Bourgeois Dignity: what doesn’t explain the industrial revolution

Deirdre McCloskey is a very unorthodox economist. Even though she did a lot of classical work on the history of the industrial revolution in England, she is best known for her critical examination of the 'rhetoric' of economics. A good example of her attacks can be found in her latest book on that issue (The Cult of Statistical Significance, with Stephen Ziliak), in which she criticizes the slippery use of 'significance' in statistics (see this post). But McCloskey has now engaged in an even larger enterprise: explaining the unprecedented economic growth observed over the last two centuries. The ambition of the project is reflected in the sheer volume of the treatment: six books, one published in 2006 (The Bourgeois Virtues), one that just came out (Bourgeois Dignity – that is briefly reviewed here), one available in draft form (The Bourgeois Revaluation), and three more that should appear over the next few years. McCloskey's main these is that the period of growth we have experienced was due to a shift in the rhetoric about bourgeois values.

 

 

After having been frowned upon – think of the scorn for the merchant in Shakespeare – the bourgeois values started to be honored, and more liberty was given to the entrepreneurial, or innovative, actors in society – first in Holland in the 17th century and then in England in the 18th. This is a fascinating idea, well outside the mainstream of explanations usually advanced by economists and historian to account for the industrial revolution. In Bourgeois Dignity, McCloskey does not present much by way of positive arguments – this will be done in the next two books. Instead, she relies on a negative argument: none of the other explanations work, so mine must be correct. She defends this strategy at the beginning of the book, mentioning successful instances of its use, such as the elimination of all other hypotheses by Penzias and Wilson in order to conclude that the white noise they recorded was in fact a product of the Big Bang. However, it is much less clear in the case at hand that all other hypotheses have been exhausted. To some extent, the very fact that she's able to offer a novel explanation herself shows that it's still possible to do so, unless she assumes that anybody else but her can do it.

 

 

Even if her negative argument offers little support for her own thesis, it is still immensely useful in its refutation of many common ideas about the cause of the industrial revolution. The titles of her chapters provide us with a quick list of unsatisfactory explanations. It was not accumulation, nor improvements in transportation or in trade, nor geography, nor imperialism, nor institutions, and so on and so forth. As non-expert, it's hard to judge whether all of her dismissals are equally sound, but her arguments are usually strong, relying on recent historical statistics (against the economists' hypotheses) or well-accepted economic arguments (against the historians' hypotheses). Even if each rebuttal were to be sound however, they would still offer only limited support for her own thesis. Many of the arguments are of the form: "this explanation relies on this factor, but this factor was also present in other times / places, and so it cannot successfully explain the specific event that happened in England in the early 19th century." This still leaves open the possibility of interactions. Maybe it was not only trade, or geography, or institutions, but the interaction of these different factors that was unique of this time and place. While such an argument remains to be made, it shows that the exhaustion of current alternatives offers only limited support for McCloskey's own point.

In any case, McCloskey's thesis promises to open doors for an approach to the problem that would take "cultural epidemiology" into account. Even though she's careful to talk of 'rhetoric', focusing on what people say rather than what they may think, the question is still fundamentally one of spread of cultural elements – here, beliefs about the bourgeois virtues and beliefs about what is appropriate to say about them. Why did these beliefs spread at that particular time and place? If they are really responsible for our modern wealth, why did they not spread before? Hopefully, McCloskey will address these questions in more depth in the future installments of her series. Unfortunately, she seems to have nothing but scorn for (and apparently little understanding of) psychology, in particular any kind of psychology inspired by the theory of evolution (she dismisses Pinker as a eugenist for suggesting that language is probably in part innate). So there is little hope that she relies on psychology to do any of the explanatory work. This is a shame since some well-established human cognitive proclivities could help explain the resistance to some of the bourgeois values. For instance, many innovations make most people better off but some people worse off. The status quo bias (a bias to prefer the status quo) and loss aversion (losses loom larger than gains of equal value) could help explain why innovations are not more commonly accepted.

McCloskey's refusal to take psychology into account also leads her to discount happiness research. Her main argument seems to be that since people do not say that they are much happier now than thirty years ago – in rich, Western countries – but that their purchasing power has increased, then the happiness research must be bunk. To account for this puzzle, she invokes the increased number of possibilities that have become open to people (Sen's capability approach), saying that this is good for people even if it doesn't show up in the answers to happiness questions. So at least she seems to agree that purchasing power is not everything that matters, or even that it may not even be the most important goal for a society. It is regrettable, then, that the increase in purchasing power is the only thing she focuses on in the book. Granted purchasing power is easier to measure, especially when it comes to, say, 18th century data. Granted also, purchasing power and increased capability are correlated. But there are also likely to be deviations from a perfect correlation. It seems as if her occasional sneer at the Swedish or the German economic models might be tempered if she took into account more than sheer purchasing power, in line with her own statements about the importance of capabilities.

