|Author(s):||McCloskey, Deirdre N.|
Published by EH.Net (April 2022).
Deirdre N. McCloskey and Art Carden. Leave Me Alone and I’ll Make You Rich: How the Bourgeois Deal Enriched the World. Chicago: University of Chicago Press, 2020. 232 pp. $25.00 (hardback), ISBN: 9780226739663.
Reviewed for EH.Net by Joel Mokyr, Northwestern University.
For half a century Deirdre McCloskey has been a member of the starting lineup of economic history. The author of numerous books and hundreds of research papers and essays, her magnum opus is the monumental “Bourgeois Trilogy” that appeared between 2006 and 2016 and laid out her view of economic history and much else in about 2,000 pages. The slim volume here, co-authored with Art Carden, summarizes her views of what she has termed the “Great Enrichment” and makes it accessible to a wider public. In every way, this comparatively slim volume is vintage McCloskey: written in a rather informal conversational style, she states her views in her inimitable crystal-clear prose. She is relentless in her dismissal of other scholars she disagrees with and concepts she finds misleading, often with devastating bon mots. Thus the concept of capitalism is “a scientific mistake compressed in a single word” and the mistaken historians who elevated new-world slavery to a first-order cause of the Great Enrichment are told that “slavery was bad enough without ornamenting it with bad history and bad economics.” Indeed.
The book makes a powerful case for a classical liberal society: what accounts for economic success and growth is liberty. Other elements such as institutions, science, trade, resources and so on may have a mattered a bit, but the indispensable element that did it all was freedom from coercion, from regulation, and from oppression. That freedom was absent for most of human history, and it emerged only in Britain and the Low Countries in the seventeenth century. The Bourgeoisie, a group much maligned by the “left-wing clerisy,” are really the heroes of our prosperity and the “bourgeois deal” as they call it and as reflected in the well-chosen title of the book was the main driver that led to modern prosperity. The deal was simple: give us our freedom and we’ll make the economy grow. We’ll take the risks, but if we succeed, we’ll be rich and so will (almost) everyone else. The idea was so powerful and successful that it spread worldwide and has lifted up most economies on the planet. Hence, the majority of humanity is immensely richer than ever before and material life is better than ever before. That is the economic history of the modern world in a nutshell.
The explanandum, of course, is familiar to every undergraduate student of economic history. But the explanans may not be. The first sentence of the book’s preface is “The theme of our book is simple and true. But controversial.” Perhaps one might wonder, if this is all so self-evident, and the evidence so overwhelming, why is it still controversial? The message should be very attractive: freedom is obviously an attractive concept, something people are willing to die for. If an additional benefit is that it also makes us rich, what’s not to like? Why do not more people embrace the libertarian account that McCloskey and Carden tell here? Moreover, academics are also members of the bourgeoisie: why resist the idea that they are the heroes of the tale?
Much of the book — derived from Vol. 2 of the McCloskey Trilogy — consists of the demolition of alternative explanations of the Great Enrichment. These interpretations are viewed not so much as completely wrong as inadequate: too small, too late, too early. Only the Bourgeois Deal, concluded in the centuries before the Industrial Revolution, will do. The logic is powerful: people are entrepreneurial, they are ingenious, they are acquisitive. Give them a chance, let them loose, and they find opportunities to enrich themselves, and in the positive sum of economic development they will make everyone richer as well (even if not as rich as they are — but that does not bother the authors).
McCloskey and Carden clearly have no sympathy for the idea that what drove the Great Enrichment was something called state capacity, the ability of nations to create governments that helped create law and order, provide public goods, and solve coordination problems. Its importance has been stressed by both economic historians such as the late Larry Epstein and economists such as Tim Besley and Torsten Persson. It is striking that the regions that the authors point to as the birthplace of the Bourgeois Deal were actually areas in which economic regulation was tight and taxation was heavy. To be sure, after 1825 many of the most onerous coercive measures in Britain were abolished (the Corn Laws only in 1846), but the first century of the Industrial Revolution took place in a rather oppressive political environment where “liberty” may not have been the best characterization of the state of society. The apex of the British laissez faire economy took place after, not before the Industrial Revolution. In later cases, industrialization and growth occurred in economies such as Russia and Japan in the first half of the twentieth century, where individual liberty was not a priority.
