Three Quick Ways to Understand the Trilogy on the Bourgeois Era (2006, 2010, 2016)

I’ll be from May 2025 onward reproducing here a selection of the manuscript chapters from the three volumes.

I’ll be from May 2025 onward reproducing here a selection of the manuscript chapters from the three volumes.

I have found, however, that people have a hard time grasping the argument as a whole. Like the blind men feeling one or another piece of an elephant, they see one part and take it for the whole. Or they try to make the part have come across fit into some familiar thought. Both of these are natural and human, and use them myself, too much. Time is scarce, and the reading of books has no end. For example, at the most superficial, someone will read hurriedly the mere title of the first volume, and then say to himself, “Ah, I see. Deirdre is Max Weber in drag. She thinks people worked hard and saved more, and that caused our riches.” Quite wrong.

The trilogy is a sustained and complicated argument, not merely a puffing up of an auricle that could have been expressed easily in 25 pages of the American Economic Review, or even the Journal of Economic History. Whether you come to agree with my hypothesis, as of course I hope you do, or spot some decisive logic or evidence that refutes it, as for the good of the science I also hop you do—though I admit with less enthusiasm, I admit—it would be good to know what you’re talking about, yes?

Here I give three quick ways to get started. (Of course I want you to read every one of the 1,700 or so pages of the Trilogy. Put it on your bedside table and read a chapter every evening, piously. It’s well worth the trouble, I assure you.)

I fancy that the Trilogy is important for economic and historical science. The Author would. And she also fancies that the argument of the whole coheres—though it’s complicated, using all the resources of humanomics, from simple economic mathematics to poems, plays, novels, philosophy, social history and the rest of what’s relevant to the full story of how we got rich and whether it corrupted us. Later books and articles since 2016 have extended the argument.

But here are three ways to grasping what the hypothesis is and what evidence there is for it, in brief.

1.) The First Precis: Jacket Copy

The briefest way to grasp the argument is to read the texts of the jacket copy (so to speak) for each volume:

The Bourgeois Virtues: Ethics for an Age of Commerce. 616 + xviii pp. University of Chicago Press, 2006.

The story of “The Bourgeois Era” (the trilogy of which this is the first volume) is of the rise of a prudential rhetoric in the Netherlands and England in the 17^th century, its triumph in the Scottish Enlightenment and American colonial thought in the 18^th century, and its decline after 1848 from, as Shaw once called it, the Great Conversion. An ethics of the virtues, as old as Aristotle and as new as feminist ethics, provides a way out of the growing self-hatred of the bourgeoisie. “Bourgeois virtue” is not a contradiction in terms. Economists are recognizing that virtue underlies a market economy; economic historians have long understood so in the lives of Quakers and the vital few. What the social sciences have not recognized since the 18^th century and its notion of doux commerce is that a market economy can underlie the virtues. Not all virtues. Some virtues—in fact the ones we celebrate in philosophy and myth—are pagan or Christian, aristocratic and plebeian. We need new philosophies and myths, new readings of the ancient virtues, to suit a world in which we are all now bourgeois.

Bourgeois Dignity: Why Economics Can’t Explain the Modern World . 571 + xvi pp., University of Chicago Press, 2010,

What made us modern, and rich, was a change in ideology, or “rhetoric.” First in little Holland and then in Britain a new dignity and liberty for the middle class freed innovation. A unique wave of gadgets, and then a tsunami, raised incomes from $3 a day to $30 a day and beyond. In her brilliant, engaging survey of what we thought we knew about the shocking enrichment since 1776, McCloskey shows that the usual materialist explanations don’t work—coal, slavery, investment, foreign trade, science, surplus value, imperialism, division of labor, education, property rights, climate, genetics. Ranging from Adam Smith to the latest theories of economic growth, she details what went wrong with the routine explanations. The most important secular event since the domestication of plants and animals depended on more than routine. It arose from liberties around the North Sea achieved in the civil and anti-imperial wars from 1568 to 1688, and above all from a resulting revaluation of bourgeois life. In recent decades China and then India have revalued their business people, and have thereby given hundreds of millions of people radically fuller lives. The modern world began in northwestern Europe, in the same way: ideas led. Bourgeois Dignity reshapes our thinking about economic history. It will require a reshaping of a good deal of other history as well, turning the story of our times away from the materialism typical of Marxist or economic approaches. It introduces a humanistic science of the economy—”humanomics”—directing attention to meaning without abandoning behavior, using literary sources without ignoring numbers, combining the insights of the human and the mathematical sciences.

Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World. 787 + xlii pp. University of Chicago Press, 2016

But why the Bourgeois Revaluation of the 18^th century? The book explores the reputational rise of the bourgeoisie, that is, a Bourgeois Revaluation overtaking Holland and then Britain from Shakespeare’s time to Adam Smith. It made the modern world by giving a reason for ordinary people to innovate. The material changes—empire, trade—were shown in Bourgeois Dignity (2010) to be wholly inadequate to explain the explosion of incomes 1800 to the present. What pushed the world into frenetic innovation were the slowly changing ideas 1600-1848 about the urban middle class and about their material and institutional innovations. A class long scorned by barons and bishops, and regulated into stagnation by its very own guilds and city councils and state-sponsored monopolies, came to be treasured—at least by the standard of earlier, implacable scorn—from 1600 to the present, first in Holland and then in Britain and then the wider world. And when the Amsterdamers after 1600 or so, and the Londoners and Bostonians after 1700 or so, commenced innovating, more people commenced admiring them. The new valuation of the bourgeoisie, a new dignity and liberty for ordinary people was a change peculiar to northwestern Europe in how people applied to economic behavior the seven old words of virtue—prudence, justice, courage, temperance, faith, hope, and love. With more or less good grace the people around the North Sea began to accept the outcome of trade-tested betterment. Then people did so in Europe generally and its offshoots, and finally in our own day in China and India. Most came for the first time to regard creative destruction as just, and were courageous about responding to it, and hopeful in promoting it. Most people, with the exception of the angry clerisy of artists and intellectuals (and even them only after 1848), stopped hating the bourgeoisie as much as their ancestors had for so very long before. Many started loving it. In consequence during a century or two the northwest Europeans became shockingly richer in goods and in spirit. That is, not economics but “humanomics” explains our riches and our ethics.

2.) The Second Precis: Tables of Contents

My practice, which I first learned long ago from the books of Alexis de Tocqueville, and began to follow in the Trilogy, and now in all my books, is to make my chapters short (readable in a single sitting, like a short story) and to entitle them with declarative sentence telling what they say.

The result is that if you read the titles of the chapters in sequence, as in the Tables of Contents reproduced here, you can see in some detail what the argument of the book is. In Volume 1, The Bourgeois Virtues, I had acquired the habit of short chapters but had not settled into the habit of renting the chapters with their themes. But its Contents have little statements for each chapter that will serve.

A.) The Table of Contents of The Bourgeois Virtues

• The Bourgeois Virtues

• Preface

• Acknowledgements

• Apology: A Brief for the Bourgeois Virtues

  • I. Exordium: The Good Bourgeois

  • II. Narratio: How Ethics Fell

  • III. Probatio A: Modern Capitalism Makes Us Richer

  • IV. Probatio B: And Lets Us Live Longer

  • V. Probatio C: And Improves Our Ethics

  • VI. Refutatio: Anti-Capitalism is Bad For Us

  • VII. Peroratio

• Appeal

  • 1 The Very Word "Virtue"

    • “Virtue ethics” says that acting well is not a matter of finding the most general ethical rule but of finding stories for a good character. Can a bourgeois person be virtuous?

  • 2 The Very Word "Bourgeois"

    • "Bourgeois" is used here for the middle class: haute, petite, and the angry clerisy sprung from it, too.

  • 3 On Not Being Spooked by the Word "Bourgeois"

    • "Bourgeois" need not be a term of contempt.

• Part 1:

• The Christian and Feminine Virtues 1: Love

  • 4 The First Virtue: Love Profane and Sacred

    • Ethics comes from stories. Love stories, for example.

  • 5 Love and the Transcendent

    • Love is for people; but it is love for Art, Science, Nature, God, too.

  • 6 Sweet Love vs. Interest

    • Loving is not the same thing as "maximizing utility."

  • 7 Bourgeois Economists Against Love

    • Some economists mistake this. Adam Smith did not.

  • 8 Love and the Bourgeoisie

    • Capitalism requires love.

  • 9 Solidarity Regained

    • The market has not eroded love.

• Part 2:

• The Christian and Feminine Virtues 2: Faith and Hope

  • 10 Faith as Identity

    • The other “theological virtues,” besides love, also figure in any human society, even a commercial one. For instance, faith—who you are.

  • 11 Hope and Its Banishment

    • Hope in a commercial society is mobility. Its transcendent version makes the clerisy uneasy.

  • 12 Against the Sacred

    • Religious hope and faith were disdained by some, 1700 to the present. But other faiths and hopes expanded.

  • 13 Van Gogh and the Transcendent Profane

    • Thus for example Vincent van Gogh, who was hopeful, not crazy.

  • 14 Humility and Truth

    • Such “theological” virtues—faith, hope, and love—show themselves even in some economists, and in any good scientist.

  • 15 Economic Theology

    • Economics needs a theology. In fact, it already is a theology

• Part 3:

• The Pagan and Masculine Virtues: Courage, with Temperance

  • 16 The Good of Courage

    • Courage is modeled by Achilles or Odysseus. The stories are myths, in the double sense: culturally important tales; and false in detail and sometimes in spirit. A bourgeois army is a contradiction, as at Srebrenica.

  • 17 Anachronistic Courage in the Bourgeoisie

    • Yet bourgeois men have adopted the mythical histories of knights and cowboys as their definition of masculinity.

  • 18 Taciturn Courage Against the “Feminine”

    • For example they have taken taciturnity as a marker of masculinity, against the talk-talk of the marketplace. Male bourgeois writers in America came to need a way of distinguishing themselves from women. Therefore they adopted a nostalgia for the silent, violent hero.

  • 19 Bourgeois vs. Queer

    • And they needed to distinguished themselves from homosexuals, a big project in American literature and in English, German, and American law.

  • 20 Balancing Courage

    • The outcome was some generations of courage-loving men, especially those of the Greatest Generation, modeling their behavior in business on myths of aristocracy. But Temperance is a virtue, too.

• Part 4:

• The Androgynous Virtues: Prudence and Justice

  • 21 Prudence is a Virtue

    • Prudence makes other virtues work, and is proper benevolence towards the self.

  • 22 The Monomania of Immanuel Kant

    • The other, Kantian system that has replaced virtue ethics in the thinking of philosophers in the past two centuries was built on an excess of Justice: The Maxim.

  • 23 The Storied Character of Virtue

    • We do good mainly by story and example, not by maxim.

  • 24 Evil as Imbalance, Inner and Outer

    • Virtue ethics emphasizes balances in the soul and in the society: temperance and justice.

  • 25 The Pagan-Ethical Bourgeois

    • The four pagan virtues, like the three Christian, can fit a commercial society, as in Amsterdam's City Hall.

