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Bourgeois Equality
How Ideas, not Capital or Institutions, Enriched the World

by Deirdre Nansen McClosky, University of Chicago Press 2016

15 Jun

Lordship (authoritarian landowners, or aristocrats). McCloskey writes of hunter-gatherers and highlander/herders escaping lordship but ... "If you followed the plow you followed the local lord, perforce... A hunter-gartherer typically had an easier life, at least in the Holocene. He worked fewer hours a week for his food than someone tied down to the abundance of crops." Farmers were ideal victims for any army that happened along.

The Aristocrat's protection racket: You honor me, give me the liberty to extract rents from you while I forbid you under penalty of death to seek competitive protection from anyone else. If you behave correctly as I ride by (curtsey if you are a female) I will at least not slaughter you.

According to McCloskey, the Bourgeois Deal was something else. Its "writ across society is recent." It was voluntary (without threat of violence) and egalitarian (lacking the aristocrat's assumption of biological superiority.)

16 Jun

The Bourgeois Deal according to McCloskey: "You accord me ... the liberty and dignity to try out my schemes in voluntary trade, and let me keep the profits, if I get any" and I (and my pesky, low quality, price-spoiling competitors) in exchange will create a "new, positive-sum drama" that will enrich your lives.

McCloskey describes that enrichment:

Today, one billion ... live still in nations of economic hell: a lot of moldy bread, some curdled mil, bad schools, bad shelter, bad clothing, bad sanitation. Most people in Haiti or Afghanistan live so, as do, in rich countries, many of the very poor. Until 1800, though, such a hell was what everybody except a handful of nobles and priests and merchants expected, year after terrible year. We have achieved over the past two centuries for ordinary people worldwide, materially speaking, unevenly, for the first time, a pretty good purgatory ... Since 1800 ... and especially since 1900, the goods and services available to the average human being, and the scope for a full human life, have startlingly expanded. The event justifies its label, "the Great Enrichment."

Since 1800 the ability of humans to feed and clothe and educate themselves, even as the number of humans increased by an astonishing factor of seven, has risen, per human, by an even more astonishing factor of ten. We humans now produce and consume seventy – 7 x 10 – times more goods and services worldwide than in 1800. Some people view this figure with alarm and speak of environmental degradation. But the news is mainly good.

17 Jun

About equality, as in her title Bourgeois Equality, McCloskey takes issues with Robert Reich, the Berkeley professor, TV commentator and Bernie Sanders supporter. She quotes Reich's declaration that "Widening inequality challenges the nation's core ideal of equal opportunity" and that inequality "hampers upward mobility." McCloskey points to the benefits of a bigger pie. It is ethically irrelevant, she claims, whether poorer people have "as many diamond bracelets and Porche automobiles as do owners of hedge funds. It does, however, matter ethically whether they have the same opportunities to vote or to learn to read or to have a roof over their heads ... We had better focus directly on what we actually want to achieve, which is equal sustenance and dignity, eliminating poverty, acquiring for all people what the economist Amartya Sen and the philosopher Martha Nussbaum call capabilities"

She adds:

Indeed. Solving absolute poverty came in fact from the Great Enrichment, and attempting to solve a logically insoluble relative poverty resulted in slow growth and the encouragement of insatiable envy.

The result is general. Despite the clamor about poverty lines and Gini coefficients [a measure of income distribution], nowhere in the past few decades except in war-of-all-against all countries such as Somalia have conditions measured by a correct standard of "enough" worsened even in notably unequal places such as Brazil, South Africa, China, or the United States. They have got better.

18 Jun

In Chapter 10 (a seventh through the book, and it's small print) McCloskey writes of the divergence between Europe and the rest of the world regarding economic success as not having been caused by imperialism.

She begins the chapter by describing a difference she has with Harvard historian Niall Ferguson. "What does not explain the divergence and success of the West," she writes, was Europe's 'domination' of the rest of the world. She describes Europe's war-making abilities as an over-all negative economically.

She derides Ferguson's idea that Europe's work ethic was responsible for its greater economic success. She also derides Max Weber's notion that Protestant Europeans worked harder that Catholic Europeans, not to speak of people in Hindu India or Confucian China. McCloskey writes that "everyone works hard, when not debilitated by malaria and the like."

McCloskey derides what she calls Ferguson's "power-makes-plenty-theory. She writes of the "undoubted damage" that imperialism did to its victims, but more to the point she writes that empire had nothing to do with what Ferguson has described as the West's "predominance.'' McCloskey complains:

The persistent macho and deadly notion that power will cause plenty is popular among historians. But the truth is the other way around: plenty can budget for repeating rifles and ironclad ships, which lead to domination over palm and pine. Yet such domination, like war itself, makes for scarcity, not plenty. As the British Foreign Office kept warning during the scramble for Africa, guns are expensive in housing and education forgone.

Europe became rich, writes McCloskey, by it own betterments at home, "not by stealing treasure from India or China or Africa, or even from Mexico and Peru." She adds:

The economic effect of imperialism on ordinary Europeans has been shown repeatedly to be nil or negative. Disraeli himself complained that "these wretched colonies .. are a millstone around our neck."

McCloskey writes that in the long run it was "plenty that bred power, not the other way around" – power that bred plenty.

20 Jun

McCloskey thinks that the commonly used word "capitalism" doesn't describe what it intends to describe. She prefers "trade-tested betterment." She too uses "capitalism" because "everybody chatters about it.

Capitalism is a word that emerged in the 1800s in Europe. Educated people have believed that "capitalism' emerged in the sixteenth century, that what made riches was the piling of brick on brick and that accumulation proceeded until it yielded the Industrial Revolution in the eighteenth century. "Both the left and the right are enchanted by the ... story that the Industrial Revolution was a take off and that physical accumulation, not ideology, was its fuel".

