The subject of this month’s Online Library of Liberty’s “Liberty Matters” series is Deirdre McCloskey’s work on the origins of the industrial revolution – or what Deirdre calls “market-tested innovationism.” Sheldon Richman, editor of “Liberty Matters,” asked me to write the lead essay, which of course I was honored to do. Here it is. Reactions to my essay are forthcoming from Northwestern’s Joel Mokyr, my GMU Econ colleague John Nye, and from Deirdre herself. The discussion should be a good one.
Here’s a slice from my lead essay:
Enter McCloskey. What, she asks, changed in the 17th century to spark mass flourishing? Again, the answer can’t be limited or small government, secure private property rights, or a rule of law at least as real as the one that today exists in prosperous places such as Chicago or Shanghai. While perhaps necessary for mass flourishing, those institutions have been around for too long without having launched any sustained economic takeoff. McCloskey’s surprising yet compelling answer is that mass flourishing was sparked by a change in ideas about the dignity of commercial pursuits.
Until the 17th century, those who earned their living through trade were the Rodney Dangerfields of their eras: they got no respect. Merchants and other people operating on the supply side of commercial activities and transactions were tolerated. But they were viewed and spoken of with contempt. Unlike warriors who dirtied their hands honorably (namely, with blood), traders dirtied their hands dishonorably (namely, with profit). Unlike the nobility who got their riches honorably (namely, by idly collecting land rents), merchants got their riches dishonorably (namely, by actively trading). Unlike the clergy who won their rewards honorably (namely, by pondering the eternal), the bourgeoisie won their rewards dishonorably (namely, by responding to what Hayek later called “the particular circumstances of time and place”).