• Part 5:

• Systematizing the Seven Virtues

  • 26 The System of the Virtues

    • The virtues fit together, sacred to profane, feminine to masculine.

  • 27 A Philosophical Psychology?

    • Modern positive psychology comes to the same conclusion, near enough.

  • 28 Ethical Striving

    • The approach to good is like the approach to truth. The two depend on each other and on the characters we shape in our stories.

  • 29 Ethical Realism

    • The ethical is "real," all right.

  • 30 Against Reduction

    • Kantianism assumes identity is already formed, and utilitarianism ignores identity entirely. We need ethical identities, partly given, partly taken.

  • 31 Character(s)

    • The identities for example can be aristocratic, peasant, priestly, or bourgeois.

  • 32 Anti-Monism Again

    • Virtue ethics is better than Kantianism.

  • 33 Why Not One Virtue?

    • Aristotelianism is better than Platonism.

  • 34 Dropping the Virtues, 1532-1958

    • The West used the Seven Virtues until Machiavelli made an art of the state. Latterly even moralists like Jane Austen or George Orwell have disdained systems of the virtues.

  • 35 Other Lists

    • Many other lists lack discipline.

  • 36 Eastern and Other Ways

    • The Confucian discipline is similar to Western virtue ethics, though not identical.

  • 37 Needing Virtues

    • The amoralism of the cynics Nietzsche, Holmes, Posner is a pose.

• Part 6:

• The Bourgeois Uses of the Virtues

  • 38 P & S and the Capitalist Life

    • The Profane and the Sacred both work in capitalism.

  • 39 Sacred Reasons

    • The sacred motivates the market for Art, of course; but it figures in most markets.

  • 40 Not by P Alone

    • The Sacred is bigger than economists think.

  • 41 The Myth of Modern Rationality

    • The novelty and extent of rationality in capitalism is usually exaggerated.

  • 42 God's Deal

    • But the Sacred need not drive out Prudence.

  • 43 Necessary Excess?

    • Greed is not necessary for a capitalist economy to prosper.

  • 44 Good Work

    • Capitalistic work is consistent with religious values.

  • 45 Wage Slavery

    • And capitalistic production is not dehumanization.

  • 46 The Rich

    • Even successful capitalists can be virtuous.

  • 47 Good Barons

    • Profit is good, not bad, for our persons and our souls.

  • 48 The Anxieties of Bourgeois Virtues

    • So the bourgeoisie can be good. Usually it is good. And yet it worries.

B.) The Table of Contents of Bourgeois Dignity

Preface and Acknowledgments

1. The Modern World Was an Economic Tide, But Did Not Have Economic Causes.

2. Liberal Ideas Caused the Innovation

3. And a New Rhetoric Protected the Ideas.

4. Many Other Plausible Stories Don’t Work Very Well.

5. The Correct Story Praises “Capitalism.”

6. Modern Growth Was a Factor of at Least Sixteen.

7. Increasing Scope, Not Pot-of-Pleasure “Happiness,” Is What Mattered,

8. And the Poor Won.

9. Creative Destruction Can Be Justified Therefore on Utilitarian Grounds.

10. British Economists Did Not Recognize the Tide,

11. But the Figures Tell.

12. Britain’s (and Europe’s) Lead Was an Episode,

13. And Followers Could Leap over Stages.

14. The Tide Didn’t Happen because of Thrift;

15. Capital Fundamentalism Is Wrong.

16. A Rise of Greed or of a Protestant Ethic Didn’t Happen;

17. “Endless” Accumulation Does Not Typify the Modern World.

18. Nor Was the Cause Original Accumulation or a Sin of Expropriation.

19. Nor Was It Accumulation of Human Capital, Until Lately.

20. Transport or Other Domestic Reshufflings Didn’t Cause It,

21. Nor Geography, nor Natural Resources;

22. Not Even Coal.

23. Foreign Trade Was Not the Cause, Though World Prices Were a Context,

24. And the Logic of Trade-as-an-Engine Is Dubious,

25. And Even the Dynamic Effects of Trade Were Small.

26. The Effects on Europe of the Slave Trade and British Imperialism Were Smaller Still,

27. And Other Exploitations, External or Internal, Were Equally Profitless to Ordinary Europeans.

28. It Was Not the Sheer Quickening of Commerce

29. Nor the Struggle over the Spoils.

30. Eugenic Materialism Doesn’t Work;

31. Neo-Darwinism Doesn’t Compute;

32. And Inheritance Fades.

33. Institutions Cannot Be Viewed Merely as Incentive-Providing Constraints,

34. And So the Better Institutions, Such as Those Alleged for 1689, Don’t Explain,

35. And Anyway the Entire Absence of Property Is Not Relevant to the Place or Period

36. And the Chronology of Property and Incentives Has Been Mismeasured,

37. And So the Routine of Max U Doesn’t Work.

38. The Cause Was Not Science,

39. But Bourgeois Dignity and Liberty Entwined with the Enlightenment.

40. It Was Not Allocation:

41. It Was Words.

42. Dignity and Liberty for Ordinary People, in Short, Were the Greatest Externalities,

43. And the Model Can Be Formalized.

44. Opposing the Bourgeoisie Hurts the Poor,

45. And the Bourgeois Era Warrants Therefore Not Political or Environmental Pessimism

46. But an Amiable, if Guarded, Optimism.

Notes

Works Cited

C.) The Table of Contents of Bourgeois Equality

• Exordium: The Three Volumes Show That We Are Rich Because of an Ethical and Rhetorical Change vii

• Acknowledgments

• First Question: What Is to Be Explained?

• Part I

  • A Great Enrichment Happened, and Will Happen

    • 1 The World Is Pretty Rich, but Once Was Poor

    • 2 For Malthusian and Other Reasons, Very Poor

    • 3 Then Many of Us Shot Up the Blade of a Hockey Stick

    • 4 As Your Own Life Shows

    • 5 The Poor Were Made Much Better Off

    • 6 Inequality Is Not the Problem

    • 7 Despite Doubts from the Left

    • 8 Or from the Right and Middle

    • 9 The Great International Divergence Can Be Overcome

• Second Question: Why Not the Conventional Explanations?

• Part II

  • Explanations from the Left and Right Have Proven False

    • 10 The Divergence Was Not Caused by Imperialism

    • 11 Poverty Cannot Be Overcome from the Left by Overthrowing “Capitalism”

    • 12 “Accumulate, Accumulate” Is Not What Happened in History

    • 13 But Neither Can Poverty Be Overcome from the Right by Implanting “Institutions”

    • 14 Because Ethics Matters, and Changes, More

    • 15 And the Oomph of Institutional Change Is Far Too Small

    • 16 Most Governmental Institutions Make Us Poorer

• Third Question: What, Then, Explains It?

• Part III

  • Bourgeois Life Had Been Rhetorically Revalued in Britain at the Onset of the Industrial Revolution

    • 17 It Is a Truth Universally Acknowledged that Even Dr. Johnson and Jane Austen Exhibit the Bourgeois Revaluation

    • 18 No Woman but a Blockhead Wrote for Anything but Money

    • 19 Adam Smith Exhibits Bourgeois Theory at Its Ethical Best

    • 20 Smith Was Not a Mr. Max U, but Rather the Last of the Former Virtue Ethicists

    • 21 That Is, He Was No Reductionist, Economistic or Otherwise

    • 22 And He Formulated the Bourgeois Deal

    • 23 Ben Franklin Was Bourgeois, but Not Prudence-Only, and He Embodied Betterment

    • 24 By 1848 a Bourgeois Ideology Had Wholly Triumphed

• Part IV

  • A Pro- Bourgeois Rhetoric Was Forming in England around 1700

    • 25 The Word “Honest” Shows the Changing Attitude toward the Aristocracy and the Bourgeoisie

    • 26 And So Does the Word “Eerlijk”

    • 27 Defoe, Addison, and Steele Show It, Too

    • 28 The Bourgeois Revaluation Becomes a Commonplace, as in The London Merchant

    • 29 Bourgeois Europe, for Example, Loved Measurement

    • 30 The Change Was in Social Habits of the Lip, Not in Psychology

    • 31 And the Change Was Specifically British

• Part V

  • Yet England Had Recently Lagged in Bourgeois Ideology, Compared with the Netherlands

    • 32 Bourgeois Shakespeare Disdained Trade and the Bourgeoisie

    • 33 As Did Elizabethan England Generally

    • 34 Aristocratic England, for Example, Scorned Measurement

    • 35 The Dutch Preached Bourgeois Virtue

    • 36 And the Dutch Bourgeoisie Was Virtuous

    • 37 For Instance, Bourgeois Holland Was Tolerant, and Not for Prudence Only

• Part V

  • Reformation, Revolt, I Revolution, and Reading Increased the Liberty and Dignity of Ordinary Europeans

    • 38 The Causes Were Local, Temporary, and Unpredictable

    • 39 “Democratic” Church Governance Emboldened People

    • 40 The Theology of Happiness Changed circa 1700

    • 41 Printing and Reading and Fragmentation Sustained the Dignity of Commoners

    • 42 Political Ideas Mattered for Equal Liberty and Dignity

    • 43 Ideas Made for a Bourgeois Revaluation

    • 44 The Rhetorical Change Was Necessary, and Maybe Sufficient

• Part VII

  • Nowhere Before on a Large Scale Had Bourgeois or Other Commoners Been Honored

    • 45 Talk Had Been Hostile to Betterment

    • 46 The Hostility Was Ancient

    • 47 Yet Some Christians Anticipated a Respected Bourgeoisie

    • 48 And Betterment, Though Long Disdained, Developed Its Own Vested Interests

    • 49 And Then Turned

    • 50 On the Whole, However, the Bourgeoisies and Their Bettering Projects Have Been Precarious

• Part VIII

  • Words and Ideas Caused the Modern World

    • 51 Sweet Talk Rules the Economy

    • 52 And Its Rhetoric Can Change Quickly

    • 53 It Was Not a Deep Cultural Change

    • 54 Yes, It Was Ideas, Not Interests or Institutions, Which Changed, Suddenly, in Northwestern Europe

    • 55 Elsewhere Ideas about the Bourgeoisie Did Not Change

• Fourth Question: What Are the Dangers?

• Part IX

  • The History and Economics Has Been Misunderstood

    • 56 The Change in Ideas Contradicts Many Ideas from the Political Middle, 1890–1980

    • 57 And Many Polanyish Ideas from the Left

    • 58 Yet Polanyi was Right about Embeddedness

    • 59 Trade-Tested Betterment is Democratic in Consumption

    • 60 And Liberating in Production

    • 61 And Therefore Bourgeois Rhetoric Was Better for the Poor

• Part X

  • That Is, Rhetoric Made Us, but Can Unmake Us

    • 62 After 1848 the Clerisy Converted to Anti-betterment

    • 63 The Clerisy Betrayed the Bourgeois Deal, and Approved the Bolshevik and Bismarckian Deals

    • 64 Antic-consumerism and Pro-Bohemianism Were Fruits of the Antibetterment Reaction

    • 65 Despite the Clerisy’s Doubts

    • 66 What Matters Ethically Is Not Equality of Outcome, but the Condition of the Working Class

    • 67 A Change in Rhetoric Made Modernity, and Can Spread It

3.) The Third Precis: The Prose Front Matter

The third way is to read in succession the prose of the front matter each volume. The “Exordium” of Bourgeois Equality is the longest and most comprehensively summarizing.

