One of the perennial debates in economic history, and in studies of Western Civilisation more generally, is how did the citizens of Britain and Europe transition from a ‘Malthusian trap’ of subsistence living to a state of material opulence sparked by the Industrial Revolution?
Was it capital accumulation? Was it foreign trade? Was it coal? Was it colonialism? Was it technology? Was it property rights? Was it religious belief?
While these potential determinants of the Industrial Revolution have been discussed at length, the economic historian Deirdre McCloskey discounts these factors to emphasise the beneficial effect of a ‘bourgeois dignity’ encouraging entrepreneurship and market growth.
McCloskey has written the lead essay on Cato Unbound for this month summarising her core arguments.
She says that modern economic growth resulted when ‘the Dutch and British and then the Americans and the French began talking about the middle class, high or low – the “bourgeoisie” – as though it were dignified and free.’ This stands in sharp contrast to the widespread rhetorical antipathy towards business owners and moneylenders of previous eras.
Eschewing the notion that only material explanations can explain the economic rise of the West, McCloskey states that positive changes in public rhetoric about commercial conduct are critical to inspire ordinary people to take financial risks and sell their wares to a discerning public.
According the bourgeois a dignified place in society is also reflected in public policies, such as low taxes, streamlined regulation and efficient government spending, conducive to private investment and economic growth.
The second volume of McCloskey’s bourgeois virtues series, Bourgeois Dignity: Why Economics Can’t Explain the Modern World, is about to hit the bookshelves explaining her thesis in detail.
If Peter Boettke’s glowing review of volume one, Bourgeois Virtues, is any guide, McCloskey’s take on the emergence of a bourgeois dignity will also become compulsory reading for any serious student of scholarly thought on Western Civilisation.