A libertarian economist argues that a sense of dignity and rights for all, rather than technological innovation, is what really spurs growth — Read the complete FT review
There is little doubt that most humans today are better off than their forebears. Stunningly so, the economist and historian Deirdre McCloskey argues in the concluding volume of her trilogy celebrating the oft-derided virtues of the bourgeoisie. The poorest of humanity, McCloskey shows, will soon be joining the comparative rich of Japan and Sweden and Botswana.
Why? Most economists—from Adam Smith and Karl Marx to Thomas Piketty—attribute the Great Enrichment since 1800 to accumulated capital. McCloskey disagrees, fiercely. “Our riches,” she argues, “were made not by piling brick on brick, bank balance on bank balance, but by piling idea on idea.” Capital was necessary, but so was the presence of oxygen. It was ideas, not matter, that drove “trade-tested betterment.” Nor were institutions the drivers. The World Bank orthodoxy of “add institutions and stir” does not work, and never has. McCloskey builds a powerful case for the initiating role of ideas—ideas for electric motors and free elections, of course, but more deeply the bizarre liberal ideas of equal liberty and dignity for ordinary folk. Liberalism arose from theological and political revolutions in northwest Europe, yielding a unique respect for betterment and its practitioners, and upending ancient hierarchies. Commoners were encouraged to have a go, the bourgeoisie took up the Bourgeois Deal, and we were all enriched.