Deirdre McCloskey - Bourgeois Equality Ideas, not capital, transformed the world.
Contrary
to economists from Adam Smith to Karl Marx to Thomas Piketty, our riches cannot
be explained by the accumulation of capital, as the misleading word capitalism implies.
The Great Enrichment did not come from piling brick on brick, or bachelor's
degree on bachelor's degree, or bank balance on bank balance, but from piling
idea on idea. The accumulation of capital was of course necessary. But so were
a labor force and the existence of liquid water. Oxygen is necessary for a
fire. Yet it would be unhelpful to explain the Chicago Fire of October 8–10,
1871, by the presence of oxygen in the earth's atmosphere.
The modern world, in other words, can't be explained by routine brick
piling, such as the Indian Ocean trade, English banking, canals, the British
savings rate, the Atlantic slave trade, the enclosure movement, the
exploitation of workers in satanic mills, or the original accumulation of
capital in European cities. Such routines are too common in world history and
too feeble in quantitative oomph to explain the 30- to 100-fold enrichment per
person unique to the past two centuries.
Hear again that amazing fact: In the two centuries after 1800, the
goods and services made and consumed by the average person in Sweden or Taiwan
rose by a factor of 30 to 100—that is, a rise of 2,900 to 9,900 percent.
The Great Enrichment of the past two centuries has dwarfed any of the previous
and temporary enrichments. It was caused by massively better ideas in
technology and institutions. And the betterments were released for the first
time by a new liberty and dignity for commoners—expressed as the ideology of
European liberalism. Not "liberalism" as it's come to be understood
in the United States, as ever-increasing government, but its old and still
European sense, what Adam Smith advocated in 1776: "allowing every man to
pursue his own interest his own way, upon the liberal plan of equality, liberty
and justice."
Why did such ideas shift so dramatically in northwestern Europe, and
for a while only there? Why did Leonardo da Vinci in 1519 conceal his
engineering dreams in secret writing, yet in 1825 James Watt of steam-engine
fame was to have a statue set up in Westminster Abbey? In 1400 or even in 1600,
a canny observer would have bet on an Industrial Revolution and a Great
Enrichment—if she could have imagined such freakish events—in technologically
advanced China or the vigorous Ottoman Empire. Not in backward, quarrelsome
Europe.
The answer does not lie in some 1,000-year-old superiority, such as
English common law, or in the deep genetic ancestry of Europeans. The
liberalism that led to ordinary people being allowed to have a go, and then
bettering their lives and ours with a wave of gadgets, lies rather in the
black-swan luck of northwestern Europe's reaction to the turmoil of the Early
Modern - the coincidence in northwestern Europe of successful reading, reformation,
revolt,
and revolution. The dice were rolled by Gutenberg, Luther, Willem van
Oranje, and Oliver Cromwell. By a lucky chance for England their payoffs were
deposited in that formerly not-so-consequential nation in a pile late in the
late 17th century. A result of those four Rs was a fifth R, a crucial revaluation of
the bourgeoisie, an egalitarian reappraisal of ordinary people.
The Renaissance, much to be admired for other reasons, was not one of
the relevant Rs. It yielded betterments, all right—human dissection,
perspective drawing, Palladian architecture, and the printing of edited Greek
classics, among my favorites. But the test it applied for valuing them was
aristocratic, not bourgeois, that is, not a market-tested betterment.
They did not improve the lives of ordinary people, at any rate not for a very
long time. One could argue, as the brilliant economic historian Joel Mokyr does,
that what mattered for betterment was the change in outlook among a technical
elite of doctors, chemists, technicians, instrument makers. An essay that Mokyr
co-wrote recently puts it this way: "What counted above all was
[Britain's] highly skilled mechanics and engineers, who may not have been a
large proportion of the labor force."
If one is speaking of the proximate cause, surely he's right: A tiny
elite mattered. Yet where did such a technical elite come from? In Holland and
Britain and the United States, and then the world, it came from ordinary people
freed from ancient suppressions of their hopes. Such freeing is the sole way of
achieving a mass of technically literate folk, oriented not toward
rare luxuries or military victories but toward the ordinary goods of peacetime
for the bulk of ordinary people—iron bridges, chemical bleaching, weaving of
wool cloth by machines powered by falling water. The problem in, say, France in
the 18th century was that the engineers came from the younger sons of its large
nobility, such as Napoleon, educated for military careers. In Britain, by
contrast, a promising lad from the working class could become a bourgeois
master of new machines and of new institutions as an engineer or an
entrepreneur. Or at least he could do pretty well as a clockmaker or a
spinning-machine mechanic.
In Britain and its offshoots and imitators, in other words, the career
of the enterprising bourgeois or the skilled worker was open to talent. John
Harrison (1693–1776), the inventor of the marine chronometer, which solved by
machine the problem of finding longitude in the wideness of the sea,
against the arrogantly enforced demand by the elite that it be solved in the
heavens by elite astronomy, was a rural Lincolnshire carpenter. His first clock
was made of wood. The British working man, Napoleon might have said but didn't,
carried the baton of a field marshal of industry in his rucksack.