A.) Preface to The Bourgeois Virtues

While on an airplane reading John Casey’s Pagan Virtue: An Essay in Ethics (1990), then recently published, it struck me suddenly that bourgeois virtue needed a similar treatment. Maybe it was the thinness of the air. I took out my primitive laptop and hammered away. The flight attendant asked me to quiet down. Out of the hammered notes came an essay, “Bourgeois Virtue” (1994), in The American Scholar.

Age fifty or so, my second education began. As Peter Dougherty put it in a book with a theme similar to mine, a few economists now understand the blessed Adam Smith's "lesser known, yet surpassingly powerful, civic, social, and cultural legacy, lodged in the phrase 'moral sentiments'.¹ We few—lagging many decades behind sociologists and social psychologists and literary folk—have finally noticed the ethical soil in which an economy grows. We came to the understanding through economic history (my own case) or game theory, through experimental economics or economic policy, through confrontations with personal faiths, political and religious. A theory of moral sentiments beyond utilitarianism requires stepping outside of economics. You can see it better there.

As you will soon realize, though, even an economist with some historical and rhetorical and philosophical interests is badly educated for moralizing the bourgeois life. I discovered that the story of the demoralization of our economic theories, and the hope for their remoralization, was about much more than the internal history of economics or of economists or even of the economy. To tell the Adam-Smithian story of bourgeois virtues required schooling in ethics, theology, classics, poetry, sociology, social psychology, literary history, art history, intellectual history, philosophy, and twenty other fields in which I am embarrassingly far from expert.

The present book tells what the “virtues” are and how they flourish—or wither—in a commercial society. The next, Bourgeois Towns: How a Capitalist Ethic Grew in the Dutch and English Lands, 1600-1800, will tell how in the 17^th and 18^th centuries the virtues fared theoretically and practically in northwestern Europe, and with what consequences for the 19^th century, material and spiritual. The Treason of the Clerisy: How Capitalism Was Demoralized in the Age of Romance will tell of the sad turn after 1848 against the bourgeoisie by the artists and intellectuals of Europe and its offshoots. It too had consequences, among them August 1914 and October 1917. And Defending the Defensible: The Case for an Ethical Capitalism will tell how bourgeois values have on balance helped rather than hurt the poor and the culture and the environment. The four books propose a fresh start in our attitudes—or at any rate the clerisy's attitudes—towards how we earn a living.

A wise historian said, "Study problems, not periods." All right: the present book asks, "How are the virtues relevant, if they are, to a bourgeois life?" The second asks, "How did Europe and its offshoots become pro-bourgeois yet anti-virtuous, 1600-1800?" The third, "How did the Europeans become anti-bourgeois, though still anti-virtuous, after 1848?" And the fourth, "How can we regain a virtuous respect for who we are, bourgeois and capitalist and commercial nowadays, all?"

To put it another way, using the vocabulary that we Americans have heard so much during recent elections, the project is to explain the Red States to the Blue. Ad bellum purificandum, as Kenneth Burke once put it, to make our differences less lethal. Or it is to explain the Midwest and South to the East and West, the Flyover States to the Coasties. The conservatives to the progressives. Or, in an older vocabulary, to explain America to Europe. Or still older, Rome to Greece.

B.) Preface to Bourgeois Dignity

A big change in the common opinion about markets and innovation, I claim, caused the Industrial Revolution, and then the modern world. The change occurred during the seventeenth and eighteenth centuries in northwestern Europe. More or less suddenly 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. The result was modern economic growth.

That is, ideas, or “rhetoric,” enriched us.² The cause, in other words, was language, that most human of our accomplishments. The cause was not in the first instance an economic/material change—not the rise of this or that class, or the flourishing of this or that trade, or the exploitation of this or that group. To put the claim another way, our enrichment was not a matter of Prudence Only, which after all is a virtue possessed by rats and grass, too. A change in rhetoric about prudence, and about the other and peculiarly human virtues, exercised in a commercial society, started the material and spiritual progress. Since then the bourgeois rhetoric has been alleviating poverty worldwide, and enlarging the spiritual scope of human life. The outcome has falsified the old prediction from the left that markets and innovation would make the working class miserable, or from the right that the material gains from industrialization would be offset by moral corruption.

In other words, I argue that depending exclusively on materialism to explain the modern world, whether right-wing economics or left-wing historical materialism, is mistaken. The two books to follow will make the positive case for a rhetorical, or ideological, cause of our greatly enlarged human scope. Here the case is negative. The usual and materialist economic histories do not seem to work. Bourgeois dignity and liberty might.

Such a theme is old-fashioned, as old as eighteenth-century political theory. Or it is new-fashioned, as new as twenty-first-century studies of discourse. Either way, it challenges the usual notions about “capitalism.” Most people harbor beliefs about the origins of the modern economy that historical and economic science have shown to be mistaken. People believe, for example, that imperialism explains European riches. Or they believe that markets and greed arrived recently. Or they believe that “capitalism” required a new class or a new self-consciousness about one’s class (as against a new rhetoric about what an old class did). Or they believe that economic events must be explained “ultimately,” and every single time, by material interests. Or they believe that it was trade unions and government protections that have elevated the working class. None of these is correct, as I hope to persuade you. The correct explanation is ideas.

I’ve tried to write a book engaging the educated reader. But the argument has to use the findings of economic and historical specialists, and to get down into some of the details of their arguments. I tell the story of modern economic growth, summarizing what we have thought we knew from 1776 to the present about the nature and causes of the wealth of nations—how we got refrigerators and college degrees and secret ballots. The book tests the traditional stories against the actually-happened, setting aside the stories that in light of the recent findings of scientific history don’t seem to work very well. A surprisingly large number of the stories don’t. Not Marx and his classes. Not Max Weber and his Protestants. Not Fernand Braudel and his Mafia-style capitalists. Not Douglass North and his institutions. Not the mathematical theories of endogenous growth and its capital accumulation. Not the left-wing’s theory of working-class struggle, or the right-wing’s theory of spiritual decline.

Yet the conclusion is in the end positive. As the political scientist John Mueller put it, capitalism—or as I prefer to call it, “innovation”—is like Ralph’s Grocery in Garrison Keillor’s self-effacing little Minnesota town of Lake Wobegon: “pretty good.”³ Something that’s pretty good, after all, is pretty good. Not perfect, not a utopia, but probably worth keeping in view of the worse alternatives so easily fallen into. Innovation backed by liberal economic ideas has made billions of poor people pretty well off, without hurting other people.⁴ By now the pretty good innovation has helped quite a few people even in China and India. Let’s keep it.

The Big Economic Story of our times has not been the Great Recession of 2007–2009, unpleasant though it was. And the important moral is not the one that was drawn in the journals of opinion during 2009—about how very rotten the Great Recession shows economics to be, and especially an economics of free markets. Failure to predict recessions is not what is wrong with economics, whether free-market economics or not. Such prediction is anyway impossible: if economists were so smart as to be able to predict recessions they would be rich. They’re not.⁵ No science can predict its own future, which is what predicting business cycles entails. Economists are among the molecules their theory of cycles is supposed to predict. No can do—not in a society in which the molecules are watching and arbitraging.

The important flaw in economics, I argue here, is not its mathematical and necessarily mistaken theory of future business cycles, but its materialist and unnecessarily mistaken theory of past growth. The Big Economic Story of our own times is that the Chinese in 1978 and then the Indians in 1991 adopted liberal ideas in the economy, and came to attribute a dignity and a liberty to the bourgeoisie formerly denied. And then China and India exploded in economic growth. The important moral, therefore, is that in achieving a pretty good life for the mass of humankind, and a chance at a fully human existence, ideas have mattered more than the usual material causes. As the economic historian Joel Mokyr put it recently in the opening sentence of one of his luminous books, “economic change in all periods depends, more than most economists think, on what people believe.”⁶ The Big Story of the past two hundred years is the innovation after 1700 or 1800 around the North Sea, and recently in once poor places like Taiwan or Ireland, and most noticeably now in the world’s biggest tyranny and the world’s biggest democracy. It has given many formerly poor and ignorant people the scope to flourish. And contrary to the usual declarations of the economists since Adam Smith or Karl Marx, the Biggest Economic Story was not caused by trade or investment or exploitation. It was caused by ideas.

Innovation backed by ideology, then, promises in time to give pretty good lives to us all. Left and right tend to dismiss the other’s ideology as “faith.” The usage devalues faith, a noble virtue required for physics as much as for philosophy, and not necessarily irrational. But maybe both sides are correct. A socialist maintains her faith in governmental planning despite the evidence that it doesn’t work to the benefit of the poor. A conservative maintains his faith that what’s good for the military-industrial complex is good for the country despite the evidence that it impoverishes and coarsens the people.

I claim that a true liberalism, what Adam Smith called “the obvious and simple system of natural liberty,” contrary to both the socialist and conservative ideologue, has the historical evidence on its side. Despite the elements of regulation and corporatism defacing it (and the welfare programs improving it), it has worked pretty well for the poor and for the people for two centuries. I reckon we should keep it—though tending better to its ethics.

C.) The [Long and Summarizing] Exordium to Bourgeois Equality

Why are we so rich? Who are “we”? Have our riches corrupted us?

“The Bourgeois Era,” the series of three long books here completed —thank God—answers

• first, in The Bourgeois Virtues: Ethics for an Age of Commerce (2006), that the commercial bourgeoisie—the middle class of traders, inventors, and managers—is on the whole, contrary to the conviction of the “clerisy” of artists and intellectuals after 1848, pretty good, and pretty much always has been so in human history;

• second, in Bourgeois Dignity: Why Economics Can’t Explain the Modern World (2010), that the modern world was made not by the usual material causes, such as coal or thrift or capital or exports or imperialism or good property rights or even good science, all of which have been widespread in other cultures and other times, but by very many technical and some few institutional ideas among a uniquely revalued bourgeoisie, on a large scale at first peculiar to northwestern Europe;

• and third, in this volume, Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World, that a novel way of looking at the virtues and at bettering ideas arose in northwestern Europe from a novel liberty and dignity enjoyed by all commoners, among them the bourgeoisie, and from a startling revaluation by the society as a whole of the trading and betterment in which the bourgeoisie specialized. The revaluation, called “liberalism,” in turn derived not from some ancient superiority of the Europeans but from egalitarian accidents in their politics 1517–1789. That is, what mattered were two levels of ideas—the ideas in the heads of entrepreneurs for the betterments themselves (the electric motor, the airplane, the stock market); and the ideas in the society at large about the businesspeople and their betterments (in a word, that liberalism). What were not causal were the conventional factors of accumulated capital and institutional change—which happened, to be sure, but were largely dependent on betterment and liberalism.

