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Saturday, July 29, 2006

McCloskey: "The Bourgeois Virtues"

This is the first chapter of The Bourgeois Virtues by Deirdre N. McCloskey offering a defense of capitalism as a virtuous economic system rather than a system that produces "alienated, rootless, angst-ridden, superficial, materialistic" members of society within an immoral and uncaring marketplace. Pure capitalism won't satisfy every definition of equity, and as practiced it isn't perfect. We should, of course, continue to try and improve it's performance and to address equity concerns. But I agree with the main theme of this chapter: Capitalism has made the vast majority of people much better off.

[Here is the NY Times review of the book which describes McCloskey as "a distinguished professor of economics, history, English and communication at the University of Illinois, Chicago, ...[and] a ... new-Christian, postmodern, minimal-government conservative. She is also, by her own avowal, "a tough urban girl who can take it as well as dish it out.""]:

First Chapter:The Bourgeois Virtues, By Deirdre N. McCloskey: If we had gained a better material world, two cars in the garage and Chicago-style, deep-dish, stuffed-spinach pizza on the table, but had thereby lost our souls, I personally would have no enthusiasm for the achievement. I urge you to adopt the same attitude. A good name is rather to be chosen than great riches. For what is a man profited, if he shall gain the whole world, and lose his own soul?

I do not want to rest the case for capitalism, as some of my fellow economists feel professionally obligated to do, on the material achievement alone. My apology attests to the bourgeois virtues. I want you to come to believe with me that they have been the causes and consequences of modern economic growth and of modern political freedom.

True, any well-wisher of humankind will count the relief of poverty over large parts of the world as desirable, at least if she could be sure that no excess corruption of souls was involved. No good person delights in the misery of others. Even many people skeptical of a Washington consensus of neoliberal capitalism agree that globalization has been desirable materially. It has, as one of the skeptics, Joseph Stiglitz, wrote in 2002, "helped hundreds of millions of people attain higher standards of living, beyond what they, or most economists, thought imaginable but a short while ago."

He means bringing the 1.3 billion people - 70 percent of them women - now living on a dollar a day to two dollars, and then to four, and then to eight, not merely the further enrichment of the West, which neither he nor I regard as especially important. "The capitalist achievement," wrote Joseph Schumpeter in 1942, "does not typically consist in providing more silk stockings for queens." That can be achieved merely by redirecting aristocratic plundering to silk factories. The achievement consists "in bringing [silk stockings] within the reach of factory girls in return for steadily diminishing amounts of effort."

To halt such a good thing, as some of the Seattle-style opponents think they wish, would be according to Stiglitz "a tragedy for all of us, and especially for the billions who might otherwise have benefited." The economist Charles Calomiris, who supports globalization on egalitarian grounds, as I do, argues that "if well-intentioned protestors could be convinced that reversing globalization would harm the world's poorest residents (as it surely would) some (perhaps many) of the protestors would change their minds." One would hope so.

But fattening up the people, or providing them with inexpensive silk stockings, I will try to persuade you, is not the only virtue of our bourgeois life. The triple revolutions of the past two centuries in politics, population, and prosperity are connected. They have had a cause and a consequence, I claim, in ethically better people. I said "better." Capitalism has not corrupted our souls. It has improved them. ...

On the political left it has been commonplace for the past century and a half to charge that modern, industrial people, whether fat or lean, are alienated, rootless, angst-ridden, superficial, materialistic; and that it is precisely participation in markets which has made them so. Gradually, I have noted, the right and the middle have come to accept the charge. Some sociologists, both progressive and conservative, embrace it, lamenting the decline of organic solidarity. By the early twenty-first century some on the right have schooled themselves to reply to the charge with a sneering cynicism, "Yeah, sure. Markets have no morals. So what? Greed is good. Bring on the pizza."

