The change in talk and thought about the bourgeoisie (to turn back to the rest of you) was probably of greater importance for explaining the modern world than the clerical Reformation in Germany after 1517, or the aristocratic Renaissance during and long after the Tuscan Trecento. Yet both of these influenced the talk, as did probably more powerfully a third great R-shift of early modern times, the successful Revolts and Revolutions across more than three centuries which shook Holland and Britain and America and Poland and finally France and all its Napoleonic conquests. The focus here, though, is on a fourth great and (for a while) uniquely European R-shift—the “Bourgeois Revaluation,” achieved peacefully during the seventeenth and eighteenth centuries in Holland and Britain. You can imagine the enrichment part of the modern world without the Renaissance, the Reformation, or even the Revolutions— however much they contributed indirectly to how we live now. But you can’t imagine the enrichment part without the Revaluation. An old class of town dwellers, formerly despised by the clergy and the aristocracy and the peasantry, began to acquire a more dignified standing, in the way people thought and talked about it, in European rhetoric about middle-class activities. And along with a new dignity the bourgeoisie began to acquire a new liberty. Both were rhetorical events.
Among the seven principal virtues, faith is the virtue of backward looking, of having an identity.[1] Keep the faith. Dignity encourages faith. You are dignified in standing, in being who you most truly are, and have been. A Chicagoan. A scholar. A woman. Hope by contrast is the virtue of forward looking, of having a project. Liberty encourages hope. You are free within the terrible limits of scarcity to venture. To change who you are. To start a business making adjustable wrenches. To become a professor of Assyriology. 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. To assume one’s place and to venture, the dignity and the liberty, were new in their rhetorics.
And both were necessary. My libertarian friends want liberty alone to suffice, but it seems to me that it has not. Changing laws is not enough (though it is a good start—and rotten laws can surely stop growth cold). True, from 1600 on the new dignity and the new liberty normally reinforced each other, and such a reinforcement is one possible source of the economist’s “nonlinearities.” Dignity and liberty are admittedly hard to disentangle.[2] But dignity is a sociological factor, liberty an economic one. Dignity concerns the opinion that others have of the shopkeeper. Liberty concerns the laws that constrain him. The society and the economy interact. Yet contrary to a materialist reduction, they are not the same. Laws can change without a change in opinion. Consider prohibition of alcohol and then of drugs over the past ninety years. And opinion can change without a change in laws. Consider the decades-long drift toward independence among the English North American colonists.
It matters that dignity and liberty work together. Liberty without dignity, such as the lack of dignity that the wandering merchant faced outside his home city in medieval Europe or China or South Asia or Africa, makes for activity without faithful self-esteem, the eager but lowly and self-despising niggling of the marketplace. Willa Cather wrote in 1931 of “nervous little hopper men, trying to get on,” by contrast with her admired bourgeois successes of the early Midwest, R. E. Dillon and J. H. Trueman, true indeed.[3] If thus lacking in dignity, the little hopper bourgeoisie is under assault from politics and society and literature, which makes for bad economic politics, as in Habsburg and then Bourbon and then fascist Spain, and $3 a day. A leading example in European history is that of the Jews, liberated legally during the eighteenth and nineteenth centuries but not accorded dignity—with the dismal result of Russian pogroms and Viennese anti-Semitic politics and the Final Solution.
Likewise, dignity without liberty makes for status without hope, merely another version of the hierarchy of olden times, as in the overregulated guild towns of Venice or Lübeck in their maturity. It happened repeatedly early and late that a vigorous, innovating bourgeoisie settled at last for local political power, and ceased innovating, as did (until they awoke during the nineteenth century) the Swiss “patriciate,” or the Dutch “regents.” The merchant aristocracy of Venice was closed in 1297, and yet the Venetians by unusual patriotism and focus were able to hold the golden East in fee for centuries after. The more usual case is that an oligarchy arises, then closes, and then promptly goes to sleep. Sleeping while collecting rents is so much more pleasant than striving. If the bourgeoisie were thus admitted into the elite, but at the price of disabling itself from alert and outward-looking innovation, the modern world would look a good deal like the ancien régime of Northern Italy or the Hansa, at $1 to $5 a day.
