The Correct Story Praises “Capitalism”

The Bourgeois Revaluation and the Modern World

_{Another selection from the trilogy here. Today, we move forward within the second volume, arriving at Chapter Five of Bourgeois Dignity: Why Economics Can’t Explain the Modern World.}

The book is the second of a half dozen planned, three written including this second one, the first published in 2006, intended as a full-scale defense of our modern form of innovation—universally if misleadingly called “capitalism.” The books are meant for skeptical people like you who think markets and innovations need such a defense. The implied readers of the books are at present rarities—a scientist who takes the humanities seriously, admitting that novels and philosophies are data, too; a humanist who enjoys calculation, admiring even economistic arguments; or a common reader who delights in listening patiently to evidence and reasoning that overturn most of his own left- or right-wing folklore about what happened in the economy 1600 to the present.^[1]

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 bourgeoisie—innovating a fulling mill for woolens or innovating a bank for paying florins in England easily—happened after 1300 in isolated parts of the European south (Florence, Venice, Barcelona), as in many other scattered locales in the world, and in many other eras, and after 1400 or so in other towns of the south (such as Lisbon) and the Hansa towns of the north, and after 1600 in larger chunks of the north (Holland), and after 1700 in England, Scotland, and British North America, and after 1800 in southern Belgium, the Rhineland, northern France, and then the world. Such words or conversations or rhetoric mattered to the economy, and still do. The words enabled after 1800 a big fall in poverty and a big rise in spirit.

Yet in the nineteenth century the artists and the intellectuals—the “clerisy,” as Samuel Taylor 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 clerisy provided the “scientific” justifications for such attitudes, as in scientific materialism or scientific imperialism or scientific racism or scientific Malthusianism or, lately, scientific neoeugenics. The scientific schemes reasserted an elite control over newly liberated poor people. Consider Mao’s Little Red Book, say, or Hitler’s Mein Kampf, which extracted from the scientific dreams of left or right a plan for an ant-colony society governed by the Party. Or consider the more polite versions of elite control, such as the great statistician Karl A. Pearson in 1900 approving of scientific racism in support of imperialism: “It is a false view of human solidarity, which regrets that a capable and stalwart tribe of white men should advocate replacing a dark-skinned tribe which can. . . [not] contribute its quota to the common stock of human knowledge.”^[2] In 1925 he wrote against Eastern European Jewish migration to Britain, on the grounds that “this alien Jewish population is somewhat inferior physically and mentally to the native population,” for example in “cleanliness of clothing.”^[3] Or consider the great American jurist Oliver Wendell Holmes, Jr., sneering in 1895 in social Darwinist style that “from societies for the prevention of cruelty to animals up to socialism, we express. . . how hard it is to be wounded in the battle of life, how terrible, how unjust it is that any one should fail.”^[4] In 1927 he approved of compulsory sterilization on grounds of scientific utilitarianism and eugenics: “It is better for all the world, if instead of waiting to execute degenerate offspring for crime, or to let them starve for their imbecility, society can prevent those who are manifestly unfit from continuing their kind. The principle that sustains compulsory vaccination is broad enough to cover cutting the Fallopian tubes. Three generations of imbeciles are enough.”^[5] Sadly, such stuff wasn’t “junk science” or “pseudoscience,” easily demarcated by methodological rule from the real stuff. It was regular, front-line, widely accepted science, such as now the environmentalism without economic content published regularly in Science. Science is a wonder, but it is not always the same as wisdom. And a little learning is a dangerous thing.