This book makes a strong argument for ideational history. The idea of unfettered economic activity, as expressed so powerfully by Locke and his followers (above all, of course, Adam Smith), is the “engine” that drove the economies of the West into the Great Enrichment. Yet there is something odd in the argument as presented here: while the authors, like all liberal writers, are firmly committed to the wisdom and power of the market, and while this book presents a strong case for the historical importance of ideas, it does not dwell on the market for ideas. There is little here that explains how the idea of freedom and unfettered markets actually caught on. After all, as the book notes, there was powerful resistance from many corners, and the victory of liberalism was by no means assured. It was driven, they say, by successful revolutions (in sixteenth century Netherlands and seventeenth century England), the printing press, and the reformation. Had these not taken place, the Enrichment may not have occurred. Europe was not better, it was lucky. But ideas do not just catch on because of their future benefits: they have to be debated and sold in a market for ideas, in which its proponents persuade their audience based on the evidence, the logic, or the ethics of the idea. Yet surprisingly the market for ideas makes no entry in a book devoted to the praise of markets and the power of ideas. Indeed, it could be argued that in their account liberalism’s success was precisely due to what happened in the market for ideas. Intellectuals from Locke and Smith down persuaded the people that mattered of ideas that led to economic growth.
The emphasis on ideas leads to the other question that the book raises. The period they describe as crucial to the emergence of the main elements of the Great Enrichment corresponds with the Age of Enlightenment. Yet the Enlightenment, arguably one of the most powerful cultural movements in history, plays no role in their account despite its commitment to ideas. Writing the economic history of modern economic progress without the Enlightenment is the ultimate prince-less Hamlet. Historians have recently rescued it from the dismissive attitudes of a misguided revisionist historiography, as exemplified by Ritchie Robertson’s recent tour de force (though it ignores economic history). Which precisely were the enlightenment ideas that mattered? A belief in liberty, free markets, and small government surely was part of it, although a disturbing number of philosophes felt that growth was too important to be left to the private sector and needed help from a friendly government. What the French called dirigisme was basically an attempt to recruit the government to help entrepreneurs in their endeavors. Britain was exceptional in its laissez faire approach to economic development — and even there the government was not altogether absent.
Above all, what is missing in this book is any serious acknowledgment of the role of what people at the time called “useful knowledge” — an understanding of natural phenomena and regularities. In many places of the book, the author invoke ingenuity as the force for progress. But how is ingenuity to lead to sustained growth without knowledge? Ingenuity and technological progress do not drop down from heaven as soon as liberty is declared. Skills, technical savoir faire, and dexterity have to be produced and created in the system. Increasingly it was realized that such skills needed to be augmented by an understanding of the natural regularities of mechanics, energy, and materials. The Enlightenment realized that natural philosophy could be harnessed to material needs, from fighting smallpox to finding longitude at sea to pumping water out of coal mines. McCloskey and Carden will have none of it. Science, they say, was unimportant as the driver of growth, because so many advances were made without it.
This assessment hinges on a somewhat narrow definition of what we mean by useful knowledge. The basic idea was one of progress, and progress was to be achieved because knowledge — both propositional and prescriptive — was cumulative. Progress occurred because in a well-functioning market for ideas, better insights about nature would beat out inferior opponents. Lavoisier’s chemistry replaced phlogiston and caloric, and vaccination pushed out the antiquated resignation that smallpox was a divine punishment for our sins. None of those triumphs, and countless others, were accepted without fierce resistance, and their victory was never assured. But this is why the story cannot be told without placing the Industrial Enlightenment on center stage. What the Industrial Revolution needed was knowledge: science, when appropriate, augmenting and supporting the often tacit knowledge of workmanship and materials, but also many other things: practical arithmetic (as shown in a brilliant forthcoming article by Kelly and Ó Gráda), the use of better tools and equipment, an understanding — often instinctive — of mechanics, heat, and chemical processes.
In short, a society that was free but ignorant would not grow. Unlike what Carden and McCloskey imply, ingenuity was not an automatic and passive link between freedom and prosperity. The sense that a systematic cataloguing and understanding of natural phenomena and regularities was needed to achieve progress permeated the thinking of the people who brought it about — including those who had no science themselves. As scientific knowledge expanded, people latched on to it and drew from it to come up with new ideas that made life better. Uneducated tinkerers, by themselves, could not have turned the Industrial Revolution into sustained growth. Inventions can be made serendipitously, without the faintest understanding of why and how they work; but such advances soon bog down. What we need now, then, is a serious discussion of how the elements of the Enlightenment interacted, that is, how personal freedom and the right incentives helped create the surge of practical knowledge and ingenuity that actually created the means for the Great Enrichment.
