Deirdre McCloskey, The Bourgeois Virtues, Ethics for an Age of Commerce, University of Chicago Press, 2006
The bourgeois virtues -- love, faith, hope, courage with temperance, prudence, and justice—have served us well according to McCloskey.
Capitalism has triumphed, but what is it? “I mean by ‘capitalism’ merely private property and free labor without central planning regulated by rule of law and by an ethical consensus (14).” You never get more specific than that, though the devil is in the details of capitalism. The Japanese, French, German, Swedish, Dutch, and US are all capitalist, but quite different and with different results. The argument stays at the level of capitalism vs. socialism, rather than the more relevant question for today of what kind of capitalism do we want. You get a bit more specific when you say, “capitalism and bourgeois virtues have been greater forces eliminating poverty than any labor union or welfare program or central plan (27).” “Better working conditions have prevailed not because of union negotiations or governmental regulations, but because capitalism has worked.” Here we have some of the details that you oppose. Nineteenth Century capitalist low-wage, 12 hour day, sweat shops were not places where you would have liked to work. Surely unions helped make them better along with laws prohibiting child labor, and more recently OSHA. The Chicago River in your backyard was a chemical laden sewer. One can agree that growing wealth can be used for public betterment, but there is no guarantee that the titans of industry have enough virtue to use it for that. I would rather require workplace and environmental improvement than depend on the virtuous foundations of Carnegie and Rockefeller. Incidentally, what is the Federal Reserve Board if it is not central planning?
A central argument of the book is that “Capitalism has not corrupted our souls. It has improved them (23).” It is a nuanced argument that acknowledges some failures, but in broad historical sweep vulgar consumers and fraudulent entrepreneurs “are not worse than their ancestors, and on average better (24).” Still in arguing that capitalism has produced better humans, the problems of mental illness and drug use are ignored, not to mention Prozac. “Much of human good and evil arises from our fallen natures and has nothing to do with the circumstances in which we are put (29).” This may be good theology, but the word “Nothing” lacks nuance. It is rather sweeping, speaking of the poor, “it’s not our fault that they are poor (28).” What about methodical and wide-spread racial discrimination? What about Western European exploitation of their African, Asian, and Latin American colonies?
Contrary to Galbraith (not referenced), you say, “It is a mistake … to think of bourgeois life as ‘consumption-driven,’ if one means that spend, spend, spend is necessary for its survival (30).” This seems to fly in the face of the relationship of consumer debt and recessions among other things. More prosaically, it also flies in the face of the increasing supply of storage rental units to put all the stuff in that people have bought anticipating great joy and now find no space in their homes for. You extol the rise of the arts, etc. due to the growth in wealth, but do not mention the invasion of commercial messages to buy into every aspect of our life such as naming sports arenas. I expect one day that professors will carry sandwich boards with ads into the class room much as European soccer clubs now carry commercial names on their players’ jerseys. Maybe we would survive without consumerism, but it would be a different place (the stock market, for example). In the face of mountains of advertising, I am not going to put my faith in the idea that competition puts the consumer in control.
McCloskey is most worried about the danger to freedom from the powers of the modern state (38). She acknowledges the use of government by farmers and large corporations and is critical of government because it is captured by commercial interests. But, as the argument goes along, the corporations fade from sight and the big, bad government must be downsized rather than search for ways to control contributions to campaign spending. That, of course, would require citizens to take control of government, rather assume beneficence if it would just go away.
“Modern economic growth and modern ethical improvement … are a consequence of personal freedom…. (38).” Individual and isolated individuals are implied. Apparently, she and McNeill find no room for collective action. Salvation is to be found only in competition, market or nations via war. Is the story told by Avner Grief only a minor exception? In his Institutions and the Path to the Modern Economy, he describes medieval guilds getting together to threaten exit from market towns of local lords who would dare to confiscate their goods. Competition between local states to be sure, but made effective by joint action of the merchants—if they could not control exit from their position (free riding), competition would not have worked.
The innovation prohibition of the Japanese shogunate is too easy a target to critique in support of individualism. No one in the most aggressive state today advocates such regulation, in spite of your “worry nowadays about European Community and American federal officials, too (41).” Forbidding pollution and unsafe workplaces is not the same as forbidding innovation. You make innovation the big advantage of individualism and capitalism. Surely innovation is more complicated than leaving people alone to buy and sell. And, one must note the role of tax money in research sponsored by the National Science Foundation and public universities that provide the knowledge base for new products and processes.
Hayek’s warning of the road to serfdom is reborn here. “The serfdom in rich countries now is governmental, not private.” “I advocate laissez-faire, and dream of literally one-third to one-fifth of the government we now have (41).” Dream on—dreams seldom deal with detail. You side with the angels by saying you would be happy with government if its expenditures were on behalf of the poor. “It benefits politically well-connected construction companies and the owners of paving firms, not little kids from the inner city.” Nice rhetoric. You say “taxation is taking,” “a kind of slavery (45).” Powerful images indeed. Zingers abound.
All is explained by the “median voter theory (45).” The median voter is a mathematical truth about which nothing can be done. On the other hand, campaign finance reform is a human artifact. But of course, that would take making government effective, rather than simply smaller (meaning no regulations and a smaller budget). I do not need persuading that American farm programs are an abomination. I have considered “that letting people alone to make deals in a law-respecting society with low taxes helps them and their poor neighbors to flourish, materially and ethically….(47)” and find it wanting. You quote Ellis with approval, “some form of representative government based on the principle of popular sovereignty and some form of market economy fueled by the energies of individual citizens have become the commonly accepted ingredients for national success (47).” But what form? That is the deeper question. Is it representative government where the Tom DeLays can use campaign funds to help the Texas legislature redraw Congressional districts to serve personal purposes? Is it the market economy of Japan, Sweden or the US? Is it a market economy where the laws allow individuals to act collectively (and unnaturally) in corporations, but make it difficult for workers to do the same in unions?