The upshot since 1800 has been a gigantic improvement for the poor, such as many of your ancestors and mine, and a promise now being fulfilled of the same result worldwide—a Great Enrichment for even the poorest among us.

These are controversial claims. They are, you see, optimistic. For reasons I do not entirely understand, the clerisy after 1848 turned toward nationalism and socialism, and against liberalism, and came also to delight in an ever-expanding list of pessimisms about the way we live now in our approximately liberal societies, from the lack of temperance among the poor to an excess of carbon dioxide in the atmosphere. Antiliberal utopias believed to respond to the pessimisms have been popular among the clerisy. Its pessimistic and utopian books have sold millions. But the twentieth-century experiments of nationalism and socialism, of syndicalism in factories and central planning for investment, of proliferating regulation for imagined imperfections in the market, did not work. And most of the pessimisms about how we live have proven to be mistaken. It is a puzzle. Perhaps you yourself still believe in nationalism or socialism or proliferating regulation. And perhaps you are in the grip of pessimism about growth or consumerism or the environment or inequality.

Please, for the good of the poor, reconsider.

§

Let me tell you what the trilogy argues and how each of the three books answers the others. The project is one long, complicated argument. It is complicated not because I am hiding the ball but because the argument covers a lot of history and economics and politics, and depends on many sorts of evidence, historical and literary and quantitative. I’m an economist, and the question of why we grew rich and what we should think about the enrichment turns in part on economic facts and concepts. Therefore I offer from time to time some explanations directed at non-economists of why so many economists admire markets and profit and productivity. But I’m also an historian, and the scientific question here is historical. Therefore throughout I offer, too, some recent and internationally comparative perspectives on historical research, offerings directed at non-historians, and even at some of my beloved colleagues in history. Yet I have also been a professor of English and of communication, and I’ve taught philosophy a bit, too. Therefore I do not neglect to report the evidence from the humanities about economies and their histories, reports directed at whomever will listen. No wonder the books are so long.

Within each book you can see the argument in fair detail by consulting the table of contents. In the first book a brief summary—no more than four lines—appeared under each chapter title. In the second book I hit on the idea of outlining the argument in declarative sentences that serve as chapter titles and are repeated in the running heads. If you get confused—I have myself, often—take a look. Keep your eye on the ball.

The trilogy chronicles, explains, and defends what made us rich—the system we have had since 1848, usually but misleadingly called modern “capitalism.” The system should rather be called “technological and institutional betterment at a frenetic pace, tested by unforced exchange among all the parties involved.” Or “fantastically successful liberalism, in the old European sense, applied to trade and politics, as it was applied also to science and music and painting and literature.” The simplest version is “trade-tested progress.”⁷ Many humans, in short, are now stunningly better off than their ancestors were in 1800. And the rest of humanity shows every sign of joining the enrichment.

A crucial point is that the greatly enriched world cannot be explained in any deep way by the accumulation of capital, as economists from Adam Smith through Karl Marx to Thomas Piketty have on the contrary believed, and as the very word “capitalism” seems to imply. The word embodies a scientific mistake. Our riches 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 bricks, BAs, and bank balances—the capital accumulations—were of course necessary. But so were a labor force and liquid water and the arrow of time. Oxygen is necessary for a fire. But it would be at least unhelpful to explain the Chicago Fire of October 8–10, 1871 by the presence of oxygen in the earth’s atmosphere. Better: a long dry spell, the city’s wooden buildings, a strong wind from the southwest, and, if you disdain Irish immigrants, Mrs. O’Leary’s cow. The modern world cannot be explained, I show in the second volume, Bourgeois Dignity: Why Economics Can’t Explain the Modern World, by routine brick-piling, such as the Indian Ocean trade, English banking, canals, the British savings rate, the Atlantic slave trade, *slavery, *cotton, natural resources, the enclosure movement, the exploitation of workers in satanic mills, or the accumulation in European cities of capital, whether physical or human. Such routines are too common in world history and too feeble in quantitative oomph to explain the thirty- or hundredfold enrichment per person unique to the past two centuries.

Hear again that last, astonishing fact, discovered by economic historians over the past few decades. It is: in the two centuries after 1800 the trade-tested goods and services available to the average person in Sweden or Taiwan rose by a factor of 30 or 100. Not 100 percent, understand—a mere doubling—but in its highest estimate a factor of 100, nearly 10, percent, and at least a factor of 30, or 2,900 percent. The Great Enrichment of the past two centuries has dwarfed any of the previous and temporary enrichments. Explaining it is the central scientific task of economics and economic history, and it matters*,too, for any other sort of social science or recent history.

In this third volume I try to show that the massively better ideas in much of technology, such as textiles and food preparation, and in some institutions, such as universities and forward markets, not capital accumulation or government policies or union organizing, provide the explanation. As a wise man put it, humans recently have “invented the method of invention.” How so? The ideas for the inventions, I claim here, were released for the first time by a new liberty and dignity for commoners, expressed as the “equality” of the book’s title—that is, by the ideology of European liberalism. Ideas of equality accomplished a most surprising thing.

The great oomph of liberty and dignity can be shown by contraries. The linguist Kyoko Inoue explains how a Western notion of “individual dignity” gained a certain following in Japanese society during the early twentieth century, especially among the few Japanese Christians.⁸ Yet when the Japanese word for character or dignity (jinkaku) was used in the MacArthur-imposed constitution after World War II, most Japanese still viewed it as expressing rank, as in the older English plural, “dignities”—something like the opposite of the recent Western idea of dignity to be accorded to everyone, equally. Thus the constitution’s assertion of “dignity” for women was misunderstood (usually innocently) as merely reaffirming the low rank of women in the Japanese hierarchy. The persistent denial of full dignity to half the population has not been good for the Japanese economy—at a time when the old heartland of liberalism in northwestern Europe has inched closer to realizing its radical nineteenth-century ideal that all men and women are created equal.

The modern world was not caused by “capitalism,” which is ancient and ubiquitous, as for example in Japan itself during the seventeenth century. The modern world was caused by egalitarian liberalism, which was in 1776 revolutionary, being at the time most prevalent* in places like the Netherlands and Switzerland and Britain and British North America—though even in such islands of liberalism a minority view. Then it spread. The Great Enrichment, 1800 to the present, the most surprising secular event in history, is explained by a proliferation of bettering ideas springing from a new liberalism, against the jinkaku of rank.

The enrichment, I repeat, is recent. Some centuries before 1800 a few technological ideas had started to be borrowed by Europe from China and other economies to the east and south—paper, for example, and gunpowder, and the silk worm, and the blast furnace. But from the seventeenth century onward, and especially after 1800, the political and social ideas of liberalism shockingly extended the technology, through equality of liberty and dignity in Holland and Britain and Belgium and above all in the United States, and then beyond. The economic historian Joel Mokyr in a new book chronicles the improvements in communication and the welcoming of novelties that made for a freewheeling and largely egalitarian Republic of Letters after 1500, and especially after 1600.⁹ The outcome of such rhetorical developments was a technological explosion, especially after 1800, that radically improved on Europe’s old overseas borrowings. The Great Enrichment is not to be explained, that is, by material matters of race, class, gender, power, climate, culture, religion, genetics, geography, institutions, or nationality. On the contrary, what led to our automobiles and our voting rights, our plumbing and our primary schools, were the fresh ideas that flowed from liberalism, that is, a new system of encouraging betterment and a partial erosion of hierarchy.

Since capital readily accumulates in response to a genuinely bettering idea, and is not therefore the initiating cause, the fraught C-word, “capitalism,” does not make many appearances here. The dishonored B-word, “bourgeois,” though, appears all over the place, most prominently in the titles of all three volumes. “Bourgeois” (“boor-ZHWAH”) was taken self-consciously into English from French. As an adjective applying to the precisely urban middling sort I am talking about it has been employed in English from the early eighteenth century, along with the vaguer phrase that eventually came to dominate, “middle class.”

One task of the trilogy here, starting with the first volume, The Bourgeois Virtues, is to revalue the people of this middle class, or bourgeoisie (“boor-zhwah-ZEE”)—the entrepreneur and the merchant, the inventor of carbon-fiber materials and the contractor remodeling your bathroom, the improver of automobiles in Toyota City and the supplier of spices in New Delhi. The second volume then turns to economic history, and the third now to social and intellectual history, to show in detail that the ideas imagined by the bourgeoisie had arisen in the eighteenth century out of a new liberty and a new dignity accorded to ordinary people. Democracy of rights in voluntary trade and in polling booths, a democracy giving commoners a voice in the church and in the economy and in politics, made people bold, liberating them to have a go in business.¹⁰ In the historical lottery the idea of an equalizing liberty and dignity was the winning ticket, and the bourgeoisie held it.

Yet after the failed revolutions in Europe during the hectic year of 1848—compare 1968—a new and virulent detestation of the bourgeoisie infected the artists, intellectuals, journalists, professionals, and bureaucrats—the “clerisy” I’ve mentioned, as it was called by Coleridge, on a German pattern. The Germans word was Clerisei, or later Bildungsbürgertum, meaning the cultivated and reading enthusiasts for Kultur as against the commercial and bettering bourgeoisie.¹¹ The clerisy of Germany, Britain, and especially France came to hate merchants and manufacturers and indeed anyone who did not admire the clerisy’s books and paintings. Flaubert declared, “I call bourgeois whoever thinks basely.” He wrote to George Sand in 1867, “Axiome: la haine du bourgeois est le commencement de la vertu, ” which is to say, it is an axiom that hatred of the bourgeois is the beginning of virtue.¹²

In 1935 the liberal Dutch historian Johan Huizinga noted that the hatred had become general among the clerisy:

in the nineteenth century, “bourgeois” became the most pejorative term of all, particularly in the mouths of socialists and artists, and later even of fascists. . . . How useful it would be from time to time to set up all the most common political and cultural terms in a row for reappraisal and disinfection. . . . For instance, liberal would be restored to its original significance and freed of all the emotional overtones that a century of party conflict has attached to it, to stand once again for “worthy of a free man.” And if bourgeois could be rid of all the negative associations with which envy and pride, for that is what they were, have endowed it, could it not once more refer to all the attributes of urban life?¹³

Such automatic sneering at the bourgeoisie needs to stop. It is an unattractive brand of self-hatred, since most of us, as owners and sellers of at least human capital, and in our pension funds or house equity *the *owners of financial and physical capital, are bourgeois. True, if one insists on using the word “bourgeois” as, say, Jean-Paul Sartre and Simone de Beauvoir used it, to mean the worst and most inauthentic types of town life in France circa 1950, then it is not going to be much of an intellectual feat to conclude that bourgeois life leads straight to . . . well . . . the worst and most inauthentic types of town life in France circa 1950. But I urge you to stop using the word as a term of contempt, and to start using it scientifically and colorlessly to mean “owners and managers in town, risk takers or word workers, big or small in their capital, disproportionately literate and numerate, earning a living by conversation and calculation.” Then we can find out by actual inquiry whether or not it is virtuous to hate them.