All this changed on a large scale, first in Holland, in the Bourgeois Revaluation from the seventeenth through the nineteenth century. People needed to be persuaded to accept the outcome of innovation. It was a complicated cultural task, the creation of what the great economist Joseph Schumpeter, looking back with nostalgia from 1942 on Europe just before the First World War, called a “business-respecting civilization.” But it did happen, and for the first time and uniquely in northwestern Europe, by a series of happy preconditions and accidents. Revaluations of the honorable transcendent, no longer confined to heroism or saintliness or courtly grace, changed society and politics. It became honorable—“Honorable!” the aristocrat snorts—to invent a machine for making screws or to venture in trade to Cathay. By contrast, what Tocqueville called “habits of the heart” did not change much. The initiating change was not psychological (as for example Max Weber claimed in 1905, and Robert Lucas in 2002), nor economic (as Karl Marx and Friedrich Engels claimed in 1848, and Douglass North in 1990), but sociological and historical and political. That is, around 1600 on a big scale in pioneering Holland, and then around 1700 on a bigger scale, and permanently, in innovating Britain, some of the elite began to revalue the town and its vulgar and corrosive creativity.
John Lilburne, one of the gentry-origin, merchant-radicals of London (he was born in the royal place at Greenwich), a Leveller of the English Revolution after 1642, saw it in 1653 as a law of God and England that “no man. . . may be put to answer for anything but wherein he materially violates the person, goods, or good name of another.”[4] Leave us alone, milord, unless we steal. By the 1669 the Dutch cloth merchant Pieter de la Court was declaring that “a power of using their natural rights and properties for their own safety [‘the pursuit of happiness’ soon became the usual phrase]. . . will be to the commonalty. . . an earthly paradise: for the liberty of a man’s own mind, especially about matters wherein all his welfare consists, is to such a one as acceptable as an empire or kingdom.”[5] No aristocratic empires or kingdoms, please; we’re bourgeois, and merely want the liberty to get on with the workaday task of pursuing happiness. In 1690 an English merchant to the Ottomans, Dudley North (himself from an aristocratic family), wrote in an even more modern and economistic and bourgeois way that “there can be no trade unprofitable to the public, for if any prove so, men leave it off; and wherever the traders thrive, the public, of which they are a part, thrives also.”[6] Therefore, laissez faire (make what you want, free of regulation), as the early eighteenth-century French theorists of bourgeois life such as Pierre de Boisguilbert began to say, and later laissez passer (trade what you want).[7]
Such promarket opinions have never become universal. Though his audience included a big proportion of the merchants and apprentices of businesslike London, Shakespeare’s only plays touching on the bourgeoisie are The Merchant of Venice and The Merry Wives of Windsor. In The Merchant the bourgeois Antonio is silly in his love for aristocratic Bassanio, and the other major bourgeois figure is Shylock. All the other works of the Bard sing of honorable aristocrats or comical peasants or sweet shepherds (priests are notably absent). His honored characters, speaking in blank verse rather than comical prose (The Merry Wives is almost all in bourgeois/commoner prose), reflected the sociology of dignity in his times, and the hierarchical conventions of the Elizabethan theater. The elite took a century or more after the age of Shakespeare to begin speaking of commercial creativity as OK, acceptable, not-to-be-sneered-at, as in all the many works of Daniel Defoe, and then the essays and plays of Addison and Steele, and then the “bourgeois tragedies” on the stages of England and France and Germany, and then above all in the modern European novel. Two centuries after Shakespeare the heroes even in Jane Austen’s novels, though noncommercial gentry, think in terms of sense and sensibility, prudence and love. And dear Jane herself speaks enthusiastically in her letters about her bourgeois business of authorship, and relishes her royalties. Yet anticommercial snobbery even in Britain did not entirely end, ever. You see it in Emma Woodhouse’s ill-begotten advice to Harriet Smith in Emma (1815) not to marry the merely bourgeois farmer Robert Martin. One of Jane’s brothers became for a while an haut bourgeois banker—though two others ended up as aristocratic admirals in the Royal Navy. Aristocratic or Christian virtues never entirely left the imagination of the West, or of the East. They sometimes were mischievous, as in Japanese militarism or American fundamentalism; yet sometimes they were a glorious completion of bourgeois ethics.