The clerisy’s anti-innovation and antimarket and antiliberty rhetoric in the years since 1848, though repeated down to yesterday, misapprehends the scientific history. The clerisy says that every spillover in the environment justifies world-governmental control. Scientific economics suggest that it does not. Some spillovers are best treated at the local level, or by making not less private property, but more. The clerisy says that lack of elite control of human breeding will cause the race to degenerate. Scientific genetics suggests that it does not. Human abilities flourish from diversity, as they will in a while in Africa. The clerisy says that innovation impoverishes people. Scientific economics suggests that it does not, as it has not in Hong Kong. It enriches most of them. The clerisy says that state planning or nationalist mobilization is better than voluntary commercial peace. Scientific history suggests not, as it was not in the USSR. Socialism and nationalism have regularly disrupted the prosperity provided by bourgeois commerce. The clerisy says that the modern urban world is alienated. Scientific sociology replies on the contrary that bourgeois life in France strengthened numerous if weak ties, and freed people from village tyrannies, as it did in modern Spain or Greece. The clerisy says that the market and its economic liberties are politically dangerous. Political science suggests that on the contrary they give ordinary people dignity and make them mild and tolerant, as they have in the Netherlands and Sweden, at any rate by the standards of alternative arrangements.

The present book is the second, I say, in a trilogy called the Bourgeois Era. The Bourgeois Era offers an “apology” for the modern world—in the Greek sense of a defense at a trial, and in the theological sense, too, of a preachment to you-all, my best-beloved infidels or ultraorthodox or middle-of-the-road. My beloved friends on the political left have joined with my also beloved, but also misled, friends on the political right in asserting that capitalism, as Marx put it in 1867, is “solely the restless stirring for gain. This absolute desire for enrichment, this passionate hunt for value.”^[6] Many on the left have been outraged by what they take to be the bad material results of the history—though misapprehended, because the desire for enrichment is after all universal, and the material results of its modern bourgeois fulfillment have in fact been startlingly good for the world’s poor, not bad. Many on the right have on the contrary been pleased by the same misapprehended history. They join their opponents on the left in believing that Marx was right to define the modern world as the restless stirring for gain. Yet such greed, they affirm with a smirk, is “good” for three-car garages and time-shares in Barbados. Get used to it.

And on both political wings many of a less ruthless character are dismayed by the spiritual vulgarity they detect in a novel greed. They look into the future darkly. Such pessimism typifies some on the left (though accompanied by a longer-term apocalyptic optimism), who see in every business downturn the final crisis of global capitalism. Another sort of pessimism typifies some on the right (accompanied by no such longer-term optimism), who see in every new cultural fashion a corruption arising from the rule of the vulgar.

Admittedly, myopic pessimism, from the right or left, sells. The late Allan Bloom’s right-wing pessimism, The Closing of the American Mind (1987), sold half a million copies merely in hardback. Shortly afterwards, at a little conference we both attended, Allan was the assigned commentator on an essay of mine entitled “If You’re So Smart, Why Aren’t You Rich?” He started with a little joke: “I should note that I now am rich.” Paul Ehrlich’s The Population Bomb (1968) sold three million copies total, and little or none of what it confidently predicted came to pass. I bought a copy of Ravi Bahtra’s The Great Depression of 1990 (another event which didn’t happen, though in 1987 that book, too, sold well) at a prepulping sale in 1992 for $1.57. I show it to my students as an exhibit against economic pessimism.

So I admit that my optimistic view of the modern world and especially of its long-term prospects is less profound than the Chicken Little predictions of my good friends on the right and on the left. Still, when set beside the conviction that the End is Near, the optimistic, anti–Chicken Little view I retail here has at least the merit of being scientifically correct.

The first volume, The Bourgeois Virtues: Ethics for an Age of Commerce (2006), asked whether a bourgeois life can be ethical. It replied that it is, and was, and could be, and should be. The present volume, as I’ve said, makes the case for an ethico-rhetorical Industrial Revolution by criticizing on economic and historical grounds the materialist explanations. I’m not happy to be so critical of a materialist economics that I have loved and learned and taught since 1961. An economist like me loves the routine of trade or of accumulation or property, which are things she understands pretty well, and can even calculate. Allow me to show you on the blackboard the proofs that protectionism is bad and that investment is good. And look here: I can show with a little math that a lack of private property leads to a tragedy of the commons. Beautiful stuff.^[7]

By contrast, ideas and rhetoric stand at present outside her economic science. Even the best economists fail to notice that humans are talking animals and that the human animals put more of meaning into their talk than “I bid $2.71828.”^[8] In explaining the most important economic event since the invention of agriculture, or perhaps since the invention of language, the facts seem to demand a rejection of the materialist and antirhetorical ideology which I so long advocated. A materialist economic science appears, in other words, to need a good deal of amending. We need humanomics.

