a discussion to put the point another way, with my numerous friends in economics and even in economic history who have come to believe that all effects of ideas on the economy work mainly or exclusively or necessarily or obviously through incentive ..."
I believe we can leave this disputation (discussion) to these economic theologians.


Chapter 38 - The Cause Was Not Science
Well, here we are. "We are back to what actually happened 1700-1848, and then on to 2010 and beyond, a rise of income per person by a factor by the end, let us say very conservatively, of sixteen." The argument in this chapter is about the significance of 'science' that is development of scientific theory about nature as a cause of the expansion in living standards in the late 18th century. Dr., McCloskey says no, that the actual impact of what we might call 'pure' science came later. The ideas that resulted in the initial expansion were relatively simple and more of the type technical and engineering applications to solve apparent problems. Her chief disagreement is with Joel Mokyr, with whom she also has many agreements.


Chapter 39 - But Bourgeois Dignity and Liberty Entwined with the Enlightenment
The chapter relies on Dr. McCloskey's development of the importance of the 'virtues' in volume 1. In a wide ranging discussion with many economists from Goldstone and Mokyr to historians such as Landes she maintains that their various ideas about the causation of the great 'betterment' are partial or derivative. Everything boiled down to the enhanced status of the bourgeois exemplified in its dignity and liberty being recognized by society at large (and despite centuries of denial by aristocratic and clerical superiors).

She can't help throwing in a word or two about other purveyors of ideas. "But the sheer accumulation of learning also produces Oxford dons who almost never have an original idea and don't publish on the rare occasions that they do". There is more along this line.


Chapter 40 - It Was Not Allocation
Here another idea about causation receives a big NOT. To begin, "The main economic peculiarity of the explanations of the Age of Innovation examined so far is their premise that, until 1750 and the wave of gadgets sweeping over England, opportunities for profit were simply ignored. As I've said now repeatedly, that's not economically reasonable." And, she continues, the historical puzzle is why did not the events of 1750 and later in England not occur during previous centuries in places around the world. She recapitulates the many arguments previously addressed. She does note that the method of proving all other potential causes faulty to leave standing the favored one has its dangers. For one thing, she avers, there are immaterial and measurable causes also, that are ignored by materialists.

Allocation in her chapter title means the way the various theories about causation get 'shuffled' about like the shuffling about of the assets being discussed. Rather than 'shuffling' assets around, she claims. "It was instead, about discovery, and a creativity supported by novel words,. In terms of the seven principal virtues, that routine of efficiency that Samuelsonian economists love so passionately depends only on the virtue of Prudence. What I am claiming here is that discovery and creativity depended also on the other virtues, in particular on Courage and Hope.."


Chapter 41 - It Was Words
Dr. McCloskey writes: "In the beginning was the word. Free innovation led by the bourgeoise became at long last respectable in people's words." They soon were even called 'gentlemen'. And conversely, some of the already 'gentlemen' took up living by having jobs. And, "Surprisingly, such ancient attitudes (that is disdain for work) changes. In its rhetoric the northwestern European elite began to deem a bourgeois career honorable." More pages devoted to elaboration of this theme.


Chapter 42 - Dignity and Liberty for Ordinary People, in Short, Were the Greatest Externalities
Tis chapter is a summary of the central theory of the entire trilogy. Dr. McCloskey quotes Friedreich Hayek "' Nowhere is freedom more important than where our ignorance is greatest - at the boundaries of knowledge - where no one can predict'". Very much the same idea as George Gilder. She uses many terms of economist jargon, but the thesis is well supported. For instance "Dignity and liberty, to express the point in economic terms, were the Greatest Externalities.." She writes, "My theme in short is the true liberal one of the de la Court brothers" -- there follows most of a page filled with a list of famous economists.


Chapter 43- And the Model Can Be Formalized
Of course this would not be a reputable economics book without a model. But reading it is much fun. She begins by providing a diagram that depicts some of her points in visual terms. (Heavens spare us -She adds - "These could in turn be translated into a set of equations with time subscripts, differential terms, and so forth.') We are spared again as she writes, "In order to avoid a hopelessly confusing mass of causal spaghetti one can as it were subtract out two sorts of alleged causal factors (strands of spaghetti) that did not contribute or not much, to the Great Fact."

Wait a minute, isn't that cheating? I detect an a priori judgement - to throw out an 'alleged' causal factor. Well, any way she gives us a large Table 3 listing a page full of 'background conditions' good or bad. These are to be omitted.
Then in Table 4 she provides 'incidentals' another cheat sheet of 'actual or supposed events after 1500 in Europe that are sometimes alleged (alleged, horrors) to have caused the modern world but have been shown to be mostly beside the point."

By whom and when? :) I am only kidding.