Finally, the book could probably have used more editing. Five hundred and fifty pages of negative argument is a lot, and it could certainly have been made shorter. Some digressions may have been skipped – about the billiard skills of McCloskey's father or biographical details of the life of Douglas North. And some chapters may not have been entirely necessary. For instance, spending three chapters on Gregory Clark's absurd thesis that the industrial revolution was caused by English bourgeois out-reproducing the poor and thus spreading their values was probably too much. Still, the book is an invaluable review of the explanations for what may be the most important event in human history, and McCloskey's verve and breadth of knowledge shine throughout. She offers a truly unique perspective on this fascinating topic, and we should look forward to reading the next volumes.

5 Comments

  • Hady Ba 21 December 2010 (23:53)

    Hi Hugo, Nice post. I’m wondering whether McCloskey is not succumbing to the post hoc ergo propter hoc fallacy. It can still be the case that the bourgeois values she is considering are just good predictors of economic growth without actually creating it because a society promoting them will also promote some other features important for economic prosperity. Bill Easterly had [url=http://this nice chart]http://aidwatchers.com/2010/09/solving-the-mystery-of-the-benevolent-autocrat/[/url] showing that nine out of the ten best per capita growth rates of the last 40 years are from autocratic countries. It would be difficult to argue that these countries are doing well economically because of the bourgeois ethos they embody. I’m not sure also that her enrollment of Penzias & Wilson as illustrating her explanatory strategy is accurate. What actually happened is that after eliminating all the sources they could think of, P&W had no idea about what was causing this noise until Penzias learned that Jim Peebles and alii was setting an experiment to detect that very same noise, predicted by their theories about the big bang. Contrary to what McCloskey suggest, P&W was noncommittal concerning this possible explanation and didn’t embrace it enthusiastically just because it was the last one available. [url=]http://en.wikipedia.org/wiki/Discovery_of_cosmic_microwave_background_radiation[/url]

  • Deirdre McCloskey 23 December 2010 (15:27)

    Dear Dr. Mercier, Thank you for your reasonably just and enthusiastic review of Bourgeois Virtues: Why Economics Can’t Explain the Modern World. When I was your age, and hadn’t written any books, I was much more stern than you are! Your main point on the substance is my “refusal to take psychology into account.” I see what you mean, and your point is fair—though I don’t think “refusal” is quite the word. I do admit to the ignorance you criticize of psychology, and will try to do better, using even this very website as a library. As to the historico-scientific grounds for my “refusal” of psychology: Take your example, that status-quo bias and loss aversion would “explain why innovations are not more commonly accepted.” Sure, got it. But so too they would “explain” the lack of acceptance at all times and places relevant to comparison with the birth of the modern world, wouldn’t they? So how did the lack change? Except on the multi-deca-millennial time-scale of most evolutionary psychology, aren’t such psychologies merely background conditions, scenery—rather than potential explanations for what after all is a change in the acceptability of innovations? I argue in the book that there’s not in the relevant period much evidence of psychological change (this against Max Weber’s hypothesis—which he in fact dropped after first articulating it in 1905). The historian Keith Thomas says wisely in a recent, brilliant survey of early modern England (Thomas, The Ends of Life, 2009, p. 186), that “it is very likely that the desire to be valued by others [and likewise other psychology mechanism such as status-quo bias, and loss aversion, and the fundamental attribution fallacy, and so forth] is a human universal. . . . But that desire can take many different cultural forms,” having, I would argue, radically different economic consequences. It’s after all the main point of my own book that what exactly was valued—whether aristocratic gestures in court or castle, or venturing in trade to the Levant, or making a steam engine—is what changed. The changes, I argue, were mainly sociological and political and literary and philosophical. Not psychological. I imagine you would agree, though urging us both to look for more evidence, as I would, too. One scold, though. You will learn I hope to resist, as you do not resist here, the Reviewer’s Chief Temptation—that is, to claim as your own insights the modest concessions the very author makes at length! For example I concede at length, with full philosophical justification (you give the impression that my only comparison is with the Big-Bang observation), that the book is mainly a comprehensive review of the other, materialistic, and, as it turns out, quantitatively weak explanations of how we went from $3 a day in 1800 to $125 a day in 2010. You jump on this, take it as your own point, and then claim that I therefore offer few positive arguments for the hypothesis of a Bourgeois Revaluation (the very vocabulary here of “positive” and “negative,” by the way, is again my own). In truth—though “negative” arguments are not to be set aside as inconclusive in science—I present quite a few “positive” arguments for it, perhaps 30 or 40 page’s worth, though reserving to the next volume (The Bourgeois Revaluation) a fuller exploration. For example, I speak (on pp. 13, 26, 63) of “the scorn for the merchant in Shakespeare,” as you put it (you leave the impression that you are the one who noted it). Likewise, you make my very own point, as though I had neglected to make it, about the “the possibility of interactions,” to which I devote many pages (e.g. 192-193; all the discussion of trade and economies of scale; much of the discussion of imperial power and domestic prosperity; and so on throughout). I conclude about the possibility of interactions and multiple causes that “the still deeper problem is that what needs to be explained is why the multiple causes converged in the late eighteenth century. To this question I have an answer. The historians who hypothesize a happy conjuncture of otherwise routine economic forces do not.” In short, you’ll want to resist The Temptation, and remove it from your rhetorical armamentarium. Yes? But as I say, your summary of my book is on the whole fair and accurate (“fair and balanced” has been ruined as a commendation!). Perhaps you should read with a little less confidence that you understand a moderately complicated scientific and political position. For example, I don’t “sneer,” as you claim, at the Swedish and German social democratic model. On the contrary: take down the book and slowly read pp. 444-445. But let me repeat: you write well, think well, and are scholarly and open-minded. Bravo! Sincerely, Deirdre N. McCloskey