Liberalism, as it emerged in the West and as described in this book, was part and parcel of the European Enlightenment — though (like everything else in the writings of the eighteenth-century philosophes) it was disputed and doubted. Yet the Enlightenment was much more than liberalism, and if all that it had created was a belief in personal freedom and less restrictive government, its effects on the Great Enrichment may have been more modest. What counted was a belief in progress — material as well as social and political. Not all the prescriptions toward the perfection of society worked equally well — and perhaps that may be why the Enlightenment became something of a whipping boy for some writers influenced by the lamentable “Frankfurt School.” But on the matter of economic growth, the eighteenth-century intellectuals basically got it right. Material progress, the philosophes felt, was driven above all by knowledge and its accumulation, its testing in the market for ideas, and its application by engineers, mechanics, and entrepreneurs. These were the real causes of the Great Enrichment. Everything else — trade, politics, literacy, imperialism, and a host of other factors enumerated and dismissed by McCloskey and Carden — depended on that.
What, then, should we think of the role of “freedom” in economic growth? The question will be debated for generations and McCloskey has done our profession a great service by setting the terms of the debate. A large number of scholars would argue that rather than “laissez faire” policies, enlightened and competent governments could support and drive economic growth. As the late Alice Amsden has shown in her The Rise of the Rest, such governments existed. Without sufficient state capacity to guide and support development, many of the conditions for a Great Enrichment may not be there. Could there be such a thing as “too much liberty” just as there clearly was a thing such as too much coercion? In a forthcoming book, The Rise and Fall of Laissez Faire, Walker Hanlon shows how over the course of the nineteenth century Britain slowly retreated from a rather extreme form of laissez faire and introduced elements of regulation, coercion, and the welfare state to correct for some of the most undesirable consequences of the Industrial Revolution. So did every industrialized nation, some more, some less. Even the individualist and freedom-loving United States was dragged into a (partial) retreat from extreme liberalism, not just because most people demanded it, but because it was the right thing to do.
Perhaps the authors should consider this: liberalism depends on markets, and markets can fail. Part of liberty should therefore consist of society’s right to choose a certain amount of coercion and regulation by the state, to avoid such unacceptable outcomes as child labor, toxic chemical pollution, millions of people without medical insurance, and the poisoning of considerable portions of the population by pharmaceutical firms selling addictive substances. Somewhere between a libertarian free-for-all economy, and the horridly coercive worlds of Stalin and Mao, there is a goldilocks-like middle ground, far from optimal perhaps, but more livable than the alternatives. It is that middle ground that the Enlightenment strove for. In an imperfect world, that is the best we can do.
Amsden, Alice H. The Rise of “The Rest”: Challenges to the West from Late-Industrializing Economies. Oxford University Press, 2001.
Besley, Timothy, and Torsten Persson. Pillars of Prosperity: The Political Economics of Development Clusters. Princeton University Press, 2013.
Epstein, S.R. Freedom and Growth: The Rise of States and Markets in Europe, 1300–1750. Routledge, 2000.
Hanlon, Walker W. The Rise and Fall of Laissez Faire. Princeton University Press, forthcoming.
Kelly, Morgan, and Cormac Ó Gráda. “Connecting the Scientific and Industrial Revolutions: The Role of Practical Mathematics.” Journal of Economic History, forthcoming.
Robertson, Ritchie. The Enlightenment: The Pursuit of Happiness, 1680–1790. New York: Harper Collins, 2021.
Joel Mokyr is the Robert H. Strotz Professor of Arts and Sciences and Professor of Economics and History at Northwestern University, and Sackler Professor, (by special appointment) at the Eitan Berglas School of Economics, Tel Aviv University. His most recent book is A Culture of Growth (Princeton University Press, 2017).
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|Subject(s):||Economic Development, Growth, and Aggregate Productivity|
Economywide Country Studies and Comparative History
Markets and Institutions
|Geographic Area(s):||General, International, or Comparative|
|Time Period(s):||General or Comparative|