The opposite of “materialist” is not exactly “idealist,” if by that is understood a Hegelian notion of an Absolute Sprit or the like. The scientific alternative to a dogmatically materialist, positivist, behaviorist ideology would still admit that the mode of production matters, sometimes. But it would note that talk matters, too. Consider the parallel terms in a nonphilosopher’s philosophizing, “objective” and “subjective.” As any philosopher after the critics of Descartes can tell you, neither objective nor subjective can be had (recent philosophers have put the point in a more sophisticated way, but it still approximately holds). If the “objective” is “what is really there in God’s eyes,” what Kant called the “noumena,” we humans here below will never quite see it, short of the Second Coming. Is the universe made from strings? Does the communion wafer change in essence to Christ’s body? Is it possible for the Cubs to win the World Series? And if the “subjective” is what is in my mind, you can never really know it (notice the rhetorical force of the word “really” in such statements). Do you really experience the color red the same way I do? Neither of us will ever know. Do all the brain scans you want: you can’t feel exactly like me.

What we can know is neither objective nor subjective, but (to coin a word) “conjective,” what we know together in our talk.^[9] Spell it out: con-jective, together thrown. The chief discovery of the humanities in the twentieth century was that a human science must be about the conjective, the palpable phenomena to examine. No science can be about the hopelessly unattainable objective or subjective. As Niels Bohr put it, even physics is about what we humans can say. The conjunctivist admits of course that a clam sits in the sea, perhaps even in God’s eyes, but she points out that what constitutes a “fruit of the sea” for eating purposes is always a matter of agreement among humans. That doesn’t make “clam” a figment, but it does make it conjective. As Sahlins put it in 1976, rejecting the “procrustean opposition of ‘idealism’ and ‘materialism’ by which the discussion customarily proceeds,” a human “must live in a material world, [a] circumstance he shares with all organisms, but. . . he does so according to a meaningful scheme of [human] devising, . . . according to a definite symbolic scheme which is never the only one possible.”^[10] He says elsewhere that “nature as it exists in itself is only the raw material provided by the hand of God, waiting to be given meaningful [note the word] shape and content by the mind of man. It is as the block of marble to the finished statue.”^[11]

It all strikes me now as obviously so. But when Sahlins first said it (he following many others from Protagoras to Dewey and James, to Wittgenstein, with his contemporaries Geertz and Rorty) I rejected it out of hand. I am not, believe me, an idealist by predilection. I’m a disappointed materialist. I was in the early 1970s a stubbornly ignorant positivist, as most economists are, but came gradually to realize that the conjective is what we can know. You should become a conjectivist, too.

A third volume, soon to appear, The Bourgeois Revaluation: How Innovation Became Virtuous, 1600–1848, shows in detail how attitudes toward bourgeois life changed. A fourth, tentatively called Bourgeois Rhetoric: Interest and Conversation during the Industrial Revolution, develops an amended economic science acknowledging that humans do speak their meanings, and shows how their speaking changed to make possible the bourgeois dignities and liberties and revaluations and rising boats.^[12] It cashes in the claim by the economist and philosopher Frank Knight in 1935 that “economics is a branch of aesthetics and ethics to a larger degree than of mechanics.”^[13] A fifth volume, Bourgeois Enemies: The Treason of the Clerisy, 1848 to the Present, will explore how after the failed revolutions of 1848 we European artists and intellectuals became in our rhetoric so very scornful of the bourgeoisie, and how the gradual encroachment of such ideas motivated the disasters of the twentieth century—and how they can motivate fresh disasters if we neglect to contradict the left- or right-wing theories. And the last, Bourgeois Times: Defending the Defensible, will look into present-day anti-innovation and antimarket rhetoric, such as the alleged sins of globalization, the despoilment of the environment, the evil of commercial free speech known as advertising, the alleged dependence of innovation on an alleged reserve army of the unemployed.