  • Hugo Mercier
    Hugo Mercier 24 December 2010 (12:35)

    Dear Dr. McCloskey, Thank you very much for taking the time to write a reply to the review — especially one as graceful — this is truly very much appreciated. First of all, I apologize for the somewhat sloppy attack on your defense of the “negative argument” strategy. A more careful reading would have saved me the embarrassment of using arguments you had in fact already replied to in the book — if I stole them, it is only unconsciously, even though this is not much of an excuse. More interesting is the debate about the role of psychology in historical explanations. It is very understandable that historians would be wary of psychology, given the poor track record of ‘psychohistory’. Some historians also rightfully reject explanations that appeal to large cross-cultural psychological differences, and here again I suspect they are mostly in the right (unfortunately, I don’t have your book with me at the moment, so I can’t tell if you cite Lloyd’s brilliant Demystifying Mentalities on that point). Still, here are two arguments that can be made for the usefulness of psychology in history. First, let’s assume that the core psychological mechanisms are mostly stable through (historical) time. That doesn’t mean they can’t have an important explanatory role. Here’s an analogy. Gravity applies in the same way to all land-dwelling animals. Yet it is very important to understand locomotion for each species. And it is also important to understand the transition to flying animals: why it took so long despite the advantages it brings, why flying animals have the anatomy they do, etc. So while I agree with you that such stable psychological mechanisms cannot easily — purely on their own — explain the transition you seek to explain, they may nevertheless be useful in explaining the timing of the transition as well as some of its feature. To take another, closer analogy, the core psychological mechanisms we use to think about space and quantities are mostly stable. Yet, given what we know of these mechanisms, it makes sense that natural numbers should have been discovered (relatively) early, that negative numbers would be less intuitive, that Newtonian mechanics would be more intuitive than relativity theory, etc. Indeed, it is possible to make some fine grained distinctions — for instance, Christophe Heintz has tried to explain why Leibnitz’ formulation of differential calculus spread better than Newton’s in terms of their ‘appeal’ to our core psychological apparatus. Second, the assumption of the first argument is probably overly strong. The environment — particularly the social and cultural environment — does affect our psychology. Modern Americans, say, are different creatures from the ones hunting buffaloes in the African savannah 100,000 years ago. Even if our core psychological mechanisms are similar, we use them differently. Our naive biology is likely atrophied, in the same way as feral children’s language learning abilities are atrophied. On the other hand, other abilities — doing boring things 40 hours a week, multitasking maybe — are more developed, as the language learning abilities of an already multi-lingual speaker would be. It’s not obvious how such changes can explain any specific historical change, but they should not be dismissed too lightly. Granted such changes, in turn, require an explanation, usually some change in the environment, which in turn requires an explanation — but this is not a problem that is specific to psychological explanations. It is also possible that the disagreement is partially semantic. What you see as “sociological and political and literary and philosophical,” I would tend to see as also — but not only — psychological. After all, it’s hard to imagine psychology being irrelevant when trying to explain why people value “aristocratic gestures in court or castle, or venturing in trade to the Levant, or making a steam engine.” If our 18th century participant has been influenced by her readings, it certainly qualifies as a “rhetorical” change, but still one mediated by her psychology, that may explain why she was influenced more by this argument than by that, etc. Maybe this would fall under the “rhetorical” category in your reading and under the “psychological” category in mine. Still, the onus of proof still mostly lays with psychologists who have to show how their discipline can be made more useful in the study of history. Let’s hope they take up the gauntlet. Thank you again for you reply, I really look forward to reading your next books — and to try to insert some psychology in their explanations. Best wishes, Hugo

  • Deirdre McCloskey 15 January 2011 (18:06)

    Dear Hugo, if I may (how chummy we become in the ether!), I agree that we cannot merely Set Psychology Aside. I’m not so sure, though, that 100,000-year changes are relevant to explaining the Bourgeois Revaluation after 1600: that is to commit the Jared Diamond Fallacy, of seeking to explain a fine-grained event (why “whites” have so much cargo) with a coarse-grained explicandum (that industrialization was very unlikely to occur outside Europe and Asia). Yet your key, and correct, phrase is “mediated by her psychology.” Regards, Deirdre

  • Hugo Mercier
    Hugo Mercier 15 January 2011 (18:54)

    Dear Deirdre, if I may Thank you for your kind remarks (which I will take as a birthday present, given the unintentional but still propitious timing). Beyond general arguments about the role of psychology to explain ‘fine graned’ historical events, I guess we’ll have to wait a few years and see if such a research program successfully develops. I hope–and think–it can, but there may as yet be no strong arguments to support this view. Very best wishes for the new year, Hugo