McCloskey sees collective good springing from individual free exchange and bourgeois virtues. She would depend “on self-organizing systems like markets and morals, or for that matter common-law decisions of courts (49).” These visions are empirically false. Modern markets are not self-organizing. Without law, no one knows who is buyer and who is seller. These institutions are prior to markets. And the common law court system is far from self-organizing. It is a branch of government with elected judges in most places. If it were all a matter of logic and self-organization, we would not care who these judges are. Neither common law precedents nor the words in the Constitution speak for themselves. They are human artifact and interpretation forged in the anvil of conscious political conflict. In passing, I cannot refrain from smiling at your examples of beneficial spillovers from self-interested individual action. Surely the service of a “billboard on the highway advertising a restaurant serves as a vivid pointer to the downtown” could be done more efficiently by a simple public sign with an arrow and “centre ville.”
And more to the point, the law (common or statute) is a kind of central planning. Judges and legislators surely have in mind the kind of economic growth encouraged by their creations. If these are not centralized, commerce could not predict its options. Please consider that interpretations of the Constitution’s commerce clause are the basis for a national market with economies of scale. The interpretation of this clause is a kind of central planning evolving every day. This hardly emerges magically from individuals left alone. Civic and bourgeois virtues limited to isolated individual action produce little. There is no question these virtues are necessary, but I beg you to consider that they are not sufficient even in their various combinations.
The list of experiments (30) seems disingenuous. You mix imperialism, intrusive policing, and zoning in the same list. No one wants intrusive policing, but what is it exactly? (By the way with respect to imperialism, Bush and half the voters are not paying attention.) I, whether rich or poor, would not like to live in a neighborhood where my neighbors could grow pigs next to my house or apartment (and I suspect that you are the same.) Oh, I know that in Houston, large developers accomplish the same thing with deed restrictions, but it is not possible in most places with small developers and individuals going out in the country on their own (buying and selling at will). And anyway, a restriction is a restriction whether privately or publicly created—and even so, deed restrictions are publicly sanctioned or not—witness those requiring sale only to Caucasians made invalid. One person’s restriction is another person’s opportunity. Throwing Soviet central planning and American Progressive regulations in the same pot also seems loaded. The American Progressives accomplished many reforms including utility and railroad regulation where competition is not practical. Federal deposit insurance may have made banks less careful (but I think it has more to do with less oversight of prudent portfolios as occurred before the S&L fiasco), but it encouraged savings by small savers otherwise once suspicious of banks. I am not a defender of entitlements given to western ranchers, but to knock indiscriminately the entire conservation movement is likewise hard to defend. Are you really serious that the environment would be better without the conservation movement including the establishment of the national parks? Would the bourgeois virtues protect wildlife in Alaska?
McCloskey is a historian and I hesitate to contradict her, but the statement, “Europe recovered after its two twentieth-century hot wars mainly through its own efforts of labor and investment, not mainly through government-to-government charity such as Herbert Hoover’s Commission or George Marshall’s Plan” is hard to accept without documentation. I can accept the idea that Marshall Plan aid without the pre-war institutions that could be revived would have been of much less value.
Bringing your speech to conclusion with force, conviction and clarity leaves no doubt where you are going. I applaud its frankness. If we adopt “the simple and obvious system of natural liberty, every person on the planet… can come to have, complements of the bourgeois virtues, the scope of life afforded now to a suburban minority in the West.” I wish nature were so obvious and clear in its lessons. We are offered the Bourgeois Deal: “leave me alone to buy low and sell high, and in the long run I’ll make you rich (53).” “If we will let people own things … and if we let them try to make profit out of the ownership, and if we keep out of people’s lives the tentacles of a government … we will prosper materially and spiritually (53).” Which people? The poor are those who own little that is a cost to others. I am driven to ask what things (opportunities) should each individual own when opportunities conflict. What if the poor (or all of us) owned the radio-magnetic spectrum, off-shore oil, and land rents created by public investment in highways and transit systems (George was on to something),
I repeat my earlier acceptance of the value of the bourgeois virtues to commerce. And, I too observe that many of these virtues have survived capitalism, though I observe that some kinds of capitalism do better by them than others, and I hope you will discuss this. But I will be a tough sell that these must be encapsulated in God and transcendence as is done in subsequent chapters or that nature speaks for itself and all worthwhile institutions come forth spontaneously. You speak earnestly for democracy, but what is democratic government if not to consciously debate what we are to become and what institutions are likely to get us there?
I have argued that freedoms of different people conflict and thus support for any particular institution on the basis of general freedom is empty (Conflict & Cooperation). I observe that one person’s hated “tentacles” of government are another person’s freedom and opportunity. (Perhaps this unavoidable condition of the world is the ultimate fall from grace!) I have argued that giving ownership of an opportunity to one party rather than another requires a moral judgment—the treatment of others as subjects and not objects. I have argued that love and caring are necessary for a commercial society and peace. Let me speak equally simply. I am a champion of markets. I just want to be the seller (owner) of most opportunities and you the buyer. Then I can be a virtuous philanthropist like Bill Gates.