The books lean on each other. If your worries about the ethical foundations of innovation and markets are not sufficiently met here, they perhaps are more fully met in The Bourgeois Virtues. If you feel that not enough attention is paid here to unemployment or global warming, more will be paid in Bourgeois Times. If you wonder how the present book can claim that words matter so much, consider The Bourgeois Revaluation and Bourgeois Rhetoric. If you feel that the story here does not explain why such a successful bourgeois life came to be despised in deeply progressive and deeply conservative circles, some of your questions will be answered in Bourgeois Enemies.

The apology does seem to take six volumes. I apologize. A philosopher recently wrote, to explain why he crammed his opus on “warranted [Christian] belief” into three stout books rather than allowing himself four, that “a trilogy is perhaps unduly self-indulgent, but a tetralogy is unforgivable.”^[14] Here you have in prospect, God help you, a sestet, and this is merely volume 2.^[15] But bourgeois life and innovation since 1848 have had a voluminously bad press, worse even than warranted Christian belief. The prosecution in the past two centuries has written out the indictment of the developing free and bourgeois and business-respecting civilization in many thousands of eloquent volumes, from the hands of Robert Southey and Schiller and Carlyle and Dickens (the critics of innovation, I repeat, were not all of the left), of Alexander Herzen, Baudelaire, Marx, Engels, Mikhail Bukharin, Ruskin, William Morris, Nietzsche, Prince Kropotkin (my hero at age fourteen, when I fell in love with socialist anarchism down at the local Carnegie-financed library), Tolstoy, Shaw, Ida Tarbell, Upton Sinclair, Rosa Luxemburg, Emma Goldman (another admired figure, when I later as a young economist reaffirmed anti-statist convictions), D. H. Lawrence, Bertrand Russell, Lenin, Trotsky (companion of a brief adolescent flirtation with communism), John Reed (ditto), Veblen, Ortega y Gasset, Sinclair Lewis, T. S. Eliot, Virginia Woolf, Mussolini, Giovanni Gentile, Hitler, Heidegger, Wittgenstein, F. R. Leavis, Karl Polanyi, Walter Benjamin, Sartre, Simone de Beauvoir, Simone Weil, Dorothy Day, Woody Guthrie (whose songs and singing made me for a while in college a Joan Baez socialist—the leftish critics of bourgeois dignity and liberty have all the best tunes), Pete and Peggy Seeger (ditto), Ewan MacColl (so too), Lewis Mumford, Hannah Arendt, Herbert Marcuse, Maurice Merleau-Ponty, J. K. Galbraith, Louis Althusser, Allan Bloom, Fredric Jameson, Saul Bellow, Howard Zinn, Noam Chomsky, Eric Hobsbawm, E. H. Carr, E. P. Thompson, Ernest Mandel, Immanuel Wallerstein, Paul Ehrlich, Stuart Hall, C. L. R. James, George Steiner, Jacques Lacan, Stanley Hauerwas, Terry Eagleton, Alain Badiou, Slavoj Žižek, Charles Sellers, Barbara Ehrenreich, Naomi Klein, Nancy Folbre (a personal friend), Jamie Galbraith (ditto), and Jack Amariglio (double ditto). Few people have defended commerce from this magnificent flood of eloquence from the pens of left progressives and right conservatives—jeremiads against markets and innovation which stretch from the Hebrew prophets through Plato and the Analects of Confucius down to the present—except on the economist’s Prudence Only grounds that after all a great deal of money is made there. In offering merely six volumes in defense, after such grand prolixity in the prosecution, I admire my restraint. As Henry Fielding wrote toward the end of Tom Jones, a “prodigious” book, “When thou hast perused the many great events which this book will produce, thou wilt think the number of pages contained in it scarce sufficient to tell the story.”^[16]