The truth I claim is closer to the opposite. In his recent book on the intellectual history of modern capitalism Jerry Muller notes that "the market was most frequently attacked by those who viewed its intrinsic purposelessness as leading to an intrinsic purposelessness..., and who sought radical alternatives on the left and right." That is indeed what the left and right believed, and still believe. They believe in the cultural critique of capitalism, a critique which once justified the Arts and Crafts movement and socialist realism on the left and the architecture and poetry of fascism on the right, and justifies now sneering at red states by blue.

I say that the cultural critique is mistaken. ... It is not obvious that consuming in Midtown Manhattan is less purposeful than consuming in an anticapitalist North Korea or in an antibourgeois hippie commune. ... The grim single-mindedness of getting and spending in a collectivist village is not obviously superior to the numberless levels, varieties, and capacities of Paris or Chicago. Vulgar devotion to consumption alone is more characteristic of pre- and anticapitalist than of late-capitalist societies.

I claim that actually existing capitalism, not the collectivisms of the left or of the right, has reached beyond mere consumption, producing the best art and the best people. People have purposes. A capitalist economy gives them scope to try them out. Go to an American Kennel Club show, or an antique show, or a square-dancing convention, or to a gathering of the many millions of American birdwatchers, and you'll find people of no social pretensions passionately engaged. Yes, some people watch more than four hours of TV a day. Yes, some people engage in corrupting purchases. But they are no worse than their ancestors, and on average better.

Their ancestors, like yours and mine, were wretchedly poor, engaged with getting a bare sufficiency. ... In 1807 Coleridge quoted an economist of the time, Patrick Colquhoun, asserting that "poverty is ... a most necessary ... ingredient in society, without which nations ... would not exist in a state of civilization.... Without poverty there would be no labor, and without labor no riches, no refinement." This was a standard argument against the relief of poverty, joining eight other ancient arguments against doing something about poverty...

Coleridge sharply disagreed with Colquhoun's pessimism. A man is poor, he wrote, "whose bare wants cannot be supplied without such unceasing bodily labor from the hour of waking to that of sleeping, as precludes all improvement of mind-and makes the intellectual faculties to the majority of mankind as useless as pictures to the blind." ...

In 1807 the debate was still unsettled. Is a class of exploited people necessary for high civilization, as Colquhoun, or Nietzsche, claimed? Or is the disappearance of such a class as a result of material progress exactly how we get a mass high civilization, as Coleridge, or Adam Smith, claimed?

The results are now in. Modern economic growth has led to more, not less, refinement, for hundreds of millions who would otherwise have been poor and ignorant-as were, for example, most of your ancestors and mine. Here are you and I, learnedly discussing the merits and demerits of capitalism. Which of your or my ancestors in 1800 would have had the leisure or education of a Colquhoun or a Coleridge to do that? As the economic historian Robert Fogel noted in 2004, "Today ordinary people have time to enjoy those amenities of life that only the rich could afford in abundance a century ago. These amenities broaden the mind, enrich the soul, and relieve the monotony of much earnwork [Fogel's term for paid employment].... Today people are increasingly concerned with the meaning of their lives." He points out that in 1880 the average American spent 80 percent of her income on food, housing, and clothing. Now she spends less than a third. That's a rise from a residual 20 percent of a very low income spendable on "improvements of mind" to about 70 percent of a much larger income. All right: a lot of it is spent on rap music rather than Mozart, alas; and on silly toys rather than economics courses, unfortunately. But also on book clubs and birdwatching. ...

As the economic historian Eric Jones put it, "There is a tendency to lament the loss of earlier values and practices, however inappropriate they may be for modern circumstances"-think of French village life in Lorraine in 1431 or headhunting Ilongot in the Philippines in 1968-"without allowing for the greater wealth of opportunities and novelties that is continually being created." Mario Vargas Llosa does not believe that globalization has impoverished the world culturally. On the contrary, Vargas Llosa writes,

globalization extends radically to all citizens of this planet the possibility to construct their individual cultural identities through voluntary action, according to their preferences and intimate motivations. Now, citizens are not always obligated, as in the past and in many places in the present, to respect an identity that traps them in a concentration camp from which there is no escape-the identity that is imposed on them through the language, nation, church, and customs of the place where they were born.

