May 22, 2016

Review Corner

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.
Ideas and style are highly regarded at Review Corner. Reading Deirdre N. McCloskey's Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World forced me to note that I undervalue scholarship. Professor McCloskey has finished her "Bourgeois" trilogy. (The second book alone scored two [Review] [Corners].)

She had originally planned for more books.

Over twenty years of imagining and ten years of writing, the projected scale of the series has varied from one to six volumes. In a bad moment I thought of calling a six-volume version a "sexology," achieving thereby large sales through fraud and a tasteless mix of Latin and Greek. The thought did not meet the test of bourgeois virtue. I settle here for a trilogy, and modest sales, and say at its end, laus Deo.

To squish it all in, the third book is "robust" to choose an adjective beloved of software developers and coffee drinkers. It is neither univiting nor turgid; McCloskey exhibits great wit and clear prose. But I am a goal-oriented reader. I'll fly by most footnotes with a perfunctory "I'll take your word for it." McCloskey, like Popper, puts important information (and great verve) into them. Beyond the length, you have to stop and read every footnote. I even highlighted a few.
20. David Landes 1969, 1965. This is a good place to acknowledge that I spent the first half of my historical career disagreeing with David on the role of the entrepreneur. I seem to be doomed to spend the second half agreeing with him. En partie seulement.

I have been sharing some of my favorite quotes with the Kindle Twitter feature and hope that some ThreeSourcers may have enjoyed one or two. There is no way to cover this book in a Review Corner. I'll share some personal and philisophical thoughts, and direct people to several better resources for encapsulation:

McCloskey looks to language, literature, art, anthropology, psychology, and economics to trace the change in attitudes toward the bourgeoisie and the idea of birthright equality. In Shakespeare's time and reflected in his work, the words "honor" and "honest" referred to a person of high birth, not his or her character.
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. 17

ThreeSourcers know too well my appreciation for McCloskey, and it is only enhanced by this book. One can enjoy it as a cudgel (the 750-page hardcopy better than the Kindle version) for bashing the Left and the Luddite Right: Thomas Piketty is singled out for disapprobation several times. Go Deirdre! But - as mentioned in previous reviews she has opprobrium left over for some of my favorites. Several writers who have been given Five Stars on these pages have their theories questioned.

Niall Ferguson scored 4.75 stars and a direct comparison to McCloskey in a previous [Review Corner]. His "Killer Apps" and attention to institutions are immensely compelling. "Balderdash!" claims McCloskey (well, she doesn't use the B-word...) history is replete with societies with superb institutions, no Industrial Revolution, no Great Enrichment, no 9900% increase in consumption.

She has some kind words for Matt Ridley, but at the end of the day, his "ideas having sex" which won him five stars and the coveted Editor's Choice award in [Review Corner] she finds lacking. Great idea, Lord R, but why not in Song China or Timbuktu? You want property rights, it was said that a young girl could walk the breadth of Genghis Khan's kingdom with a handful of gold and not fear for her safety. Where is the Mongol Enlightenment?

Science? Private Property? Freedom?

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. 25 And it argues against the logically dubious assertion from the political left that the betterment comes automatically from artificially high wages. 26 Both are what the economists Friedrich Hayek and Vernon Smith, among others practicing a humanomics, call "constructivist," as against "ecological." 27

She calls herself a libertarian in the interviews linked above, and her ideas are friendly to liberty in many ways. But she has some inconvenient truths. She doesn't see much difference between the US, UK, Norway and Sweden. On her scale there isn't much difference, and the per-capita consumption is close. She recognizes the danger to prosperity in a USSR or Venezuelan attack on liberty, but like Adam Smith, she accepts a differential from "perfect liberty."
New Zealand, for example, is well governed. Italy is not. New Zealand has honest and efficient governmental institutions. Italy, strikingly, does not. In ease of doing business-- which is low when the government vigorously obstructs private dealings or when its officials demand bribes-- New Zealand ranked in 2010 and 2012 (among 183 or 185 countries) third from the top. Italy in 2010 ranked eightieth, slightly below Vietnam, and in 2012 seventy-third, slightly below the Kyrgyz Republic. In 2012, according to the Corruption Perceptions Index of Transparency International, New Zealand was tied for first, the most honestly governed among 173 ranked countries. Italy was seventy-second. 8
Yet in real GDP per person New Zealand and Italy, in 2010, were nearly identical, at $ 88.20 and $ 86.80 a day, a little above Hans Rosling's Washing Line. One could argue that there is anyway an international correlation between income and governance. But the causation is in part the other way around-- rich people demand better governance, which is certainly the story of more honest governance in American cities, 1900 to the present.

Some of your favorite theories will be besmirched in this great book. The data and scholarship which support her premises are so significant, it is difficult to push back.

One thing I do appreciate is her belief in modernity and her fulsome opposition to any who would push us back. That, great scholarship, literary allusions to TS Eliot, Ghostbusters, and Monty Python. I'm in! There is much to appreciate in post-1800 development:

the fine quality of the inexpensive book you now hold, the ease of access to the Kindle edition if you were too cheap to buy the book, the contact lenses that allow you to read it, the computer on which you take admiring notes about it, the college sheepskin on the wall, the acquiring of which allows you to grasp the book's profundity, and even the better aluminum studs behind the wall, preventing the better wallboard painted with better paint and affixed with better cordless screwdrivers from caving in when you punch it out of sadly misled vexation at some of the more irritating factual claims in the book.

Five Stars and an Editor's Choice Award.

Review Corner Posted by John Kranz at May 22, 2016 11:44 AM

...aluminum studs?

Kidding! That isn't the most important thing I take from this review. The power of ideas, is. They come in good and bad, of course, but the ultimate good idea according to McCloskey seems to be - rather than private property ownership - private self ownership. Free individuals, free to choose as it were, in a free world. That's a great idea.

And yet it is famously understood, that "Freedom is never more than a generation away from extinction." I take comfort in the greater population and faster communication of our time relative to the dark ages, that such extinction might be local and temporary. But fear of tyranny does still exist, even in the good ol' US of A.

To me, that is the real measure of "progress" - not the amount of wealth or the percentage of people enjoying it worldwide, but the amount of confidence in personal liberty and the percentage of people enjoying that worldwide.

Posted by: johngalt at May 23, 2016 3:48 PM

On Ideas good and bad: missing from my review is her preference for the term "trade tested betterment" to capitalism. You try to serve your fellow man with an idea or service -- and if that service is found to be of value you prosper, if not you try something else. The opportunity for failure eliminates the sclerosis in communism and answers "why wasn't there a Great Enrichment sooner?" People were smart in 1500 or 5000 BCE but only the chief's or emperor's ideas were good.

She enumerates the threats from the right and left and concedes the power of "the clerisy" to muck things up. On the plus side, she points out that every success creates its own interest group. All the people that make money driving Uber are incentivized to fight the taxi cartels' regulatory attempts.

So she's in optimist, a'la Matt Ridley. She mentions in one of the linked interviews "Of course I'm an optimist. You have to be an optimist to change genders."

Also missing is an idea it came up in a slightly different form on Econtalk today: the benfits of Capit -- I mean "trade tested betterment" have a long latency. We had DIckensian factories and the Triangle Shirtwaist fire before we saw most of the gains. That gave the Dickenses, Shaws, and Roosevelts a great foundation to oppose it.

Posted by: jk at May 23, 2016 4:16 PM | What do you think? [2]