The finished version of Bourgeois Dignity and Liberty: Why Economics Can’t Explain the Modern World is under review at University of Chicago Press and expected to debut sometime in the 2010-11 academic year. Its draft version and tentative introduction and table of contents were made available in Prudentia last February in PDF format but we plan to post some final copy in HTML. Stay tuned.
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Two centuries ago the world’s economy stood at the present level of Chad or Bangladesh. In those good old days of 1800, further, on past form the average person in Norway or Japan would have had less rational hope than a Chadian or Bangladeshi does nowadays of seeing in a couple of generations the end of such poverty. In 1800 the average human consumed in modern-day prices, fully corrected for exchange rates, roughly $3 a day, give or take a dollar or two. That’s $3 a day in present money to live now in, say, Los Angeles. … [continues; click title above]
It is a materialist prejudice common in scholarship from 1890 to 1980 that economic results must have economic causes. But ideas caused the modern world. The point can be made by looking through each of the materialist explanations, from the “original accumulation” favored by early Marxist historians to the “new institutionalism” favored by late Samuelsonian economists. The book present does so, and finds them surprisingly weak. The residual is ideas, in particular the Bourgeois Revaluation of the 17th and 18th centuries in northwest Europe. The argument takes six books, constituting a full-scale defense of capitalism. One is that … [continues; click title bar above]
Real national income per head in Britain rose by a factor of about 16 from the 18th century to the present. Other cases, such as that of the U.S. or Korea, have been even more startling, historically speaking. Like the realization in astronomy during the 1920s that most of the “nebulae” detected by telescopes are in fact other galaxies unspeakably far from ours, the Great Fact of economic growth, discovered by historians and economists in the 1950s and elaborated since then, changes everything. [continues; click title bar above]
Britain was first, though the classical (and many of the neoclassical) economists did not recognize that its course was beginning the factor of 16. The slow British growth in the 18th century proposed by Crafts and Harley is unbelievable, but however one assigns growth within the period 1700-1900 it is now plain that something unprecedented was happening. Only non-economists recognized it at the time. The central puzzle is why innovation did not fizzle out, as Mokyr has put it—as it had at other times and places. Productivity in cotton textiles, for example, grew at computer-industry rates, … [continues; click title bar above]
Thrift was not the cause of the Industrial Revolution or its astonishing follow on. For one thing, every human society must practice thrift, and pre-industrial Europe, with its low yield-seed ratios, did so on a big scale. British thrift durinhttp://www.deirdremccloskey.com/weblog/2009/08/28/saving-investment-greed-and-original-accumulation-do-not-explain-growth/g the Industrial Revolution, for another, was rather below the European average. And for still another, savings is elastically supplied, by credit expansion for example (as Schumpeter observed). [continues; click title bar above]
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