The liberty half of the Revaluation was equally, and more famously, slow in coming. The domination of British politics by an illiberal and antibourgeois and indeed antidemocratic Establishment did not entirely end, ever—consult for instance the British TV comedy of the 1980s, Yes, Minister. As the historian Margaret Jacob argued long ago, and as the historian Jonathan Israel has confirmed lately in the history of ideas, the free-market and free-voting “radical Enlightenment” of people like the Levellers, de la Court, Spinoza, Mandeville, Rousseau, Benjamin Rush, Mary Wollstonecraft, and some of the well-named Freemasons was undercut by the more conservative Enlightenment of Locke, Newton, Voltaire, Adam Smith, John Adams, and others of the Freemasons, in the utter liberty of trade that the radicals sometimes favored, among other matters—though note that both sides of the Enlightenment contained admirers of the bourgeoisie.[8] (And of course the reactionary powers for centuries fought both Enlightenments with galley and with rope. In France during the term of the laws 1686–1759 prohibiting the importation or making of printed calicoes—this to protect wool and linen manufacturers, and so a bourgeois party of the old and mercantilist sort—the Swedish economist and historian Eli Heckscher reported that the measures “cost the lives of some 16,000 people, partly through executions and partly through armed affrays, without reckoning the unknown but certainly much larger number. . . sent to the galleys. . . . On one occasion in Valence, seventy-seven were sentenced to be hanged, fifty-eight were to be broken on the wheel, 631 were sent to the galleys.”)[9]
In many places in Northwestern Europe, however, the new and liberal bourgeois values, and the Revaluation, triumphed, with startling economic results. The historian of technology Christine MacLeod dates the final apotheosis of the inventor in Britain to the early nineteenth century. Certainly the shift in rhetoric beginning in seventeenth-century Holland needed to be tended, as ideologies do. MacLeod tells for example of the campaign before 1834 to erect in Westminster Abbey—there among the kings and priests and poets—a big statue of the inventor of the separate-condenser steam engine, James Watt (1736–1819; the statue was later shifted to St. Paul’s): “Not to perpetuate,” the inscription reads, “a name which must endure while the peaceful arts flourish, but to show that mankind have learned to honor those who best deserve their gratitude. . . [such as James Watt,] who enlarged the resources of his country, increased the power of man, and rose to an eminent place among the most illustrious followers of science and the real benefactors of the world.” A contemporary asked in vexation “what this vast figure represents, what class of interests before unknown [well, hardly ‘unknown’], what revolution in the whole framework of modern society.”[10] He was behind the curve. MacLeod notes that the Times as early as April 22, 1826, had declared that inventors were “the elect of the human race.”[11] She detects during the 1830s “a marked alteration in the attitudes of judges and juries towards patentees. . . . The balance of success in litigation shifted towards prosecutors of infringements, as patentees began to be regarded less as grasping monopolists [of Elizabethan date, for example], and more as national benefactors,” sixty years after Adam Smith had fully articulated the case.[12] The real benefactors of the world came to be seen as commercial innovators and followers of “science” (which by the way was still being used then in the old sense: Watt was an instrument maker, not a physical “scientist” in the definition later prevalent in English, as was for example his friend the chemist and physicist Joseph Black, who initiated the science of thermodynamics).