Like the mandarins of old China or les honnêtes hommes of early modern France, the members of the modern clerisy view themselves as uniquely ethical on account of their book learning, including book learning about ethics—or at least their daily reading of Le Monde or the New York Times. The notion that a person who truly grasps the meaning of “ethics” will in fact be ethical was Socrates’s claim by way of Plato. In view of the numerous highly learned and book-reading but unethical people one meets, one rather doubts it. Yet the clerisy embraces the Platonic notion. The notion flourishes, for example, in the attitude of Dutch bureaucrats in the city halls, who view themselves as well qualified by arts degrees and ethical superiority and subscriptions to NRC Handelsblad for the job of protecting the sadly ignorant inferior classes from the ravenous capitalists down in de markt.

In the eighteenth century certain members of the clerisy, such as Voltaire and Tom Paine, courageously advocated our liberties in trade. And in truth our main protection against the ravenous has been competition in trade—not City Hall or Whitehall, which have had their own ravenous habits, backed by violence. During the 1830s and 1840s, however, a much enlarged clerisy, mostly the sons of bourgeois fathers, commenced sneering at the economic liberties their fathers were exercising so vigorously, and commenced advocating the vigorous use instead of the state’s monopoly of violence to achieve one or another utopia, soon.

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 nonmarket golden age in which rents and stasis and hierarchy ruled. Such a conservative and Romantic vision of olden times fit 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, for example, 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 their own scientistic enthusiasm 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 ravenous bourgeoisie—such thrilling actions to be led 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 under regulation or syndicalism or central planning or collectivization all the monopolies into one supreme monopoly called the state. In 1965 the Italian liberal Bruno Leoni (1913–1967) observed that “The creation of gigantic and generalized monopolies is [said by the left to be] precisely a type of ‘remedy’ against so-called private ‘monopolies.’”¹⁴

While all this deep thinking was roiling the clerisy of Europe, the commercial bourgeoisie—despised by the right and the left, and by many in the middle, too, all of them thrilled by the Romantic radicalism of books like Mein Kampf or What Is to Be Done—created the Great Enrichment and the modern world. The Enrichment gigantically improved our lives. In doing so it proved scientifically that both social Darwinism and economic Marxism were mistaken. The genetically inferior races and classes and ethnicities proved not to be so. They proved to be creative. The exploited proletariat was not immiserized. It was enriched. In the enthusiasm for the materialist but deeply erroneous pseudo-discoveries of the nineteenth century— nationalism, socialism, Benthamite utilitarianism, hopeless Malthusianism, Comtean positivism, neo-positivism, legal positivism, elitist Romanticism, inverted Heglianism, *Marxism, Freudianism, phrenology, homophobia, historical materialism, hopeful communism, left anarchism, communitarianism, social Darwinism, scientific racism, racial history, theorized imperialism, apartheid, eugenics, tests of statistical significance, geographic determinism, institutionalism, intelligence quotients, social engineering, slum clearance, Progressive regulation, cameralist civil service, the rule of experts, and 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 main, and the one scientifically proven, social discovery of the nineteenth century—which was itself also 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 the democratic, American poet. And he did.

New ideas from the bourgeoisie, and behind them new and encouraging ideas about the bourgeoisie and then about all of the commoners together, made the Great Enrichment. The trilogy here defends such an ideational hypothesis against a materialism long dominant.

The first volume, whose subtitle, Ethics for an Age of Commerce, gives away its theme, asks, Can a life in business be ethical? Can it be governed by virtues that include a businesslike prudence but are not limited to it? The answer, in executive summary, is Yes. Prudence is the virtue of profit, planning, know-how, savoir faire, common sense, efficiency. It’s good to have. We teach it to our dogs and children. “Look both ways when you cross the street.” “Study the balance sheet.” “Provide, provide.” But ethics in business goes beyond the virtue of prudence, and should. Actual businesspeople, being people, exhibit on their best days also love and justice and courage and hope and faith and temperance, and not only for instrumental reasons. The bourgeoisie is not composed entirely of the idiotically prudence-driven characters in a Dilbert comic strip.

The Bourgeois Virtues, in other words, repudiates the economist’s obsession with prudence only, isolated from the other virtues. Philosophers and theologians observe that if a virtue is narrowed down and isolated it becomes a vice. Since the 1930s an army of “Samuelsonian” economists, the dominant ones you hear about, and most of my teachers, has undertaken to narrow down and isolate our economic lives to what it is pleased to call rationality. Samuelsonian thought describes modern economists of the so-called mainstream—modeling exclusively with “constrained maximization,” in which the only virtue acknowledged is prudence.¹⁵

Not every worthy economist is Samuelsonian. An embattled countersquad of economic thinkers, with quite varied politics, has in the twentieth century included Joseph Schumpeter, Ludwig von Mises, Friedrich Hayek, Thorstein Veblen, John R. Commons, John Maynard Keynes, John H. Clapham, Frank Knight, Eli Heckscher, Gunnar Myrdal, Antonio Gramsci, Luigi Einaudi, Joan Robinson, *Walter Eucken, Kenneth Boulding, Ronald Coase, Paul Sweezy, Alexander Gerschenkron, John Kenneth Galbraith, George Shackle, Robert Heilbroner, Theodore Schultz, Albert Hirschman, Bert Hoselitz, Bruno Levi, Noel Butlin, James Buchanan, Thomas Schelling, Robert Fogel, Amartya Sen, Elinor Ostrom, Israel Kirzner, and Vernon Smith. They practice what could be called (Adam) Smithian economics, or what has lately been called “humanomics.” It posits merely a mild tendency to enter on a new project when there might be a net benefit to be earned, leaving plenty of space for the practice also of love, justice, courage, hope, faith, and temperance. Genuine rationality among humans, as noted recently by social psychologists such as Jonathan Haidt and Nicholas Epley, and by the rest of us since the Epic of Gilgamesh, is not prudence only.¹⁶

A few economists are beginning to explore systematically such an economics, inviting back into the story a complete human being, with her ethics and language and upbringing.¹⁷ For example, I am. The trilogy here exhibits a killer app of such an integration of quantity and quality, the sciences and the humanities, economic experiments and literary analyses, yielding—I hope you will come to believe—a plausible explanation of how we became rich in body and spirit.¹⁸

Yet I have to admit right off that “my” explanation is embarrassingly, pathetically unoriginal. It is merely the economic and historical realization in actual economies and economic histories of eighteenth-century liberal thought. But that, after all, is just what the clerisy after 1848 so sadly mislaid, and what the subsequent history proved to be profoundly correct. Liberty and dignity for ordinary people made us rich, in every meaning of the word.

The first, ethical volume repudiates also the anti-economist’s obsession with the vice of prudence, narrowed down and isolated from the other virtues, the vice we call “greed.” Greed is not good. But neither does it especially characterize the bettering world of the modern bourgeoisie, whether in a small business or in a corporate giant. Greed is ancient and human—greed for gold, glory, power, position, sex. When Karsten Bernick in Ibsen’s first bourgeois drama, Pillars of Society (1877), comes to his ethical senses in act 4, he declares, “Even if I haven’t always gone after profit [contradicting the simplest version of greed in the Samuelsonian theory], nonetheless I’m aware now that a hunger and craving after power, status, and influence has been the driving force behind most of my actions.”¹⁹ Yes, all that, and sex too, since the caves, the hunger and craving that is exactly, in the absence of balancing justice and love and temperance, the vice of greed.

Trade-tested betterment since 1800 came in part, of course, from prudence and profit, which would indeed, without other virtues in attendance, constitute the Marxian or Samuelsonian economist’s “rationality” and the anti-economist’s “greed.” The success of the experiment in honoring prudence raised the prestige of the executive virtue. But the betterment came also from the other virtues—hope, justice, courage, love, faith, and temperance—and raised the prestige of commercial versions of these, too. Corporations such as Merck, UPS, Walt Disney, and Lockheed-Martin had by early 2014, out of a sense of commercial justice and not merely out of instrumental calculation, stopped giving money to the *then-homophobic Boy Scouts of America. Likewise, Shell Oil and Campbell Soup allowed in their health-care plans for gender-reassignment surgery. Some few others of the Fortune 500 have not been slow to provide opportunities for women and minorities (hmm, well: in 2014 fewer than 5 percent of the CEOs of S & P 500 companies were women, with more men with the first name “John” than all the women combined). And in the way that business has sometimes been ahead of government in ethical seriousness, so have small businesses sometimes been ahead of the large ones. In other words, a businessperson in the modern world, contrary to the materialist views of the Marxian or Samuelsonian economists and of their antigreed enemies, is not ordinarily a Mr. Max U—Maximizing his Utility—a sociopathic manipulator of the vending machines called “other people.”²⁰ On the contrary, the businessperson walks with others, talks with them, entangled for good or ill in their stories and their metaphors. What news on the Rialto?

§

The trilogy’s second volume, Bourgeois Dignity, which again gives away its punch-line in the subtitle, Why Economics Can’t Explain the Modern World, examines in detail the capital-accumulation and worker-exploitation and other proffered causes in the materialist tales of the British Industrial Revolution, and shows their lack of quantitative oomph. Materialism can’t explain the Industrial Revolution of the eighteenth century. Especially it can’t explain the Great Enrichment that followed in the nineteenth. The book shows by the method of residues that bettering ideas, and especially ideas about betterment—the “bourgeois dignity” of the title—not mainly material interests, drove the modern world. Material interests and most of the institutions expressing them were ancient, and unchanging, and weak in force. What changed was ideology.

The British Industrial Revolution was a glorious start. All credit is due. Yet such novelty-rich revolutions had happened occasionally before, in fifth-century Athens or twelfth-century Song China or fifteenth-century Italy.²¹ What differed this last time was the follow-on, the explosive Great Enrichment of ordinary people, arising from the loosening a Great Chain of Being that had trammeled most humans since the invention of agriculture, keeping men in hand-and-back work and women in arranged marriages. After the loosening and the consequent Enrichment, the son of a freight conductor could became a professor of government at Harvard, the son of a tailor a professor of law at Yale, the daughter of a conservative Southern lawyer a liberal professor of law, philosophy, and classics at the University of Chicago.

Why? The causes were not (to pick from the apparently inexhaustible list of materialist factors promoted by this or that economist or economic historian) coal, thrift, transport, high male wages, low female and child wages, surplus value, human capital, geography, railways, institutions, infrastructure, nationalism, the quickening of commerce, the late medieval run-up, Renaissance individualism, the First Divergence, the Black Death, American silver, the original accumulation of capital piracy, empire*, eugenic improvement, the mathematization of celestial mechanics, technical education, or a perfection of property rights. Such conditions had been routine in a dozen of the leading organized societies of Eurasia, from ancient Egypt and China down to Tokugawa Japan and the Ottoman Empire, and not unknown in Meso-America and the Andes. No: routines cannot account for the strangest secular event in human history, which began with bourgeois dignity in Holland after 1600, gathered up its tools for betterment in England after 1700, and burst on northwestern Europe and then the world after 1800.

