------ EH.NET BOOK REVIEW ------
Title: Bourgeois Dignity: Why Economics Can’t Explain the Modern World

Published by EH.Net (February 2011)

Deirdre N. McCloskey, /Bourgeois Dignity: Why Economics Can’t Explain the
Modern World/. Chicago: University of Chicago Press, 2010. xvi + 571 pp. $35
(hardcover), ISBN: 978-0-226-55665-9.

Reviewed for EH.Net by Jared Rubin, Department of Economics, California State
University, Fullerton.

/Bourgeois Dignity/, the second part of Deirdre McCloskey’s (University of
Illinois, Chicago) four-volume magnum opus, is a daring, innovative,
extremely well-researched, and important addition to “big think” economic
history. McCloskey provides a new answer to the question, “Why did Western
incomes grow from an average of $3 a day prior to the Industrial Revolution
to anywhere between 16 and 100 times that amount today while the rest of the
world (for the most part) lags behind?” McCloskey suggests, as in the first
volume (/Bourgeois Virtues/) that it was the changing of attitudes and
rhetoric towards the bourgeois, markets, and innovation -- first in
northwestern Europe and then in the rest of Europe -- that heralded the
changes in incentives and production necessary for the emergence of the
modern economy.

The book is broken into forty-six short chapters. The first thirteen chapters
set the stage for the argument -- noting that there has been indeed a
staggering jump in income in the West since the Industrial Revolution, this
growth has been transmitted to all classes, and it commenced in England and
the Netherlands. This opening salvo provides a nice overview of recent (and
not-so-recent) work done on this period and should not be too controversial
to most economic historians. It is the second section of the book, chapters
14 through 38, where McCloskey is at her best and at times most
controversial. Like the excellent and honest social scientist she is,
McCloskey presents in these chapters the various alternative theories that
have emerged to explain the rise in Western income by at least a factor of
sixteen. A short list of the explanations she takes on includes the
Protestant ethic (Weber), accumulation (Marx), geography (Diamond), eugenic
materialism (Clark), science (Mokyr) and institutions (North), among many,
many others. In each chapter, she takes on these alternatives and explains
why they cannot explain the “factor of sixteen.” Some of these
explanations are more convincing than others -- for example, her criticism of
Gregory Clark’s/ Farewell to Alms/ is particularly devastating. McCloskey
remains honest in criticisms of each of the alternatives, many of which are
quite brilliant. She never states that any of them cannot account for some
degree of economic growth, merely that they cannot account for the degree of
growth seen in the West since the Industrial Revolution.

McCloskey presents her own thesis in the final eight chapters. In
McCloskey’s words, “it was words.” It was the rhetoric concerning the
bourgeois and the ensuing dignity and liberty bestowed on them that elevated
the financiers, innovators, marketers, merchants, and others to a place where
a broader swath of society had incentive to aspire to become bourgeois. This
change in values was a necessary precondition for modern economic success --
where there is a rise in bourgeois dignity (including recently in China and
India) -- economic success follows. Indeed, McCloskey goes to great length to
show that these changes in values and dignity arose in northwestern Europe in
the period preceding the massive changes associated with the Industrial
Revolution. McCloskey’s argument is a cultural one at heart, but one with
substantially more nuance than most of the cultural, Eurocentric arguments
proposed over the last century.

I believe that this book is an important addition to the “big question”
literature and any criticism that focuses on the specifics of McCloskey’s
argument misses the big picture. That said, there are two aspects of
McCloskey’s argument that leave me wanting. The first (and less important)
problem is that McCloskey seems to be a bit quick in trivializing the
possible impact of the alternatives. Many of the chapters conclude with
something along the lines of “explanation x may account for a rise of
incomes of a factor of y, but not sixteen.” There are three reasons why
this is unsatisfying. First, the empirical evidence provided for these
assertions varies dramatically -- some cases are much less convincing than
others that a factor of sixteen cannot be accounted for. Second, McCloskey
does not consider (in depth) the possibility that a confluence of the many
influences presented as alternatives could account for the big leap --
perhaps a monocausal (or even duocausal) solution is not the one we should
seek. Finally, McCloskey does not provide empirical evidence that a change in
values, words, or dignity favoring the bourgeois can account for the factor
of sixteen. Though this is undoubtedly due to the difficulties of quantifying
culture, as McCloskey readily admits, it is difficult to uphold McCloskey’s
argument using the same methodology which is used to deconstruct
alternatives.

More importantly, McCloskey does not provide an account of where the change
in bourgeois dignity came from. This is a shortcoming that she does not deny,
and the reader is left to believe that she has an answer somewhere, but may
be holding her cards for a future volume. McCloskey does provide a model (p.
409) which suggests that the Renaissance, Reformation, European
fragmentation, free cities, printing, English liberties, and other events
could have led to a “bourgeois dignification.” In theory, these are
intriguing possibilities that provide a nice causal pathway leading from
historical events to bourgeois dignity to economic growth. The problem is
that McCloskey spends too few pages making the causal connections. This is a
problem since bourgeois dignity could have arisen from one of the
alternatives that McCloskey downplays earlier in the book. Indeed, this is
where the institutional crowd will likely leave unsatisfied -- why, they will
ask, are changes in institutions (such as those protecting property rights)
not the root cause of changes in perceptions of the bourgeois? Are cultural
attitudes not endogenous to broader economic, political, religious, and
social institutions and interactions? It is not clear -- in this tome at
least -- that McCloskey provides a full-throated answer to such questions.

This should by no means, however, denigrate the importance of /Bourgeois
Dignity/. The reader will undoubtedly leave this book thinking that words
matter and attitudes towards the bourgeois matter even more. This book
absolutely cannot be ignored by economic historians. For those predisposed to
disagree with McCloskey’s conclusions, the task is clear -- explain the
shortcomings of her argument. This is such a well-researched, thoughtful book
that this is an extremely tall task. For those economic historians (among
whom I would include myself) who believe that McCloskey is on to something
big, the task is more muddled -- explain where her arguments substitute and
complement others. This too is no small task. For these reasons, /Bourgeois
Dignity/ (and the entirety of the Bourgeois tetralogy) is bound to live a
very long life and play an important role in shaping “big think” works
for decades to come.

Jared Rubin is an assistant professor of economics at California State
University, Fullerton. His work focuses on the institutional roots of the
economics divergence between the Middle East and Western Europe. His recent
publications on this topic include “Institutions, the Rise of Commerce, and
the Persistence of Laws: Interest Restrictions in Islam and Christianity”
(/Economic Journal/, forthcoming) and “Bills of Exchange, Interest Bans,
and Impersonal Exchange in Islam and Christianity,” (/Explorations in
Economic History/, 2010).

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Geographic Location: General, International, or Comparative
Subject: Markets and Institutions
Time: 18th Century, 19th Century, 20th Century: Pre WWII, 20th Century: WWII
and post-WWII