But this is the routine followed by model builders everywhere. (not counting model airplanes of course) But she detects my insolence and demands that, if I am indignant, I must provide 'scientific' proof for reinsertion of any of these excluded variables. "Scissors-and-paste evidence that is irrelevant to the economics" involved is outlawed. Says who? Turns out we skeptics have to "do the economic thinking framing what evidence you claim would be relevant." But according to previous argument, this cannot be Samuelsonian economic thinking. Not that I would consider that anything but an oxymoron.

Well, all of the above is marshaled and displayed in Figure 4 - The causes of the factor of sixteen or of one hundred. Seems a rather loose spread of potential factors. A wide variety of 'factors' are displayed in varying size type. But, remarkably, no inclusion of the Great Monetary Settlement and creation of the monetary basis for modern commerce. Actually no mention of financial aspects of what is a diagram of economic activity.

From this she argues, "My claim, in short, is that the model in figure 4, diagrammed here across the centuries, is better than the strictly materialist alternatives. (No argument there,) The model, I repeat, could easily be expressed mathematically as differential equations, but the lines of influence organized here by centuries are I think a good way to summarize the books's argument for a diagrammatically-minded reader."

Well, I am a trained cartographer and in engineering mechanical drawing as well, so enjoy diagrams, and I am trained in geodetic and celestial mechanics so also enjoy a differential equation or two. (What about matrix algebra and Venn diagrams.?) And I heartily agree that this or any other diagram Dr. McCloskey might chose to prepare will easily be superior to any materialist effort - a rather low bar to overcome.

Turns out we are not to be spared. She must write, "But I can satisfy a little the thirst (thirst is it?) of my economist colleagues for something closer to what they would consider 'a model'. The function for national product could be:

Q=1 (D, B, R) ` F (K, sL)_

I will spare my reader with the definition of terms. And I hasten to agree with the author who writes, "There is of course nothing profoundly mathematical about this way of saying what I am saying."

Now I am laughing, "She continues, "The 'mathematics' is merely a metaphorical language that economists understand, (how about geodetic engineers?) and which allows me to chat with them about the economic and social ideas involved without excessive confusion." (over a Bloody Mary no doubt.) And I also skip the 'Solow residual'. And there is much more discussion about each of those alphabetical variables, I pity the 'young economics student' for whom she kindly provided this. But there is more, more elaborate mathematical 'models' and even a pleasant suggestion. "If you like to think in logarithms, you can make the same expression into a log-linear one." I love them, had for years to use the massive tables of logarithms compiled as make work for scholars during the depression - that was well before Texas Instruments got the idea to include them. But I still have my slide rule, which is based on logarithms. Seriously, I do note that in some well-known economics texts the graphs are linear- linear when they should be log-linear.


Chapter 44 - Opposing the Bourgeoise Hurts the Poor
Now we get back and down to real cases in this relevant and important chapter. Dr. McCloskey selects two eminent ignoramuses as guinea pigs - Immanuel Wallerstein, Kenneth Pomeranz. They represent the Marxian intelligentsia who deplore 'capitalism' and all its results. She gives us many specific examples of government and special interests who passed laws to prevent innovation or economic improvement on the grounds that it would 'injure' some existing group. It is continuing today, as evidenced in the 2016 political campaign. She denounces the typical leftist antibourgeois rhetoric and political pressure. They claim to help the 'poor' but do not. But her examples of 'right wing' opposition such as from Carlyle are mostly rather outdated by now.

Here, she zeros in and describes the adverse results. "If bourgeois dignity and liberty are not on the whole embraced by public opinion, on the face of the sneers by the clerisy and the machinations of special interests, the enrichment of the poor doesn't happen, because innovation doesn't."

Another phrase to put on billboards.
But she spends the rest of the chapter giving the progressives credit for 'good intentions' toward the poor. Somehow those 'good intentions' just keep going wrong (by accident?) and the poor remain poor. Maybe, just maybe, the progressives like it that way.


Chapter 45 - And the Bourgeois Era Warrants Therefore not Political or Environmental Pessimism
This is an excellent chapter bringing all the economic historical proof to bear on present reality. But Dr. McCloskey begins by citing Bryan Caplan who enumerates four beliefs that the 'economist' holds but with which the public disagrees. She adds a fifth. But she devotes much of all three books to show that the economics Establishment - most economists who give politicians legitimacy - do NOT hold the beliefs. Yes, she and a few economists (such as Austrian School types) accept these opposing views. But the main reason the public does not agree but accepts the reigning economic theology is that the Establishment has been teaching them these ideas for over a generation. She, herself, repeatedly funds fault with Samuelson, yet his text remains gospel.

She continues with the real story. "Caplan argues that an economy governed on Citizen principles will impoverish the citizens." Quite so. She cites some examples and continues. "Bizarrely, the Aristocratic policy and the Citizen policy closely resemble each other in what they recommend." They do, indeed, but it is not bizarre. It is the result of the intelligentsia giving both their intellectual affirmation, both have to rely on intellectuals for what to believe.

