Last time I wrote about what I was reading, I said I would next read a new book entitled Anti-Capitalism by Simon Tormey.  I changed my mind and have waded into the second of a projected four volume work (maybe six) by Deidre McCloskey.  The first was Bourgeois Virtues and was the beginning of a detailed historical and moral-ethical defense of markets.  This volume is entitled Bourgeois Dignity: Why Economics Can’t Explain the Modern World.  Most of this volume is taken up with showing how economic historians, general historians, economists (fro Left to Right), sociologists and anthropologists have failed to explain what she calls the “Great Fact,” the name she gives to the Industrial Revolution and its subsequent wealth-producing, welfare-increasing effects that have produced a roughly 1,500% increase in per capita income-wealth (national product or national income) since about 1800 (that is correct, a 15 fold increase).  This figure should frighten anti-capitalists, especially since nearly everyone–not just the 1%–has been so affected.  Exceptions are only places like North Korea and one or two really badly-governed nations in Africa.  

But what “caused” this explosion in well-being?  McCloskey runs through every single one of the proposed causal factors, and while not denying the usefulness and goodness of some, she concludes that they are all mistaken, for various reasons.  For the author, the true cause was a “Revaluation,” as she puts it, leading to innovation (roughly equivalent to entrepreneurship).  Revaluation she tells us is a major change in the way people thought and spoke about the bourgeois, the “merchant class,” the businessman, and business itself.  The shift was from either irrelevant or immoral to positively good or at least tolerable.  The bourgeois were given dignity and liberty, both needed for innovation to take off and to continue–which it has for the most part.  It started she says during the beginning of the Enlightenment, which makes sense to me.  

What was not the cause included: economic growth, efficiency, accumulation of wealth, rise of greed, accumulation of capital, geography, natural resources, transport, foreign trade, coal, exploitation, imperialism, “eugenic materialism,” Neo-Darwinism, inheritance, science, and institutions (against Douglass North, but not rejecting the importance).  The arguments are impressive.  McCloskey is obviously one of the few scholars who is at home in rigorous historical research and sound economic theory (she admits to being from the Chicago School and gives the Austrian School a great deal of credit).

Once again, the reader has to navigate about 500 pages of fairly dense argument and even a bit of math (for the economists she writes).  And as before, I cannot go with the author on everything.  But it is worth it.  So what, some would say.  Again, as I said before, we desperately need works that tackle the ethical side of markets and can sustain a defense of capitalism without ignoring problems.  Here is another excellent work doing just that.  And, as I also said before, Christians need to pick up the gauntlet and begin to produce this kind of research from an explicitly Christian viewpoint.  

And for the record, I do intend to get the Anti-Capitalism soon.