Take the routine of property rights, emphasized, for example, by the economist Daron Acemoglu and the political scientist James Robinson in Why Nations Fail (2012). The trouble with their emphasis is that most societies have always enforced property rights. It is what we mean by a “society.” In Mesopotamia two millennia before the common era the cities enforced property rights, as did the societies of ancient Israel, the Viking lands, T’ang China. For that matter the hunter-gatherers and animal herders—First-Nation beaver hunters and Aboriginal plant gatherers and Sami reindeer followers—also enforced this or that institution of property, when it mattered, and when the enforcement did not grossly violate their other ethical convictions. When societies failed to enforce the property rights suited to their ethics, they dissolved into wars of all against all.²²

What then, one naturally asks, was the special ingredient that made routine enforcement of property rights or routine building of canals or routine access to the sea or routine mining of coal so non-routinely fruitful in the Great Enrichment? The second volume answered, as The Bourgeois Virtues had shown in applied ethics, and as Bourgeois Equality shows now in social and intellectual history, that the special ingredient was a change in ethics concerned with other people’s behavior. Note the definition of ethics involved—not individual-on-herself ethics alone, but “social” or “conjective” or “I-and-Thou” ethics, that is, articulated judgments about others. Humans as individuals didn’t get better, or worse; not much. But they did radically change in the conversation of humankind the attitudes toward other humans. What began to characterize northwestern Europe in the seventeenth and eighteenth centuries was not so much new ethics at the level of individual responsibility, though perhaps that improved a little, encouraging and benefiting from arm’s-length trading. Much more important was a change at the social and rhetorical level: “You made a fortune trading with the East. Good.” Or: “That fellow invented a new plastic cooling fan for automobiles. Good.” In other words, the new liberty and dignity for commoners was a sociological event, not a psychological one, and originated in a changing conversation in the society, not at first in psychological self-monitoring by the individual. People in Holland and then England didn’t suddenly start alertly attending to profit. They suddenly started admiring such alertness, and stopped calling it sinful greed.²³

In any case, an institution such as Acemoglu and Robinson think crucial—or a canal or school or coal mine that others think crucial—works well not merely because of good official rules of the game, what Samuelsonian economists call the “incentives” or the “budget lines.” 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 about each other.²⁴ The typical human, it has been shown by careful experiments on our own species and on other great apes, is much inclined to indignation and punishment (though other animals punish too) in order to shame and scorn defectors. A woman is willing to punish defectors in ways that entail even the sacrifice (from the Latin, “make holy”) of her own profits.²⁵ Humans have a sense of justice (as the primatologist Frans de Waal argues, so also do some other animals, if less elaborately), a sense of appropriate behavior toward other people and especially in other people. They will go to lengths to praise and reward manifestations of the virtues—prudence, temperance, courage, justice, faith, hope, and love—and to blame and punish the corresponding vices. The Blessed Adam Smith called such matters of internalized ethics the “impartial spectator”—though a spectator who then gets up on stage to act, for the moral sentiments and the wealth of nations.

A society can craft an official rule against cheating in business. Such a rule would be a “good institution.” It’s even necessary, to discourage the simplest game-theoretic defections and to generate “Schelling points” around which business can gather. True, Hasidic diamond dealers on 47th Street between 5th and 6th Avenues in New York get along without official rules. But the rest of us find the rules helpful institutions. Yet if the rules are 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 a corrupt Shanghai during the 1990s, the economy won’t work as well as it could. The society won’t be, say, Iowa or Sweden, which do about as well as humans can in gently shaming and disciplining corruption. Friends *unjustly help friends in Iowa and Sweden, admittedly. But in Italy and Ecuador people take such corruption a good deal further.²⁶ The extreme absence of a good impartial spectator in the breast, as in the Soviet Union and now in Russia again, makes the written constitution a dead letter.

The crux, that is, is not black-letter constitutions, the written-down constraints, the budget lines, but how the constitutions came about ethically and how they are sustained in social ethics—a continually renegotiated dance. It is located out in the language games in which people play as much as in their solipsistic “utility functions.”²⁷ 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 usually do work—pretty much regardless of imperfections in the written-down rules and incentives, especially if the imperfections fall within the usual range of human folly. The political scientists Elinor and Vincent Ostrom at Indiana University showed repeatedly that a situation that would in Samuelsonian economics always be assumed to 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 sustained talk among serious-minded, ethically disciplined people.²⁸ It was true as well in medieval English villages, which in 1968 the ecologist Garrett Hardin supposed *without *examining *the *evidence were instances of the hopeless case. Ethics undergirds water rights, grazing rights, civil and criminal laws, marriages, friendships, children’s games, adults’ games, clubs, traffic, science, business deals, constitutions—a point that political theorists from Machiavelli and Hobbes through James Buchanan and Martha Nussbaum, in their eagerness to devise a theory *only out of prudence, have tended to overlook.²⁹

The working of the U.S. constitution, for example, has always rested on such ethical grounding. Its crises have arisen from deep disputes about ethics, such as *the dispute between the ethics of the dignity of all people regardless of condition of servitude and the ethics of honoring private property in slaves, or * between the ethics of the right of a woman to control her body and the ethics of the right of a fetus to be born. In January 2001, following the long-contested vote for the presidency, the Democratic candidate, Al Gore, who had won the popular vote in November but not the electoral college, hung by chad in Florida, conceded defeat, when the conservative majority on the Supreme Court spoke. So far the institutions reached. A rule of the game is that a majority of the Court gets the last word. But suppose Gore had not conceded. It was not automatic that he would do so, or written down somewhere in a self-interpreting text. Nor was his decision to concede the election wholly explicable in terms of the incentives facing him, at any rate not the sort of incentives that a Samuelsonian or Marxian economist would admire. Gore’s wanting the good of his country came out of his personal and social ethics, learned at his mother’s knee. So did the acceptance by other Democrats of his defeat, with more or less good grace. The rest of us heartily commend them, and congratulate the mothers who taught them so well. That too was a social part of the ethical dance. We do not view good people like Gore as mere suckers, missing a chance. We honor them, sociologically. The Roman Republic fell because ethics no longer supported its constitution, and a Cicero who did not make the first move in a game of prudence-only was accounted a fool and was put to the sword. Athenian democracy was doomed when early in its long war with Sparta, as Thucydides put it, “words [such as ‘justice’] lost their meaning.”³⁰

The working of any institution depends on such socially supported ethics beyond incentives. To be sure, rules and incentives and opportunity costs are helpfully explicit. Yet they can be corrupted at any level, from board room to shop floor. For serious results the people of any institution, whether a hotel or a university, need to be to some degree seriously ethical from top to bottom, which is why economic development at a high level, or for that matter running a hotel or a university at a high level, is difficult. The participants in an institution or a society needn’t be saints. Quite corrupt economies, such as Britain’s in 1716 or Greece’s in 2016, can nonetheless perform reasonably well by the standard of their times. But to achieve their full promise they need to be sufficiently attentive to the impartial spectator, a sufficiency that can be quantified. All participants, from the CEO to the hotel maid, need to be a little proud of their work and willing to try to do it pretty well, and to be ashamed when a customer or a boss points out an evident failure. You can measure it. And when you find it egregiously bad you can fire the malefactor, or jail him, unless he is protected by force or fraud and a misused monopoly of violence.

Even so, if a substantial minority of the people available for hiring do not have the right kind of impartial spectator in their breasts, and are put beyond instruction by bad child-raising or bad labor laws or bad courts or bad privileges protected by the state, you are stuck with a badly functioning economy, such as Russia’s early and late. In an almost vacant coffee shop in Moscow in 2013 a customer asked politely that the loud rock music, pleasant to the young staff but irritating to old folk, be turned down. The waitress was *shocked that a customer would have an opinion. She indignantly refused. Thus was made evident the seventy years of changing the nature of man under socialism. Ethical persuasions, especially about other people, arousing a hardwired indignation about ethics, are foundational, and can work in good or bad ways.

The trilogy, in other words, argues against the prudence-only obsessions of the economists and of their enemies. Within economics it argues against the factually dubious assertion from the political right that technological betterment comes automatically from private property.³¹ And it argues against the logically dubious assertion from the political left that the betterment comes automatically from artificially high wages.³² Both are what the economists Friedrich Hayek and Vernon Smith, among others practicing a humanomics, call “constructivist,” as against “ecological.”³³ There was little that was constructivist, automatic, material, Samuelsonian, Marxian, institutional, or predictable about the releasing of human creativity from ancient trammels in the eighteenth and, especially, the nineteenth centuries. All praise, then, to a betterment tested in voluntary trade of electricity supply for bread, or labor for doctoring services, permitted by new social and political ideas.

§

We’re back, you see, to the first volume and the bourgeois virtues, and especially to the new praise in the eighteenth century for the commercial virtues as perceived in other people. The modern world was made by a slow-motion revolution in ethical convictions about virtues and vices, in particular by a much higher level than in earlier times of toleration for trade-tested progress—letting people make mutually advantageous deals, and even admiring them for doing so, and especially admiring them when Steve-Jobs-like they imagine betterments. Note again: the crux was sociology, not psychology. Trade-and-betterment toleration was advocated first by the bourgeoisie itself, then more consequentially by the clerisy, which for a century before 1848, I have noted, admired economic liberty and bourgeois dignity, and in aid of the project was willing to pledge its lives, fortunes, and sacred honor. After 1848 in places like the United States and France and Japan, the bulk of ordinary people came slowly to agree. By then, however, as I also noted, much of the avant garde of the clerisy worldwide had turned decisively against the bourgeoisie, on the road to twentieth-century fascism and communism. Yet in the luckier countries, such as Norway or Australia, the bourgeoisie was for the first time judged by many people to be acceptably honest, and was in fact acceptably honest, under new social and familial pressures. By 1900, and more so by 2, the Bourgeois Revaluation had made most people in quite a few places, from Syracuse to Singapore, very rich and pretty good.

One could argue, as Joel Mokyr does, that what mattered for betterment was the change in outlook among a technical elite. An essay he wrote recently with the economic historians Cormac Ó Gráda and Morgan Kelly 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.”³⁴ If one is speaking of the proximate cause, surely he’s right. Mokyr’s heroes are “the top 3–5 percent of the labor force in terms of skills: engineers, mechanics, millwrights, chemists, clock- and instrument makers, skilled carpenters and metal workers, wheelwrights, and similar workmen.”³⁵ One could hardly have such revolutionary machines for the manufacturing in bulk of the wood screw and the nut-and-bolt without men like Henry Maudslay (1771–1831), already educated in making machines. A twenty-two-year old male student of economic history, one “Donald” McCloskey, found hilarious the remark by a historian of the lathe, a Dr. Holtzappel: “Mr. Maudslay effected nearly the entire change from the old imperfect and accidental practice of screw making . . . to the modern exact and scientific mode now generally followed by engineers; and he pursued the subject of the screw with more or less ardor and at an enormous expense until his death in 1835.”³⁶ But Holtzappel was right, and supports Mokyr’s points that a tiny elite mattered and that profit making was not its entire motive.