Then, "The point here is that the brief reign of the entirely new and more genial Bourgeois Economist's Principles led to the modern world and its Great Fact of astounding and scope-expanding economic growth. Yet in many countries, and in some groups in all countries, the civic religion recommended by the clerisy remains a version of the Citizen or the Aristocratic policy - protectionist, paternalistic, antitechnological, proudly anti-capitalist....".

Yes indeed. Her key word there is 'brief'. Please read Muller for background on clerisy thought and consider what the causes are. He focuses on only a few of these individuals but has selected excellent representatives of type. The clear story is that (1) prior to the French Revolution there was expanding support by clerisy (intelligentsia) leaders - thought leaders such as Voltaire) for the bourgeois because these clerisy believed the ascendancy of the bourgeois would support and cause the revolution. And the result would be the enthronement of the clerisy. But (2) the revolutions of 1830- - to 1848 showed that the result was that the bourgeois themselves and not the new generation of clerisy were in charge. Dr. McCloskey calls this the 'treason' of the clerisy. Yes indeed, treason based on envy as Schoeck shows and on their desire to dominate and hold power because only they know what is best for everyone.

She knows this and includes good examples. for instance, from France. In her three volumes she cites dozens (or more) authors. But I didn't see Roger Scruton's devastating analysis in Fools, Frauds and Firebrands: Thinkers of the New Left. Here is an example of French pedagogy - "Capitalism, according to the French instructors of the young, is 'brutal', 'savage', and worst of all (wait for it) 'American." Is it any wonder, then, that we have Piketty and Philip Bobbitt's prediction of the coming conflict in his Shield of Achilles.?

Dr. McCloskey identifies the new substitute for Soviet Communism (at least among those who now doubt it) - namely, environmentalism, (including of course 'global warming'). "The new alternative to central planning socialism is environmentalism. It is now taught as a civic religion in American schools (and with an even more fevered rhetoric in Germany and the Netherlands and especially in Sweden), the way anticommunism was in the American schools of the 1950's or nationalism in the French schools of 1890's or the great chain of being in the English schools of the 1590's?"

I again have some disagreements with her when she seeks to be 'even handed'. I graduated high school in 1950 and attended college then and remember clearly that it was socialism (small c, communism) that was taught in schools. And I can't say about later dates in English schools, but 'the Great Chain of Being' was well out of thought by around 1500 in Italy and much of Europe when it was replaced by the abstract concept of 'state' as the source of legitimacy. Among others Hannah Arendt identified the secular religion focused on 'the state' years ago. Environmentalism is an offshoot to give a more concrete and understandable target for the uneducated mentality.

Yes, as she notes. The left now worships Malthus - an example of Gramsci theory to focus on culture.

She continues: "The economists have long tried to provide the reasoning and evidence - to the point where convinced environmentalists have in vexation stopped listening to them, so painful is the experience, and have stopped trying to show that the economists are wrong scientifically or ethically."

Again, I have to question this. Seems to me that Dr. McCloskey herself has shown that there are plenty enough economists who champion environmentalism to give assurance to any weak hearted fans. As for 'pain' I wonder as well. And the weak minded need no assurance.


Chapter 46 - But an Amiable, if Guarded, Optimism
Now for a finale. "If proinnovation ideas of the elite caused the Industrial Revolution, and if the artistic and intellectual elite turned against innovation after 1848, as it did, first in nationalism and then in socialism, and then in national socialism and finally in radical environmentalism, why didn't such turns bring to a halt the Industrial Revolution"

In her reply she again seeks to castigate both progressives and conservatives. She is right to describe the academic disapproval of Friedreich Hayek (not to mention Ludwig von Mises) and the whole way of thinking of the proponents of 'Austrian School economic theory. And right again to describe the economist establishment post WW II as leaning, less or more, toward central planning and 'democratic socialism.

She is very clear and strong in support of her position: "And reverting to full-scale, central-planning socialism or fascism of the sort that many of the clerisy still pine for on old socialist grounds or on old nationalist grounds or on new environmental grounds would be a catastrophe." And, "By now you will know that I would regard a loss of bourgeois and innovative rhetoric as a deep worry, not a hope, and that the main purpose of my hopeful seset on the Bourgeois Era is to argue against accepting such a disastrous loss."

Fine, but then she adds, "The danger of an all-devouring state is anyway as great nowadays from the right as from the left." How can this be when the central guiding tenant of the conservative is to reduce the size of government, eliminate as much government regulation and power as possible, reestablish coherent private money, I guess this idea is a remanent of the early education she notes she received in favor of socialism, But it is this claim from the radical left (such as John Rawls) that provides reasonable consideration of the very progressive agenda she insists she opposes. It is the false idea that fascism is 'far right' when it is but another version of leftist socialism - both of which demand large and growing 'state' organization and power. Whereas conservatism demands small and greatly reduced 'state' organization and power.


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