Capital accumulation is as old as the Stone Age. It existed in ancient China, in Hellenistic civilization . and in ancient Rome.

Accumulated capital depreciates. A house built in 900 or 1700 is dust by now, unless it has been repaired and restored again and again. What does not vanish like entropic smoke ... is knowledge. Knowledge has a chance of accumulating over centuries.

The novelty after 1600 ... was not the accumulation of capital but the accumulation of knowledge, protected by the newly accumulated ideology of the Bourgeois Deal.

McCloskey gives more credit for economic betterment to the Bourgeois Deal than she does to governance. New Zealand appears to be better governed and more ethical in its habits than Italy. In 2012, according to the Corruption Perception Index, New Zealand was tied for first and Italy was seventy-second. Yet in real GDP per person, New Zealand and Italy in 2010 were nearly identical. She writes:

A government has to do extremely badly with its public institutions, worse even than Italy, to offset what can be gained from adopting chemistry, electric lighting, elementary education, automobiles, and computers.

... pride in craft and service in the private sector, eagerly adopting trade-tested betterment in accord with the Bourgeois Deal, innovism, is why Italy, or for that matter Chicago, is not so poor as its governance would imply.

She claims that projects of betterment enacted by governments are not as good as voluntary deals made among consenting adults. Those who believe otherwise, she writes, suppose "that every government is like Denmark's, New Zealand's or Finland's. Together these three countries govern only 2 percent of the world's population." She describes Norway's government as honest with its income from North Sea oil and not "suffering the resource curse in the style of Nigeria."

Is McCloskey telling us that it would be wrong for people in the United States to support policies to make the US more like Denmark? She doesn't say. But she writes a sweeping complaint that government projects are directed at "enriching special interests" at the expense of the general public, or at merely spending "mindlessly" taxpayer money. In a conversation with George Will, Mr Will told her he thought one of her books is "a cry for individualism." She answered:

Yeah. It is. A kind of individualism, you know, an individualism that respects others, not sort of Ayn Rand screw you, I'm all right.

McCloskey is not a big fan of minimum wage laws. Where she stands on consumer protection law is not yet clear. (I'm on page 146.) What I'm reading in this section of her book, from chapters 11 through 16, seems less than an attempt at an all encompassing political agenda that it is a reiteration of her view of that "the mighty engine of the Great Enrichment" or the "Bourgeois Deal" is best in erasing poverty.

Chapter 11 is titled "Poverty Cannot be Overcome from the Left by Overthrowing Capitalism." Is there a seriously viable movement these days that is interested in overthrowing capitalism? Other than in Nepal perhaps?

Also of interest, for me at least, in this section regarding long-range historical development, McCloskey writes about ethics changing faster than institutions, which is why, she writes, "we find imperial Rome still pretending to have a powerful Senate." She is supporting the power of Bourgeois ethics. "Treating ordinary people as free and honorable," she writes, "made them by historical standard startlingly wealthy."

By the way, Karl Marx was from a fairly wealthy bourgeois family, from whom he inherited values that embraced humanism and freedom. Hard times for German workers swung him to support the proletariat in what he saw as its conflict with the bourgeoisie. Marx believed that as a class the bourgeoisie was an advance over what had preceded it, but he went too far – McCloskey surely believes – in his holding that the proletariat was part of a Hegelian conflict, should end the Bourgeois Deal and eliminate the bourgeoisie as a class.

McCloskey is a former Marxist. To George Will she said,

I’m an old Marxist, but the saying is that if you’re not a Marxist before you’re 18, you have no heart. If you’re still a Marxist after age 25, you have no brain. And I just made it.

21 Jun

In writing about ethics and the Great Enrichment, McCloskey turns to the Scotsman Adam Smith, a professor of moral philosophy (1723-1790). Smith, a free-trader, argued against "the excess of self-interest" that led some to support protectionism. McCloskey adds:

He [Smith] warned ... that the interest of merchants and manufacturers is always in some respects different from, and even opposite to, that of the public. Smith therefore did not recommend rule by the bourgeoisie, and in fact supported the traditional politics of the landed classes.

Smith advocated prudence, temperance, justice, courage, and he added the Christian virtue of love. McCloskey describes Smith as no reductionist: a good attitude for the betterment of self and others required the above virtues as a package.

McCloskey describes Benjamin Franklin as having become a good bourgeois. As for bourgeois equality, Franklin has been described as concerned for the happiness and prosperity of "common" people. According to McCloskey, Franklin favored a practical betterment short of utopia. McCloskey:

Utopia makes perfection the assassin of the merely good. The bourgeois, coming to honorable dignity in the eighteenth century, wanted neither enthusiastic religion nor mass social experimentation – merely betterment, cultivating one's own garden.

Some searches for perfection that McCloskey points to as damaging that the bourgeoisie was avoiding: the mischievous religious-socialist/apocalyptic revolutionary view of the Enlightenment in France; militant Christianity in the 17th century Europe; militant "post Christianity" (does she mean the reach for perfection among anarchists and the left?); and lately, militant utopian Islam.

Perhaps McCloskey admits the possibility of rightwing ideologues who have a vision of laissez-faire economics as perfection, the possibility of people with wooden and simplistic minds who want purity and no government activity messing with their view of utopia.

McCloskey has been described as viewing commercial activity as capable of being honorable and virtuous if it is done right. Her "Bourgeois Betterment" is about trade and manufacturing – different from real estate speculation and rents – and perhaps we can say that the good behavior of those who made the Great Betterment since 1800 had some help from various government interventions and influence.

Copyright © 2016 by Frank E. Smitha. All rights reserved.