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. True, if supporters of subsidies to American cotton growers were capable of shame, eastern Burkina Faso and the rest of the Sahel would do better. Ethical failures in the global North, such as the rhetoric of zero-sum “protection” and “competitiveness,” contribute to keeping such places poor. Yet even with a bad climate and a bad start and an unethical policy in the North of protecting its own rich farmers and trade unions, and helping them to compete by suppressing competition, such places do not have to remain poor. That’s the difference on past form between Bottom-Billion Bangladesh now and Norway or Japan in 1800, whose poverty then seemed hopeless, an old rugged cross to be taken up without complaint (you’ll get pie in the sky when you die). When a stable though tyrannical country like China or a turbulent though law-governed country like India started to revalue markets and innovation, and to give a partial liberty to commerce, the food and housing and education for the average person commenced exploding. In a few generations China and India, I repeat, if
they don’t revert to anti-innovation, will have a standard of living beginning to approach Eva’s. Already they have entered Collier’s Top Four to Six Billion. Imagine the artistic and intellectual flowering when 37 percent of the world’s population is well-off enough to pick up a brush or pen or flute or computer. An internal ethical change is doing it, and it began in northwestern Europe a little before and after 1700.
It wasn’t “capitalism” that was new in 1700. Markets and nonagricultural property and a town-living middle class in charge of them are very old. The market economy, contrary to what you might have heard, has existed since the caves. The anthropologist Jack Goody declares that “trade was essential to the growth of human life from the earliest times, including the institution of the market and the rise of some specialized individuals (later merchants).”[13] The invention of full language, by some accounts occurring somewhere between 70,000 and 50,000 BCE in Mother Africa, shows up archaeologically for example in a big and sudden increase in the distance traveled by stone for tools, such as flint or obsidian, scores of miles in trade instead of the former few. So it went, for millennia. The invention of agriculture required a walled town to guard the crop harvested, in Jericho in Israel and Catalhöyük in Turkey, after 8000 BCE. For millennia the towns proliferated, with their markets and their bourgeoisies and their enterprises. In the third millennium BCE the urban merchants from the Indus Valley in what is now Pakistan exported grain and cotton cloth to the towns of Sumer in southern Iraq. Credit and its premise of monetary accumulation is ancient.[14] Stamped or cast metal coinage was invented around the eighth or seventh century BCE simultaneously in China, India, and what is now Turkey. But long before, and in many places long after, people had used monetary equivalents such as bars of copper or iron, coils of silver, or cattle, or cowry shells, or cacao beans, or the pieces of cloth used as money at Prague in 965 CE.[15] The big market of Tlatelolco, next door to Tenochtitlan in what is now Mexico City, serviced daily in 1519 CE tens of thousands of customers, paying with cacao beans. “Back at least as far as the third millennium BCE,” writes the economic historian George Grantham, “farmers on some islands in the Aegean Sea were producing olive oil and wine in amounts greatly exceeding domestic consumption requirements.”[16] Their balance of trade would have been squared with money substitutes like wheat from the mainland, or later with copper bars or tin.
The conventional history of “commercialization” and especially “monetization,” and their opposites “self-sufficiency” and “communal property rights,” with an allegedly sharp distinction between rural Gemeinschaft (inherited, emotional community) and urban Gesellschaft (created, cold society), and a recent “rise of rationality” and a lamentable dominance of Gesellschaft, are for the most part myths, created by German scholars in the nineteenth century under the influence of a Eurocentric Romanticism of race, and in reaction to the universalist claims of the French and Scottish Enlightenments. But on the contrary (and in agreement with the French and the Scots), from the earliest times peasants and townsfolk, farm and factory, were motivated by the same set of human virtues and vices. Ferdinand Tönnies, who developed the vocabulary of Gemein- and Gesellschaft, declared in 1887 that “one could. . . hardly speak of commercial Gemeinschaft.” Yes one can, and for business to function well it must be an emotional community. “The Gemeinschaft of property between husband and wife cannot be called Gesellschaft of property.”[17] Oh yes, it can, and had better be if wives are to have independent identity.
