In Response to Deirdre McCloskey

deirdre_mccloskey_20120126144835I haven’t written for my blog recently as my time has been consumed by another more extensive writing project. I’ve also been working on a post regarding the notion of “software eating the world” but, as it’s not pressing, I’m taking my time with it.

However, I’ve recently read a short essay by economic historian Deirdre McCloskey titled How the West (and the Rest) Got Rich and I wasn’t impressed. Ms. McCloskey is an immensely eloquent writer, far more so than myself I’m willing to admit. That is why it is easy to overlook the substantive holes in her premise regarding what she calls “The Great Enlightenment.” She views the concepts underpinning what most people call Capitalism (she thinks the term is not accurate) as inherently virtuous. To say that I disagree would have to rise to the level of an understatement.

Ms. McCloskey is typically eloquent in the essay and makes a few interesting claims. Let’s start with this one:

What enriched the modern world wasn’t capital stolen from workers or capital virtuously saved, nor was it institutions for routinely accumulating it. Capital and the rule of law were necessary, of course, but so was a labor force and liquid water and the arrow of time.

The capital became productive because of ideas for betterment—ideas enacted by a country carpenter or a boy telegrapher or a teenage Seattle computer whiz. As Matt Ridley put it in his book “The Rational Optimist” (2010), what happened over the past two centuries is that “ideas started having sex.”

Let me start with the first paragraph: Ms. McCloskey waxes over the very conditions necessary for the so-called Great Enlightenment to have taken place. Without the rule of law and, even more importantly, force monopolization, the ability for anyone to “enrich” themselves is severely deterred due to natural Darwinian competition. Simply put, in a world without the rule of law and force monopolization, everyone would be forced to protect their own wealth against everyone else, likely ensuring that “growth” would be very slow if not non-existent. In my post, What is Capitalism, I lay out a comprehensive case explaining the essential relevance of rule of law and force monopolization in our current economic system which also applies historically.

The second paragraph is more substantial and, in my opinion, the salient point. It cannot be denied that technological progress has driven the human species to a far greater degree of wealth now from its initial beginning. However, the nature of human intelligence is still very much a mystery. The use of knowledge and energy to convert items of little utility into items of far greater utility, both for production and leisure, at the scale done by modern humans is unique and unprecedented. There are no suitable explanations for this condition but it is, hands down, the actual reason for why everyone is so much “richer” today.

Now here is where Ms. McCloskey decides to take a relatively innocuous premise and go off the rails with it:

Why did ideas so suddenly start having sex, there and then? Why did it all start at first in Holland about 1600 and then England about 1700 and then the North American colonies and England’s impoverished neighbor, Scotland, and then Belgium and northern France and the Rhineland?

The answer, in a word, is “liberty.” Liberated people, it turns out, are ingenious. Slaves, serfs, subordinated women, people frozen in a hierarchy of lords or bureaucrats are not. By certain accidents of European politics, having nothing to do with deep European virtue, more and more Europeans were liberated. From Luther’s reformation through the Dutch revolt against Spain after 1568 and England’s turmoil in the Civil War of the 1640s, down to the American and French revolutions, Europeans came to believe that common people should be liberated to have a go. You might call it: life, liberty and the pursuit of happiness.

This section is stunningly false. Let’s skip the inconvenient truths that the overwhelming majority of people who have ever existed have not lived as slaves, serfs, or subjects of oppressive aristocracies or bureaucracies. Let’s wax over the fact that there have been many, MANY non-white cultures in which the fundamental rights of women as equal or near equal members of society were rightfully acknowledged and accepted, such as many of the Native American cultures (these were also characterized by practically non-existent bureaucracies). Let’s ignore for a minute, that even many of those who lived under the rule of empires could go their entire lives without having to interact with the state.

To illustrate the flaw in Ms. McCloskey’s position, it can be argued that the Islamic Empires between the periods of 600 and 1200 AD were not only some of the most technologically advanced cultures in history, they were also some of the most progressive as well. “Liberty” was by no means exclusive to European culture and in fact, by Ms. McCloskey’s definition, has existed many, many times throughout history.

Besides Ms. McCloskey’s obvious whitewashing of history, she also downplays many events instrumental to the enrichment of the world that also had many devastating consequences:

The Great Enrichment is the most important secular event since human beings first domesticated wheat and horses. It has been and will continue to be more important historically than the rise and fall of empires or the class struggle in all hitherto existing societies. Empire did not enrich Britain. America’s success did not depend on slavery. Power did not lead to plenty, and exploitation was not plenty’s engine. Progress toward French-style equality of outcome was achieved not by taxation and redistribution but by the Scots’ very different notion of equality. The real engine was the expanding ideology of classical liberalism.

This is just blatantly wrong. The British did not enrich themselves with its Empire? Really? No one “enriched” themselves by the slave trade? The Spanish did not “enrich” themselves with the conquest of the New World? Ms. McCloskey goes from whitewashing history to sweeping its more unsavory parts completely under the rug. To illustrate, when the cotton gin was invented in the late 18th Century, America started to import more slaves to not only keep up with the demand for cotton, but to be able to process a higher volume of cotton at lower cost. Early 19th Century America saw a 70% increase in the population of slaves, from 1790 to 1810. The free labor provided by slaves allowed slave-owners to sell cotton at an accelerated rate with lower costs, which did indeed largely “enrich” the slave-owning population as a whole. Not to mention the fact that such a creation triggered a chain of innovation that eventually lead to the Industrial Revolution, from which the world continues to garner wealth.

Slavery and colonialism caused the premature deaths of tens if not hundreds of millions of people. We may be able to look back on the long arc of history and say that those events were not particular conducive to creating wealth relative to what we create now but slavery was a feature well into the 1800s, a period that seems to be Ms. McCloskey’s unofficial boundary. Whether we like it or not, many people became rich as a result of slavery and colonialism and it’s a semantic argument to claim that our world was not “enriched” by those two practices. Many people became rich from the exploitation of others and those events are key parts of our history. These are facts regardless of how Ms. McCloskey attempts to sweep them under the rug.

In the end, I think Ms. McCloskey wants to turn history into a rhetorical exercise. She started with a plausible premise and then polluted it with ideological libertarian drivel. Human progress, for all of its marvels, has been a long and bloody affair. The world became rich from intelligence, achievement, and adventure. It also became rich from war, greed, exploitation, and murder. It’s all part of the same experience. It seems as if Deirdre McCloskey wants to whitewash that in as many ways as possible.

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One thought on “In Response to Deirdre McCloskey

  1. Pingback: How the West *Really* Got Rich | The Currency Paradox

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