An exploration of ‘Bourgeois Equality’: Chapter 3/67
I am doing a chapter-by-chapter breakdown (of varying lengths) of “Bourgeois Equality: How Ideas, Not Capital Or Institutions, Enriched the World” by economist Deirdre McCloskey, the final book in her trilogy on how the liberal ideas of equal liberty and dignity for ordinary people led to the West’s Great Enrichment.
Chapter 3: Then Many of Us Shot Up the Blade of a Hockey Stick
The stunning improvement in Western living standards since 1800, what McCloskey calls the Great Enrichment, is “the most important secular event since we first domesticated squash and chickens and wheat and horses.” And the engine for that stunning improvement is the Bourgeois Deal of liberty and dignity:
You accord to me, a bourgeois projector, the liberty and dignity to try out my schemes in voluntary trade, and let me keep the profits, if I get any, in the first act – though I accept, reluctantly, that others will compete with me in the second act. In exchange, in the third act of a new, positive-sum drama, the bourgeois betterment provided by me (and by those pesky low-quality, price-spoiling competitors) will make you all rich.
The thinking behind the Bourgeois Deal displaced that of the hierarchical Aristocratic Deal:
You honor me, an aristocrat by natural inequality, and give me the liberty to extract rents from you in the first act, and in the second and in all subsequent acts. I forbid you under penalty of death to see competitive “protection.” By the third act of the zero-sum drama, if you behaved yourself, and have pulled your forelock and made your curtsey as I ride by, I will not at least have slaughtered you.”
Some important points made by McCloskey;
1) Innovators also reap a small share of the betterment they create, maybe only a few cents of each $1 in social value.
2) Greater wealth means more opportunities not just stuff.
3) Sweden is quite “bourgeois” and “capitalist” and not much less so than the US.
4) We are experiencing “a worldwide explosion of high culture, out of ‘capitalism'” — and not just the golden age of television.
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