There is no change in human nature from olden to modern times, and the attribution of a novel “rationality” to a society capable of world wars and modern sports seems at least strange. In particular the townsfolk worldwide appear to have had pretty much the same psychological makeup as the modern bourgeoisie, as we can infer for example from the curses directed at them early in the first millennium BCE by the Hebrew prophets (Amos 8:4–7, Hosea 12:7–8, among many cases). There was no rise in the “rationality” of the bourgeois in, say, the sixteenth century. The businesspeople wanted profit then as now, as do all humans—and as do all forms of life. Grass is rational. The townsfolk wanting profit believed that the very best way to attain it was by arranging for monopolies enforced by corrupt judges and kings and mayors, who then as now were very willing to participate: the wool and linen manufacturers of France, for example, persuaded the state to send importers of cotton cloth to the galleys or the breaking wheels. But the bourgeois were willing to innovate if compelled by competition and enabled by cooperation, and honored to boot. They only awaited the sociological and political Revaluation in northwestern Europe, and the closing of protectionist avenues for local enrichment and the elevation of inventors to fame, to begin innovating on an immense scale, creating a unique and enriching Bourgeois Era.
Nor of course was innovation entirely novel in 1700. Women and men
had always been creative in weaving cloth or knapping arrowheads. An Upper Paleolithic burst of creativity in making tools and ornaments and musical instruments gives another sign of the coming of fully modern language, as does the use of oceangoing boats to get proto-New-Guineans and proto-Australians across the Wallace Line shortly before 40,000 BCE.[18] Around 4000 BCE the Indo-Europeans of Ukraine, whose remote ancestors had turned left on leaving Africa, appear to have domesticated the horse; and they went on to conquer or repopulate or inspire Europe, Iran, and much of South Asia. Around 3500 BCE the Taiwanese natives, originally from China, and ultimately like all of us out of Africa, appear to have invented the outrigger canoe; and they went on to populate the Pacific.
Until 1800 of our era, however, such innovations had allowed expansion of humans merely in numbers and ecological range, or the replacement of one culture by another, without improvement of the human lot. Until two centuries ago, for Malthusian reasons, the better clothing and better boats had done nothing to change the $3-a-day life—nothing at all, from Zulu farmer to Eskimo hunter. If things got better for a certain group of people, the people had more children, and so things got worse, by what economists call “diminishing returns to labor, given land.” Even the “European marriage pattern,” in which many people did not marry at all, or married late, having lower completed family sizes, made things only a little better, and could not break through $3 a day. True, as the anthropologist Marshall Sahlins argued long ago, and persuasively, the “stone-age economics” of hunter-gatherers allowed working many fewer hours than agriculturists did.[19] (But the late economic historian Stanley Lebergott sharply contradicted Sahlins’s implied anti-industrial story: “Americans could choose equal simplicity [as the Bushman’s life], and live on 300 nuts a day, half a pound of raw meat, and some vegetables. But they would need to work only 2 hours a week to do so [a fraction even of Sahlins’s low estimate of the time budget], given superior U.S. production methods.”[20]) Shifting to the laborious cultivation of fields of grain, requiring storehouse and guards, turned out to support cities and temples and then literacy. It was a tradeoff, a sparsely populated hunting/grazing ground of illiterates traded off for a densely populated city with a rich elite and a few readers and many fewer writers (and the seeds, long dormant, of the modern industrial world).[21] Yet the point here is that neither choice, neither the Amazonian nor the Sumerian, improved the scope of the average person until the industrial world. For most people up to 1800, whether average nomads or average Romans, a typical life was poor, narrow, illiterate, sick, and brief.