What began to characterize northwestern Europe in the 17th and 18th
centuries was not so much new ethics at the level of individual responsibility,
though that happened a little, encouraging and benefiting from arms-length
trading. Much more important was a change at the social level of the ethical opinion
people had of each other. "You made a fortune trading with the East.
Good." Or: "That fellow invented a new transmission for automobiles.
Good."
In other words, the new liberty and dignity for commoners was a
sociological event, not a psychological one. It originated in a changing
conversation in the society, not in psychological self-monitoring by the
individual. People in Holland and then England (and now China and India) didn't
suddenly start alertly attending to profit. They suddenly started admiring such
alertness and stopped calling it sinful greed.
It was not, as you may have heard recently from the World Bank,
"institutions." An institution works well not merely because of good
official rules of the game, beloved of economists, "incentives." An
institution works, if it does, mainly because of the good ethics of its
participants, intrinsic motivations powerfully reinforced by the ethical
opinion people have of each other. A society can craft an official rule against
cheating in business, a good institution. Yet if the rule is enforced with a
nudge and a wink among people who ignore simple honesty or who sneer at the
very language of ethics, and who are not effectively condemned by the rest of
society for doing so—as in a corrupt Chicago during the 1890s or in a corrupt
Shanghai during the 1990s—the economy won't work as well as it could.
The crux is not black-letter constitutions but how the constitutions
came about ethically and how they are sustained in social ethics, the
continually renegotiated dance located out in the language games that people
play as much as in their "utility functions." When a society or its
elite earnestly wants the rules of the game to work, and talks about them a
lot, and scolds violators from an early age, the constitutions work, pretty
much regardless of imperfections in the written-down rules and incentives. The
political scientists Elinor and Vincent Ostrom at Indiana University showed
repeatedly that a situation that would in the usual economics always be a
hopeless case of "free riding" and "the tragedy of the
commons," such as the overexploitation of the Los Angeles aquifer, can
often be solved by talk among serious-minded, ethically disciplined people.
After the failed revolutions of 1848, a new and virulent detestation of
the bourgeoisie infected the mass of artists, intellectuals, journalists,
professionals, and bureaucrats—the "clerisy," as it was called by the
poet Coleridge. The clerisy of Germany, Britain, and especially France came to
hate the merchants and manufacturers and indeed anyone who did not admire the
clerisy's books and paintings. (Flaubert declared, "I call bourgeois
whoever thinks basely.") In the 18th century, certain members of the
clerisy, such as Voltaire and Tom Paine, had courageously advocated for liberty
in trade. But by 1848 a much enlarged clerisy, mostly the sons of bourgeois
fathers, had commenced sneering at the economic liberties their fathers
exercised so vigorously. They advocated instead the vigorous use of the state's
monopoly of violence to achieve utopia, now.
On the political right the clerisy, influenced by the Romantic
movement, looked back with nostalgia to an imagined Middle Ages free from the
vulgarity of trade, a non-market golden age in which rents and hierarchy ruled.
Such a Romantic vision of olden times fits well with the right's perch in the
ruling class, governing the mere in-dwellers. Later, under the influence of a
version of science, the right seized upon social Darwinism and eugenics to
devalue the liberty and dignity of ordinary people, and to elevate the nation's
mission above the mere individual person, recommending colonialism and
compulsory sterilization and the cleansing power of war.
On the left, meanwhile, the cadres of another version of the
clerisy—also influenced by Romance and then by a scientistic enthusiasm, in
their case for historical materialism—developed the illiberal idea that ideas
do not matter. What matters to progress, the left declared, is the unstoppable
tide of history, aided (it declared further, contradicting the unstoppability)
by protest or strike or revolution directed at the thieving bourgeoisie. Such
thrilling actions would be led, of course, by the clerisy. Later, in European
socialism and American progressivism, the left proposed to defeat bourgeois
monopolies in meat and sugar and steel by gathering them all into one supreme
monopoly called the state.
While all this deep thinking was roiling the clerisy of Europe, the
commercial bourgeoisie created merely the Great Enrichment and the modern
world. The Enrichment gigantically improved our lives.
In doing so, it proved
that both social Darwinism and economic Marxism were mistaken. The allegedly
lower races and lower classes proved to be creative, not inferior. The
allegedly exploited proletariat was enriched, not immiserated. In its enthusiasm
for the deeply erroneous pseudo-discoveries of the 19th century—Benthamite
utilitarianism, Comtean positivism, nationalism, socialism, historical
materialism, social Darwinism, scientific racism, theorized imperialism,
eugenics, geographic determinism, institutionalism, social engineering,
progressive regulation, the rule of experts, a cynicism about the force of
ethical ideas—much of the clerisy mislaid its earlier commitment to a free and
dignified common people. It forgot the correct social discovery of the 19th
century, which was itself in accord with a Romanticism so mischievous in other
ways: that ordinary men and women do not need to be directed from above, and
when honored and left alone become immensely creative. "I contain
multitudes," sang Walt Whitman, the democratic poet. And he did.
The economic liberation and social honoring together did the trick in
Holland and England, then in Austria and Japan. Now they are doing the trick
with astonishing force in Taiwan and South Korea, China and India.