Participation in capitalist markets and bourgeois virtues has civilized the world. It has "civilized" the world in more than one of the word's root senses, that is, making it "citified," from the mere increase in a rich population. It has too, I claim, as many eighteenth-century European writers also claimed, made it courteous, that is, "civil." "The terrestrial paradise," said Voltaire, "is Paris."

Richer and more urban people, contrary to what the magazines of opinion sometimes suggest, are less materialistic, less violent, less superficial than poor and rural people. Because people in capitalist countries already possess the material, they are less attached to their possessions than people in poor countries. And because they have more to lose from a society of violence, they resist it.

You can choose to disbelieve if you wish some of the things said to go along with the capitalist revolution of the past two centuries, such as the emerging global village, the rise in literacy, the progress of science, the new rule of law, the fall of tyrannies, the growth of majority government, the opening of closed lives, the liberation of women and children, the spread of free institutions, the enrichment of world culture. But if only a few of these alleged consequences were justified, then capitalism itself would be justified. And not by bread alone.

The late Robert Nozick wrote that "what is desired is an organization of society optimal for people who are far less than ideal, optimal also for much better people, and which is such that living under such an organization itself tends to make people better and more ideal." Nozick and I say it's capitalism. We say that socialism works only for an impossibly ideal Socialist Man, or a Christian saint, and that socialism tends to make people worse, not better.

The ethical betterment is not achieved, I repeat, at the cost of the remaining poor people. That is a fact to be established. I do not expect you to agree with everything I am saying. If you do, you are not the antibourgeois, anticapitalist, or antiethical reader I am trying to persuade. I need to persuade you that capitalism and bourgeois virtues have been greater forces eliminating poverty than any labor union or welfare program or central plan. We have the eight-hour day mainly because we got rich, and therefore we won't tolerate eleven-hour days-unless we are yuppie attorneys in New York fresh from Yale Law School making well over $100,000 a year in exchange for a seventy-seven-hour work week. Some poor people now work long hours and can't make it. No one should deny that. But it was worse in 1900, and worse yet in 1800. Better working conditions have prevailed not because of union negotiations or governmental regulations, but because capitalism has worked.

I need to persuade you also that, contrary to Colquhoun, poverty is not a most necessary ingredient in society. I need to show you empirically, for example, and will try in volume 4, what most economists know: that if the allegedly exploitative trade of the first world with the third were halted tomorrow the first world would suffer a mere hiccup in its rate of growth. I need to show you empirically that if presently poor people in rich countries all became engineers and professors, the presently rich people would be better off, not worse off, though with fewer poor people to bus the tables and mind the children.

We will not have the heaven-on-earth of perfect equality, ever, and I lament this fact. But equality over the long term-despite an unhappy reversal in the trend in the United States in the 1980s-has been increased by capitalism, and in absolute terms the poor even in the 1980s and after got better and better off.

In asserting capitalism's innocence of causing poverty, understand, I am not simply disrespecting the poor, or elevating material abundance to trumps, or recommending a cold heart. I have emphasized that all our ancestors were poor, that everyone descends overwhelmingly from poor people, even from slaves, since almost all societies before the eighteenth century had lesser or smaller numbers of slaves and all such societies were by your standards and mine astoundingly poor. Try to imagine living on one dollar a day, with the prices of food and clothing and housing as they now are. Imagine, if you wish, an economy with very many such people, and so having commercial provision for mats to sleep hundreds abreast on the streets of Calcutta and for rice-by-the-bowl with pebbles and clay mixed in. It's still no picnic. Ninety-nine percent of our great-great-great-great grandparents lived on a dollar a day, and more than a billion people I said do still. . . .

    Posted by on Saturday, July 29, 2006 at 05:13 PM in Economics | Permalink  TrackBack (0)  Comments (3)


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