Yet where did such a technical elite come from, with its education and ardor and expense? In Holland and Britain and the United States it came from ordinary people freed from ancient suppressions of their hopes. Such freeing is the sole way of achieving a sufficient 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 eighteenth century was that the engineers came from the younger sons of its large nobility, such as Napoleon, educated for military careers.³⁷ 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 spinning-machine mechanic. In Britain and its offshoots the career of the enterprising bourgeois or the skilled worker, in the fashion of Napoleon’s army or Nelson’s navy, 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.³⁸ Similarly, Maudslay of the screw-making machine, two year younger than Napoleon and thirteen years younger than Nelson, began work at twelve filling cartridges at the Royal Arsenal, becoming then a blacksmith, and by age eighteen a locksmith, and more. The British working man carried the baton of a field marshal of industry in his rucksack.

Mokyr is taking as given a structure that in fact had a vibrant modern history, a history driven by the new and bizarre ethic of human equality of liberty in law and of dignity in esteem. The economic historian Karine van der Beek believes she is supporting Mokyr when she concludes with persuasive evidence that “the innovations and technological changes that were taking place in eighteenth century England increased the demand for these high quality mechanical workmen.”³⁹ But her case is the opposite of Mokyr’s, which is that what caused the betterment was the supply. The entirely new ethical context, I am claiming, made the demand for the engineers and entrepreneurs grow its own supply, when ardor and opportunity made the supply worth having. The opportunities themselves arose from a new equality in law and in society, encouraging new ideas for Dutch wholesale trade or new ideas for English coal mining. The new and liberal, if partial, equality in Holland and Britain and especially in the United States—for all the lingering sins of pride and snobbery and slavery—allowed many of the ordinary, and extraordinary, to have a go. The economic historian Peter Mathias’s “having a go” then produced in the Great Enrichment a veritable idea-explosion: for example, about nitroglycerine, dynamite, gelignite, TNT, and C-4.

One could argue, again, as the French economist Thomas Piketty and most economists do, that growth depends on capital accumulation—not on a new ideology and the bettering ideas that such an ideology encouraged, and certainly not on ethics supporting the ideology. Piketty, like many American High Liberals, European Marxians, and traditional conservatives, is irritated precisely by the ethical pretensions of modern CEOs. The bosses, he writes, justify their economic gains by placing “primary emphasis on their personal merit and moral qualities, which they described [in surveys] using terms such as rigor, patience, work, effort, and so on (but also tolerance, kindness, etc.).”⁴⁰ As the economist Donald Boudreaux puts it, “Piketty prefers what he takes to be the more honest justifications for super-wealth offered by the elites of the novels of [the conservatives] Austen and Balzac, namely, that such wealth is required to live a comfortable lifestyle, period. No self-praise and psychologically comforting rationalizations by those early nineteenth-century squires and their ladies!”⁴¹ Piketty therefore is gratified to note, from a conservative-progressive height, that “the heroes and heroines in the novels of Austen and Balzac would never have seen the need to compare their personal qualities to those of their servants.” To which Boudreaux replies, “Yes, well, bourgeois virtues were not in the early nineteenth century as widely celebrated and admired as they later came to be celebrated and admired. We should be pleased that today’s [very] high-salaried workers brag about their bourgeois habits and virtues, and that workers—finally!—understand that having such virtues and acting on them is dignified.”

The theory of great wealth espoused by the peasantry and proletariat and their soi-disant champions among the leftish clerisy is non-desert by luck or theft. Likewise, the theory of great wealth espoused by the aristocracy and their own soi-disant champions among the rightish clerisy is desert by inheritance, itself justified by ancient luck or theft, an inheritance we bloodline aristoi should receive without psychologically comforting rationalizations. On the contrary, the theory of great wealth espoused by the bourgeoisie and its friends, the liberal economists such as Smith and Mill and Friedman and Boudreaux, is desert by a skill in supplying ethically, without force or fraud, what people are willing to buy.

The bourgeois virtues are doubtless exaggerated, especially by the bourgeoisie and sometimes even by its friends. But for the rest of us the results of virtue-bragging have not been so bad. Think again of the later plays of Ibsen, the pioneering dramatist of the bourgeois life. The bank manager, Helmer, in A Doll House (1879) describes his clerk caught in forgery as “morally lost,” having a “moral breakdown.”⁴² Helmer’s locutions throughout the play are saturated with the ethical rhetoric we have come to call “Victorian.” It is also “bourgeois.” Helmer’s wife Nora, whose rhetoric is saturated with the same ethics but is not so businesslike, commits the very same crime. Yet she commits it in order to save her husband’s life, not as the clerk does for what she views as amoral profit. By the end of the play Nora leaves Helmer, a shocking move among the Norwegian bourgeoisie of 1879, because she realizes that he instinctively would not have exercised the loving ethics of protecting her from the consequences of a forgery committed for love, not profit. No satisfaction in the doll house, in the end. An ethical bourgeoisie—which is what *most of Ibsen’s plays after 1876 examine, as later did the plays of Arthur Miller and the novels of Philip Roth—has complicated duties. But anyway the bourgeoisie talks about virtue all day long, admires it, and sometimes achieves it.

The original and sustaining causes of the modern world, in other words, were ethical, not material. They were the widening adoption of two mere ideas, the new and liberal economic idea of liberty for ordinary people and the new and democratic social idea of dignity for them. The two linked and preposterous ethical ideas—the single word for them is “equality,” of respect and before the law, their theory being liberalism—led to a paroxysm of betterment.

Such equality, understand, is not to be taken in the style which some in the French Enlightenment *employed, as equality of material outcome. The French definition is what the left and the right unreflectively *employ nowadays in their disputes: “You didn’t build that without social help, so there’s no justification for unequal incomes.” “You poor folk aren’t virtuous enough, so there’s no justification for your claim of equalizing subsidies.” But the more fundamental definition of equality—praised especially in eighteenth-century Scotland after the place awoke from its dogmatic slumbers—is the egalitarian opinion people have of each other, whether street porter or moral philosopher.⁴³ Adam Smith, a pioneering egalitarian in this sense, described the Scottish idea as “allowing every man to pursue his own interest his own way, upon the liberal plan of equality, liberty and justice.”⁴⁴

It would be a good thing, bien sûr, if a society following the Scottish and liberal plan produced a French and Pikettyan equality of material outcome. And in fact—old news, this, though surprising to some—it largely has. By the only relevant ethical standard, most people in liberal countries have basic human rights and basic comforts in antibiotics and housing and running water, compliments of the astonishing betterment coming from liberty and dignity for ordinary people. Forcing now by state violence an equality of outcome, in an illiberal, “French” style—cutting down the tall poppies, envying the silly baubles of the rich, imagining that sharing income is as efficacious for helping the poor as sharing a pizza is for a nice party among friends, treating poor people as sad children to be nudged or compelled by the mandarins of the clerisy—often has had, we have found, a high cost in damaging liberty and dignity and slowing betterment. Not always, but often.

Anthony Waterman, the historian of economic thought, notes that as soon as the advocates for French-style equality stray from their sailing plan that inequality is simply evil, they founder on a consequentialist rock (on which John Rawls had in 1971 placed a lighthouse): “From the standpoint of economic efficiency, is inequality [by a French definition] always a bad thing? May it not sometimes confer social benefits against which the evils they report must be set as an offset? [Thus Rawls.] If so we should have what rejoices the heart of every [Samuelsonian] economist: an optimization problem.”⁴⁵ Waterman points out that competition for “positional goods,” such as a top standing at Harvard, a competition necessarily inegalitarian in its result, can, as Smith and other eighteenth-century liberals claimed, benefit the whole society. To quote Smith, it “rouses and keeps in continual motion the industry of mankind.”⁴⁶ In historical fact the introduction of the Scottish plan of equality of liberty and dignity, beginning with the economic liberty of the bourgeoisie, has regularly led, as in the histories of Hong Kong and Sweden and France itself, to an astounding betterment and to an equality of genuine comfort. The poor have acquired automobiles and hot and cold water at the tap and color TVs denied in earlier times even to the rich, and have acquired political rights and social dignities denied in earlier times to all but a small portion of the rich.

The ideas of equality led to other social and political movements not uniformly adorable. Hannah Arendt remarked in 1951 that “equality of condition . . . [is] among the greatest and most uncertain ventures of modern mankind.”⁴⁷ Alexis de Tocqueville had said much the same a century earlier. And Scottish equality has a harsh, even tragic, side. It entails equal reward for equal merit in a marketplace in which others, by freedom of contract, can also compete. As John Stuart Mill put it in On Liberty, “Society admits no right, either legal or moral, in the disappointed competitors to immunity from this kind of suffering; and feels called on to interfere only when means of success have been employed which it is contrary to the general interest to permit—namely, fraud or treachery, and force.”⁴⁸ Yet in the real world, unhappily, if the poor are to be raised up there is no magic alternative to such competition. An ill-advised and undercapitalized pet store, into which the owner pours his soul, goes under. In the same neighborhood a little independent office for immediate health care opens half a block from a branch of the largest hospital chain in Chicago, and seems doomed to fail the test of voluntary trade. Although the testing of business ideas in voluntary trade is obviously necessary for betterment in the economy (as it is too*, by nonmonetary tests*, for betterment in art and sport and science and scholarship), such failures are deeply sad if you have the slightest sympathy for human projects, or for humans. But at least the pet store, the clinic, the Edsel, Woolworth’s, Polaroid, and Pan American Airlines face the same democratic test by trade: Do customers keep coming forward voluntarily? Does real income rise?

We could all by state compulsion backed by the monopoly of violence remain in the same jobs as our ancestors, perpetually “protected,” though at $3 a day. Or, with taxes taken by additional state compulsion, we could subsidize new activities without regard to a test by voluntary trade, “creating jobs” as the anti-economic rhetoric has it. Aside even from their immediate effect of making national income lower than it could have been, perpetually, such ever-popular plans—never mind the objectionable character of the violent compulsion they require—seldom work in the long run for the welfare of the poor, or the rest of us. In view of the way a government of imperfect people actually behaves in practice, job “protection” and job “creation” often fail to achieve their gentle, generous purposes. The protections and the creations get diverted to favorites. Laws requiring minority *or female businesses to be hired for supplying the state, for example, tend to yield phony businesses run in fact by male whites. In a society run by white males or inherited lords or clan members or Communist Party officials, or even by voters not restricted by inconvenient voting times and picture IDs, the unequal and involuntary rewards generated by sidestepping the test of trade are seized by the privileged. The privileged are good at that.

The double ideas of liberty and dignity, summarized as Scottish equality, *which was political liberalism in a mid-nineteenth-century definition, mattered as causes of the Great Enrichment more than any fresh material incentives, real or fancied. The new ideas mattered more than wars or trade or empire or financial markets or accumulation or high wages or high science. The Bourgeois Revaluation led to a Bourgeois Deal: “Let me creatively destroy the old and bad ways of doing things, the scythes, ox carts, oil lamps, propeller planes, film cameras, and factories lacking high-tech robots, and I will make you-all rich.”

