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Quotation of the Day…

… is from page 165 of Deirdre McCloskey’s superb 2022 volume, Beyond Positivism, Behaviorism, and Neoinstitutionalism in Economics (original emphasis):

Yet it is not “capitalism” that requires creative destruction, but any progressive economy. If you don’t want betterment to happen and don’t want poor people to get rich by the 3,000 percent that they have in Japan and Finland and the rest since 1800, then fine, we can stick with the old jobs, keeping their former employment the peasants, elevator operators and telephone operators, the armies of typists on old mechanical Underwoods, grocery stores with a clerk in an apron handing you the can of baked beans over the counter. But if innovation is to happen – Piggly Wiggly in Memphis in September 1916 initiating the self-service grocery store, or a North Carolina tobacco trucker initiating in 1956 the shipping container – then people, and also the machines and factories owned by the bosses and their stockholders, have to lose their old jobs. Human and physical capital has to relocate.

DBx: Indeed so. Yet large numbers of pundits, professors, and politicians speak, write, and act as if this reality isn’t so. These out-of-touch-with-reality ‘reformers’ believe that government can protect most or many workers and businesses from change while humanity continues either to enjoy increasing amounts of material prosperity, or at least avoids any great decline in such prosperity.

Government can indeed, with enough coercion, prevent economic change by greatly suppressing economic competition. But government cannot greatly suppress economic competition and change and at the same time protect prosperity and opportunity for the masses. The results of such suppression of economic competition would not be, as some economically uninformed people say, merely slightly higher prices of tee-shirts and trinkets. The results instead would be at first stymied and then steadily declining access to the likes of modern health care, safer and more comfortable housing, leisure and travel, opportunities to learn, better and more interesting diets, and new artistic expressions. Year after year life expectancy itself would fall, as more infants die, as more mothers die as a result of birthing, and as older people die sooner and thus have fewer years with their children and grandchildren.

Even to maintain the current standard of living requires the freedom of individuals to adjust to changing economic circumstances such as falling supplies of raw materials, foreign wars (shooting and trade), alterations in weather, and shifts in demographics. Protecting today’s firms and jobs from being destroyed by economic (and non-economic) forces would come at a steep price.

But, hey, look what we’d get in return for these sufferings! We’d celebrate the satisfaction of knowing that Bobby works at the same factory that employed his father and grandfather, and is doing the same job that each of them did. And Bobby and his family will also enjoy the assurance that that same factory and job will be occupied also by Bobby’s own son – and by Bobby’s grandson. It’s a bargain that can be arranged only by government!


Today is Deirdre McCloskey’s 80th birthday. Happy Birthday, Deirdre! May you – for your sake and for ours – have many, many more.

Regular patrons of Cafe Hayek are well aware that Deirdre’s work has had an enormous influence on my own understanding of the economy, of economic history, and of liberalism generally. Her insights – on price theory, on methodology, on the sources of economic growth (and on the non-sources!), on the craft of writing, and on the philosophy of liberalism – are profound. I cannot imagine what would be the contours of my worldview had I not encountered her work when I was a graduate student; I know only that my understanding would be much worse than it is today. The bourgeois virtues cannot have hoped for a better champion.

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