The Bourgeois Era, in other words, tries to initiate a defense of our bourgeois lives that goes beyond economic balance sheets, without ignoring them. It offers the outlines of an ethical rhetoric for our globalized souls, an idealism of ordinary life such as Henrik Ibsen and Willa Cather were formulating. It recoups the virtues for the lives, neither heroic nor saintly, that most of us in fact live. If you were raised on the left or the left-middle and were taught to believe that innovation and the bourgeois life were born in sin, and that they impoverish and corrupt the world, as in globalization and financial meltdowns, perhaps one or two of the books can plant a seed of doubt. And likewise, perhaps, the books can plant the self-critical seed if you were raised on the right or the right-middle and were taught to believe that (admittedly) capitalism is “solely the restless stirring for gain, this absolute desire for enrichment,” if a materially efficacious desire for enrichment—but that the economists and calculators have corrupted our holiness and demeaned our nobility, as in rock music and feminism and deconstruction since the 1960s, and the glory of Europe is extinguished forever.^[17]

What the philosopher Charles Taylor said about “authenticity” my books say about “innovation”: “The picture I am offering is rather that of an ideal that has degraded but that is very worthwhile in itself, and indeed, I would like to say, unrepudiable by moderns. . . . What we need is a work of retrieval, through which this ideal can help us restore our practice.”^[18] Innovation backed by probourgeois rhetoric made people well-to-do, and made possible the modern pursuit of authenticity. The sestet 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 bourgeoisie sadly ignoble and unspiritual, might—just might—be mistaken. And as a work of retrieval perhaps it will persuade you that to continue attacking a virtuous life in commerce, or for that matter to continue defending a greedy life in commerce, corrupts our souls, and poisons our politics.

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]. In modern literary criticism in the English-speaking world the term “humanist” is a fighting word, but the fight is sidestepped here. Here all it means is “a scholar in an academic department such as English, French, music, art, philosophy, theology, parts of history, that is, a person interested in die Geisteswissenschaften or les sciences humaines.” It does not mean partisans of the approach to literary criticism following Matthew Arnold, T. S. Eliot, the Blooms (Harold or Allan), or my own teacher, Howard Mumford Jones.

[2]. Pearson 1900, pp. 26–28. Even on strictly genetic grounds, by the way, Pearson’s remark is mistaken. Africa’s genetic diversity ensures that it will eventually make contributions to the quota of human knowledge that will put the white and yellow and brown “races” in the shade.

[3]. Pearson and Moul 1925. Peart and Levy 2005 give a full and penetrating treatment of the Pearson and Moul paper (chap. 5, pp. 87–103) in the context of the new eugenic social sciences of the late nineteenth and early twentieth centuries.

[4]. Holmes 1895, p. 264.

[5]. Holmes, Buck v. Bell, 274 U.S. 200 (1927). See Alschuler’s (2000) devastating critique of Holmes.

[6]. Das Kapital 1867, p. 168 (pt. 2, chap. 4, “The General Formula for Capital”). The usual English translation (though approved by Engels) errs in many important details. Thus the Moore and Aveling translation (in, say, the Modern Library edition): “this boundless greed after riches” (p. 171). But the word “greed” is not in the German (Gier, or Geltgier), and is in fact a word eschewed by Marx throughout the book, as moralistic and unscientific.

[7]. You may admire its beauty in McCloskey 1985b, available on line at deirdremccloskey.org.

[8]. McCloskey 2008d.

[9]. McCloskey 1994c, pp. 201, 311, 347, 353, 378.

[10]. Sahlins 1976, pp. ix, viii. Sahlins views culture as a tertium quid, such as the conjective (p. x).

[11]. Sahlins 1976, p. 210.

[12]. Drafts of both volumes are available at deirdremccloskey.org.

[13]. Knight 1935, p. 97.

[14]. Plantinga 2000, p. xiv.

[15]. I won’t call it a “hexology,” the proper Greek corresponding to a tetralogy (“hex” in West Germanic languages means “witch”); and I certainly won’t, despite the temptations of higher book sales, call it by the vulgar Latin-Greek mix “sexology.”

[16]. Fielding 1749, vol. 2, p. 409 (book 18, chap. 1).

[17]. The point that left and right complain in much the same ways about the bourgeoisie is made also by Immanuel Wallerstein in 1983 (1995), p. 115.

[18]. Taylor 1992, p. 23.