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by Deirdre McCloskey
Feb. 12, 2011
This article originally appeared in the New York Post, 12 Feb. 2011
Filed under articles [bourgeois dignity] and bourgeois era

In the 1700s, it was suddenly respectable to be an innovator.
As this History Channel recreation shows,
it's all about the Benjamin (Franklin).

Today you spend $100 a day. That's the payoff from the Bourgeois Deal, a rise in the material welfare of ordinary people by more than a factor of 33.

Did we get rich, as the political left says, by exploiting slaves or workers, or from imperialism? No. The numbers are too big to be explained by zero-sum theft. If all the profits of the rich in the US economy today were handed over to the workers, the workers would only be about 30% better off. But in the last two centuries we're 3000% better off. So it can't be redistribution that made us rich.

Did we get rich, then, as the political right says, because of material investment, piling brick on brick, or high-school degree on high-school degree? No. The numbers again are too big to be explained by routine savings and investment, earning routine returns. The innovation was anything but routine. Wynton Marsalis and Geoffrey Ward call improvisation in jazz an "explosion of consensual creativity." That's what happened 1800 to today, the "invention of invention," a "creative destruction" that replaced wood with steel, superstition with science, autocracy with democracy.

Depending exclusively on materialism to explain the modern world, in other words, whether left-wing historical materialism or right-wing economics, is mistaken. Ideas of human dignity and liberty did the trick. As the economic historian Joel Mokyr puts it, "Economic change in all periods depends, more than most economists think, on what people believe." It was ideas that led to our enrichment.

In our own times the big economic story has not been the Great Recession of 2007-2009, unpleasant though it was. The story has been that the Chinese in 1978 and then the Indians in 1991 adopted true liberal ideas in the economy, and came to attribute a dignity and a liberty to the bourgeoisie formerly denied. China and India then exploded in economic growth. Perhaps Egypt and Brazil and South Africa will be next.

The biggest threat, meanwhile, to our prosperity is not temporary recessions, but permanent reversions to old attitudes towards profit and progress. When making money is demonized, when innovation is stifled, that's when we lose what Adam Smith called "the obvious and simple system of natural liberty." Respecting capitalism has worked pretty well for the people for two centuries. I reckon we should keep it.

Today you spend $100 a day. That's the payoff from the Bourgeois Deal, a rise in the material welfare of ordinary people by more than a factor of 33.

Did we get rich, as the political left says, by exploiting slaves or workers, or from imperialism? No. The numbers are too big to be explained by zero-sum theft. If all the profits of the rich in the US economy today were handed over to the workers, the workers would only be about 30% better off. But in the last two centuries we're 3000% better off. So it can't be redistribution that made us rich.

Did we get rich, then, as the political right says, because of material investment, piling brick on brick, or high-school degree on high-school degree? No. The numbers again are too big to be explained by routine savings and investment, earning routine returns. The innovation was anything but routine. Wynton Marsalis and Geoffrey Ward call improvisation in jazz an "explosion of consensual creativity." That's what happened 1800 to today, the "invention of invention," a "creative destruction" that replaced wood with steel, superstition with science, autocracy with democracy.

Deirdre N. McCloskey is a professor of economics at the University of Illinois at Chicago. Her latest book Bourgeois Dignity: Why Economics Can't Explain the Modern World (University of Chicago Press) is out now.