The Bourgeois Deal became, unevenly, the ruling ideology. The Deal crowded out earlier ideologies, such as ancient royalty or medieval aristocracy or early modern mercantilism or modern populism. The bettering society of liberalism, when true to itself, was not ruled by the great king or the barons or the bureaucrats or the mob, all of whom took their profits from zero-sum. It was ruled by the betterers, coming in bulk from low-status parts of the society—barbers, laborers, carpenters, linen weavers—and taking their profits from a big positive sum produced by water-powered sawmills and hand-puddled wrought iron. A creatively bettering bourgeoisie as producers and as consumers then invented the steamship and the widespread secondary school, the telephone and the Internet, and enriched us all.

§

This final volume, then, Bourgeois Equality, asks why such ideas about bourgeois betterment shifted so dramatically in northwestern Europe, and for a while only there. After all, “betterment” and “improvement” and especially “innovation” were long seen in Europe as violations of God’s will or as unsettling heresies (the medieval sin was curiositas, which nowadays we honor extravagantly), such as Galileo peering at the moons of Jupiter and arguing therefore by analogy, in readable Italian rather than learned Latin, that the earth circles the sun. Surprisingly, in northwestern Europe and later elsewhere, betterment tested by success in domestic and foreign trade—and, as I’ve said, in scientific, artistic, sporting, journalistic, and political “markets” as well—came to be seen as splendid heroism, such as Henry Ford’s assembly line or Steve Jobs’s iPad. Why did Leonardo da Vinci in 1519 conceal many of his (not entirely original) engineering dreams in secret writing, whereas James Watt, of steam-engine fame (famous too for his fiercely defended anti-betterment patents), would in 1825, six years after his death, be honored with a planned statue in Westminster Abbey?⁴⁹ Why did bourgeois Shakespeare in 1610 sneer loftily at the bourgeoisie, yet gentrified Jane Austen in 1810 smiled amiably at it?

The answer to why England or why Europe, I argue here, does not lie in some thousand-year-old superiority, such as English common law, or in the deep genetic ancestry of Europeans. It lies rather in the surprising, 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 Four Rs,” if you please.⁵⁰ 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 inconsequential nation in a pile late in the seventeenth century. None of the Four Rs had deep English or European causes. All could have rolled the other way. They were bizarre and unpredictable. 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 in the vigorous Ottoman Empire. Not in backward, quarrelsome Europe.

The Renaissance, by the way, much to be admired for other reasons, was not one of the democratically and economically relevant Rs. It yielded innovations, all right. But the test it applied for valuing them was aristocratic, not bourgeois. Grand though its innovations were— human dissection, perspective drawing, Palladian architecture, and the printing of edited Greek classics, among my favorites—they were not democratic betterments and did not improve the lives of ordinary people, at any rate not for a long time.⁵¹ They had little to do with the remarkable Industrial Revolution or its astonishing follow-on, the Great Enrichment.

A result of the Four Rs of Reading, Reformation, Revolt, and Revolution was a fifth R, a crucial Revaluation of the bourgeoisie, first in Holland and then in Britain. The Revaluation was part of an R-caused, egalitarian reappraisal of ordinary people. (Such egalitarianism was not, you see, the central teaching of an Italian Renaissance that elevated the ideal, such as da Vinci’s Vitruvian Man, and disdained the average, such as Garrison Keillor’s Norwegian Bachelor Farmer.) I retail here the evidence that hierarchy—as, for instance, in St. Paul’s and Martin Luther’s conviction that the political authorities that exist have been instituted by God—began slowly and partially to break down.

The cause of the bourgeois betterments, that is, was an economic liberation and a sociological dignifying of, say, a barber and wig-maker of Bolton, son of a tailor, messing about with spinning machines, who died in 1792 as Sir Richard Arkwright, possessed of one of the largest bourgeois fortunes in England. The Industrial Revolution and especially the Great Enrichment came from liberating commoners from compelled service to a hereditary elite, such as the noble lord, or compelled obedience to a state functionary, such as the economic planner. And it came from according honor to the formerly despised of Bolton—or of Ōsaka, or of Lake Wobegon—commoners exercising their liberty to relocate a factory or invent airbrakes.

Over the past few centuries the legal liberation and social honoring, together, did the trick, as figure 1 illustrates, 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.

1. Dougherty, Who's Afraid of Adam Smith?, 2002, p. xi.

2. Since the seventeenth century the word rhetoric has often been misunderstood as lies or bloviation. I use it in its ancient sense, “the means of [unforced] persuasion,” which includes logic and metaphor, fact and story. Modern pragmatics, criticism, and social psychology have largely been a reinvention of ancient rhetoric, how words matter. If any of that strikes you as crazy or indefensible, you may wish to consult McCloskey 1985a (1998), 1990, 1994c.

3. Mueller 1999.

4. I will use the word liberal throughout not in its confused and twentieth-century American sense (“left-wing”) but in its older and still European sense of “devoted to liberty, especially political and economic liberty.” It is part of my argument that the American sense can be corrosive of true liberalism. (But so can neoconservatism.)

5. McCloskey 1990.

6. Mokyr 2010, p. 1.

7. I owe the phrase to Alberto Mingardi of the Istituto Bruno Leone.

8. Inoue 1991, 2001. For additional reflections on Inoue’s work, see McCloskey 2006b, pp. 296–297.

9. Mokyr Forthcoming (2016). Mokyr’s name, which will come up frequently, is pronounced “moh-KEER.”

10. “Having a go” is a British idiom, used in this application in the 1970s by the economic historian Peter Mathias (1972 [1979], p. 66). I remember Peter using the expression at a dinner discussion I attended at Oxford then, and I remember with embarrassment my callow scorn at its lack of (irrelevant) mathematics. Now I agree with him.

11. Conze and Kocka, eds. 1985.

12. Flaubert (May 10, 1867), in Oeuvres complètes et Annexes. Correspondance, p. 5883.

13. Huizinga 1935 (1968), p. 112.

14. Leoni 1965 (2009), p. 83.

15. “Samuelsonian” is historically more accurate than the more usual word, “neoclassical,” which includes for example Austrian and Marshallian economists who do not think much of modeling exclusively with constrained maximization and are more concerned with entry and evolution. It is a term of affection, not of dismissal. During the 1960s I myself was trained at Harvard in Samuelsonian economics, and during the 1970s I taught at the University of Chicago, which was at the time turning away from Marshall and Knight and toward Samuelson and Arrow. Samuelsonian economics was invented in the 1940s and 1950s by the brilliant and amiable Paul Anthony Samuelson (1915–2009)—long my mother’s mixed-doubles tennis partner—together with his equally brilliant and equally amiable brother in law, Kenneth Arrow (1921– )—long a distantly friendly colleague of mine. Startlingly, they are joint uncles of the crown prince of Samuelsonian economics, Lawrence Summers.

16. Haidt 2006; Epley 2014.

17. For example, Wilson 2010, which is the only substantive use in economics of Wittgenstein’s Philosophical Investigations. Wilson coined the word “humanomics.”

18. Herb Gintis, listen up.

19. Ibsen 1877 (1965), p. 112.

20. I am using the word “Marxian” for “influenced by Marx,” as against “Marxist,” that is, following the Master in more orthodox and often violent fashion. A Marxian such as Donna Haraway, for example, might argue in her books that social class is a crucial element in history. A Marxist such as Antonio Negri might assist in the kidnapping and murder of businesspeople.

21. Edwards (2013, 2014) makes a brave attempt, though one can criticize his methods. More grounded is Deng 2013.

22. Berndt and Berndt 1964, pp. 302–305. On forming property rights in beaver, see Demsetz 1967. But see Carlos and Lewis 1999, pp. 709, 726. Colin Turnbull’s The Mountain People (1972) is the classic, if vigorously disputed, picture of a war of all against all, among the Ik of Uganda.

23. In speaking of “alertness” I refer to Israel Kirzner’s Austrian economics of the entrepreneur, as in Kirzner 1979, 1989.

24. A discussion of the matter by Donald Boudreaux, John Nye, Joel Mokyr, and me, in which I concede some ground to the neo-institutionalists, is Hart and Richman, eds. 2014. See also McCloskey 2014.

25. Kurzban, DeScioli, and O’Brien 2007.

26. Jacob D. Rendtorff of Roskilde University of Copenhagen pointed out to me the friend-to-friend “corruption” in Scandinavia. But its order of magnitude is not the same as it is in more normal parts of the world.

27. The point comes from Bart Wilson.

28. Ostrom 1990, 2010; Ostrom, Walker, and Gardner 1994.

29. Once again, McCloskey 2011a. On children’s games, see Piaget 1932 (1965), pp. 13, 25; Tomasello 2014.

30. White 1984, citing Thucydides, bk. 3, 3.82–[4].

31. North 1990; Acemoglu and Robinson 2012.

32. Allen 2009. Against his logic and evidence, see Humphries 2011; Hudson 2010; Kelly, Ó Gradá, and Mokyr 2013; McCloskey 2010a, pp. 188–189.

33. Smith 2007. The Chinese economist Ning Wang has observed to me that constructivist economics fails because it relies on theorems subject to a fundamental arbitrariness, which I have called the A-Prime-C-Prime Theorem (McCloskey 1994). Evolution, such as that experienced in China after 1978, on the other hand, explores without prejudice and judges by results.

34. Kelly, Ó Gráda, and Mokyr 2013, p. 1.

35. Meisenzahl and Mokyr 2012, p. 447.

36. Bowden, Karpovich, and Usher 1937, p. 311. It was Usher who wrote the technological history in the book.

37. Jacob 2014, p. 148.

38. Sobel 1995.

39. Van der Beek 2013, p. 1.

40. Piketty 2014, p. 418.

41. Boudreaux 2014, personal correspondence.

42. Ibsen 1879 (1965), pp. 132.

43. Peart and Levy 2005, Levy 2001, Peart and Levy, eds. 2008. Kim Priemel of Humboldt University of Berlin suggests to me that “equity” would be a better word for the Scottish concept. But I do not want to surrender so easily an essentially contested concept such as French égalité, which indeed in its original bourgeois-revolutionary meaning was more Scottish than what I am here calling “French.”

44. Smith 1776, 4.9, p. 664. Following, for example, the editors of the Oxford Shakespeare, when quoting earlier English, even so recent as Smith (by which time English spelling had pretty much settled down), I regularly modernize the spelling and punctuation. The past is a foreign country, but the foreignness should be exhibited in its strange behavior and strange ideas, not in its conventions of printing.

45. Waterman 2014b, pt. 1.

46. Waterman 2014b, pt. 2; Smith 1759 (1790), IV.I.10. Waterman also notes the dissipation of such rents causing waste. It is a balance.

47. Arendt 1951 (1985), p. 54. It is unclear in the passage whether Arendt means “equality in the opinion of others,” as I do, or “equality of material outcome,” as conventional socialists do. Probably the latter.

48. Mill 1859 (2001), pp. 86–87.

49. MacLeod 1998, 2007. The statue ended up in St. Paul’s.

50. Kelly and Ó Gráda (2014) seem to have put paid to one of the older claims about the sources of the turmoil, China to Europe: the Little Ice Age. “Black swan” refers to Nassim Nicholas Taleb’s notion of a highly improbable, and unpredictable, event (Taleb 2007).

51. On perspective, see the astonishing book by Lepenies 2013.