What was different after 1800, and with unstoppable force after 1900, was a novel and immense and sustained, almost lunatic, regime of innovation, finally breaking the Malthusian curse. As people enriched, they eventually started having fewer rather than more children, quite against Malthusian expectations—though even with large families, such as in bourgeois England, the enrichment would have taken place, so unprecedentedly powerful was it. The innovation of steam engine or corporate form or airplane or Wal-Mart for the first time made ordinary people richer, then vastly richer, than had the ancient routine of hunter-gatherer or nomadic herder or settled farmer or imperial subject, and encouraged the moderns to have smaller and more educated families. The riches interacted with the society and the polity in a blessed liberalism. Mario Vargas Llosa, the novelist and liberal, argued that one should read the Spanish public intellectual of the 1920s, José Ortega y Gasset, “to rediscover that—contrary to what those people bent on reducing liberalism to an economic recipe for free markets, low tariffs, controlled government spending and the privatization of business, suppose—liberalism is, above all, an attitude toward life and society based on tolerance and coexistence, on respect for the rich history and unique experiences of different cultures, and on a firm defense of liberty. . . . Economic freedom is a key element of the liberal doctrine, but certainly not the only one.”[22] Think again on the poverty and illiberality of your ancestors, and rejoice.
The text above is an excerpt from Bourgeois Dignity: Why Economics Can’t Explain the Modern World, the second volume of Deirdre McCloskey’s trilogy on the ethical and historical origins of modern prosperity.
[1]. A full defense of this and the other categories of virtues is given in McCloskey 2006a, especially pp. 151–194.
[2]. As the economist Daniel Klein has argued to me.
[3]. Cather 1931 (1992), p. 675.
[4]. Lilburne, “The Just Defense of John Lilburne against Such as Charge Him with Turbulency of Spirit,” 1653, at http://www.strecorsoc.org/docs/defence1.html. After quoting the formulation, H. N. Brailsford commends it as “one of the earliest and one of the boldest state-
ments of the liberal creed,” and notes its strict libertarian implications—but then in the collectivist spirit of the British left in 1961, he rejects them (Brailsford 1961, p. 75).
[5]. De la Court 1669, Part III, chap. viii, “Conclusion.” The wording here is from the 1743 English edition.
[6]. North 1691, preface, p. viii. I have modernized spelling and punctuation here and elsewhere, to avoid pointless distancing of the authors. The distinguished literary critic Stephen Greenblatt praises the Oxford edition’s (1986) modernizing of Shakespeare’s spelling for avoiding thereby “a certain cozy, Olde-English quaintness” (Greenblatt 1997, p. 73). The distance of the olde ffolke should be experienced by their strange thoughts, not by their premodern conventions of spelling and punctuation. For the same reason I have changed British spellings to American, “honour” to “honor” and the like, except in titles. Sometimes I cannot resist retaining “-eth” in sixteenth-century quotations. It’s so cozy and quaint.
[7]. Tribe 1995; Rothschild 2001, p. 20.
[8]. Jacob 1981 (2006); Israel 2001.
[9]. Heckscher 1931, vol. 1, p. 173.
[10]. Dean Stanley, 1834, quoted in MacLeod 1998, p. 96.
[11]. MacLeod 1998, p. 108.
[12]. MacLeod 1998, p. 108.
[13]. Goody 2010, p. 60.
[14]. Cohen 1992. An eloquent summary of the evidence for “capitalist” institutions in ancient Mesopotamia is Baechler 1971 (1975), pp. 37–38.
[15]. Grierson 1978, pp. 3, 5; Demetz 1997, p. 16.
[16]. Grantham 2003, p. 73.
[17] Tönnies 1887 (1957), p. 34.
[18]. Kuhn, and others 2001: they speak of the emergence over a wide area rather suddenly of “redundant, standardized ornament forms” suggesting communicative purposes. The earlier art was rare, and unique, item by item, in design: it appears not to be a result of a talking culture. The evidence from genetic family trees and the (controversial) evidence from historical linguistics of the Joseph Greenberg-Merritt Ruhlen school points also to about the same time. The issue of when humans acquired language, though, is fraught, and recent findings suggest that some signs of it (voice box and brain ability; art; burial) occurred much earlier in Southern Africa.
[19]. Sahlins 1974 (2004), esp. chap. 2, “The Domestic Mode of Production: The Structure of Underproduction.”
[20]. Lebergott 1993, pp. 63–64.
[21]. The economics of hunters vs. farmers was lucidly outlined by Lebergott 1984, pp. 13–16.
[22]. Vargas Llosa 2008, p. 68.